Starling Bank and Currencycloud – helping small businesses grow globally

Background

Starling Bank and Currencycloud have worked closely together for several years. The alignment of ambitions to use technology to level the playing field of international business has led to a fruitful partnership. Currencycloud launched Currencycloud Spark in 2020, a multi-currency ewallet solution that allows clients to hold as many as 34 currencies in a single account, with the ability to receive, pay-out, hold and convert currencies. Starling has used this solution to add local USD accounts to its existing GBP offering.

Challenge

SMEs in the UK have historically been underserved when it comes to banking. Traditional banks are designed to support larger corporations, yet SMEs make up more than 90% of the global business population, delivering 70% of employment, and are responsible for 50% of GDP in developed countries, including around 30% of global imports. They are the engine room of the economy.

And SMEs are already beginning to open up to international trade. A recent study by Sage and Capital Economics found that the economic effects of COVID-19 have led to 67% of SMEs taking or considering measures to trade internationally.

However, hidden and explicit bank charges, and a lack of understanding of the true cost of FX hampers business growth, while the level of debt from late payments can put many SMEs at risk of failure.

More would like to expand their global footprint, so what can we do to relieve the pain of international payments and collections for SMEs?

Partnership

Currencycloud and Starling are using technology and our partnership to make the lives of SMEs easier.

Today, if an SME wants to make an international payment through a traditional, legacy bank, the process is opaque, time consuming and costly.

Let’s take the example of a UK SME invoicing a US customer. The UK firm issues an invoice in GBP, its local currency. The US company pays in USD. The US customer likely has to go into a local branch to make the payment and will be struck with costly FX rates and charges for making the payment.

And what arrives at the UK SME will likely not be what was sent, because during the cross-border payment process an intermediary bank may have charged a fee for processing the payment, and the receiving bank of the SME may also have taken a similar fee for recognizing an international payment. This makes reconciliation a nightmare for the SME, not to mention leaving them short of what they had billed.

Results

Currencycloud Spark is our multi-currency e-wallet that provides clients with the ability for their customers to hold, receive, and pay out in multiple currencies. Essentially, it allows clients to be local in the US, UK and the EU. And the beauty is that they can make FX conversions at their convenience, not necessarily when every payment is made or received.

Starling customers can take advantage of a unique US addressable account number and ACH routing number, speedy payments, as well as helpful money management tools.

The resulting benefits to Starling Bank and their customers are as follows

Speed

By working with Currencycloud, Starling can help make sure customers can send and receive USD quickly – which to a busy business owner is critical for doing effective business – buying or selling.

Cost-effectiveness

With customers able to hold currency locally, it is also cheaper for Starling’s customers, which makes their products and services more attractive. And customers can make and receive as many payments as they like via the ACH payment network, with no charge/fee per payment.

Ease

Because of the local element, Starling’s business customers can reconcile their accounts much more easily, with the amounts sent and received in full via Currencycloud.

Currencycloud also partners with Starling’s B2B Banking Services to enhance its instant cross-border payments. By providing access to Faster Payments and making use of Starling’s unique real and virtual accounts, Currencycloud can deliver a real-time pay-out service to thousands of customers who rely on our infrastructure to send and receive payments in the UK.