Forbes: Answers to three questions about fintech startups


In an ideal world, payments can be sent to every country via every method imaginable for best user convenience. However, the reality is not so simple, so fintech companies need to constantly evolve and adapt to ever-changing market demands. Below are answers to three common questions that payroll fintech businesses need to tackle for both their own sake and their customers’

Why don't you accept X or Y payment method?

There are multiple factors affecting the availability of payment methods:

  1. Associated expenses. Incorporating a new payment method may often be quite costly, which is both impractical and ultimately damaging for a fintech platform.

  2. Regional restrictions. The list of international sanctions keeps growing, and this comes with stringent measures that prohibit partnerships with specific banks or financial institutions.

  3. Payment method availability. The geographical location of a company determines whether a specific method is available for it or not. 

Why don't you work with every country?

Every particular region has specific regulations that fintech companies need to comply with. Know Your Customer (KYC) and Know Your Business (KYB) requirements are becoming stricter in the United States, Europe, and Asia. Frequently, companies in the fintech sector are required to obtain separate licenses for each country of operation, a process that can span several years.

Fintechs can drive down costs precisely because they do not have all the heavy infrastructure of conventional financial institutions. If we are forced to develop it, we would not be able to compete, which is why many markets are simply not attractive.

Why is it difficult to predict commissions and fees in advance?

There are many hidden fees in every financial transaction that further complicate things for payroll companies. Most of the time, the end user does not know how much it costs for a payroll company to fulfill their transaction.

Many factors influence these costs:

• Transaction amount. Usually, fees go down for higher-volume transactions.

• Commission charged by the payment gateway.

• Fees charged by partner banks for managing and sending funds.

• Commissions charged by payment partners (e.g., Coinbase/CoinsPaid).

• Currency fluctuations. This is especially true if the payroll company is exposed to currency translation risk.

These are just transaction costs, and in addition to that, payroll companies need to consider the costs they have to keep the business running.

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