Podcast March 24, 2020

How do we fix global trade payments? (Hint: It’s not blockchain)

Global trade payments are a little … broken. 

Plenty of fintechs and startups have created better trade payment platforms domestically. Plus, various payment systems have focused on the international P2P transactions.

But few fintechs have really tackled the global B2B space. 

That’s exactly why Asnee Fernando founded Shoptaki.

He believes that if small businesses could easily streamline payments across borders, more of them would thrive. So, he’s created Shoptaki “to bring the best distributed AI solutions to simplify global transactions.”

Asnee came on the Payments Innovation podcast to share all about Shoptaki’s capabilities

B2B transactions are not as simple as using Amazon

While several payments solutions have tackled transnational payments for the P2P space, many have shied away from handling B2B transactions. Why? Well, in trade payments, trust needs to be earned.

At some point along a transaction road, and especially early in a relationship, one side or the other is taking a great leap of faith — you’re dealing with $50k in goods, not a $9 purchase on Amazon. 

The global problem with B2B wire transfers & checks

Of course, businesses could use wire transfers and check. But there are risks involved with traditional global payments: you’re never entirely sure who you’re dealing with and whether or not the other individual will send the goods for which you are paying. 

There are of course credits, bank guarantees, and even escrows for global trade payments, but most of these solutions are based on outdated processes, have high fees, require tons of documents, and have slow processing times and high validation needs. “In the year 2020, global trade should be more efficient, digitized, & modernized on a global scale,” said Asnee.

How does Shoptaki solve global trade issues?

With Shoptaki, global payments can be simplified based on their collaborative AI technology. Within Shoptaki’s platform, each AI agent has a different task — from KYC to compliance, AML, remittance, and others. These AI agents are working together to streamline the transactions so that every piece of the transaction can come together in seconds instead of days. 

For example, to solve the KYC components, Shoptaki uses a universal ID called Smart ID — a digital ID that determines if you are a real human being or a potential risk. (And of course, it’s GDPR-compliant.) 

What about blockchain

Asnee calls the tech that powers their platform “smatchain,” and, no, it’s not just blockchain with a cooler name. In fact, on Asnee’s LinkedIn, he flatly states that Shoptaki “is NOT blockchain.”

While blockchain has shown some promise, Asnee doesn’t see it as the financial answer the global business community needs. He thinks there are several security flaws inherent within blockchain. Plus, while immutable transactions within blockchain may seem like a great security feature, immutable transactions are too rigid for real-world business. Deals are dynamic, not static. Inevitably, a business will find itself in a situation where the deal is altered, and the transaction needs reversal.

And that’s the central issue with immutable transactions — they don’t account for changes within the financial, business, or legal landscapes. But, Shoptaki’s distributed AI can address many of these changes in real-time.

How difficult is it for a business to move to Shoptaki?

While moving to Shoptaki doesn’t require a huge financial investment, Asnee says that he’s had to be flexible when dealing with businesses built on legacy payment solutions. (He said that ATMs were still using Windows 95 until just a few years ago!)

As you can imagine, Fortune 500 companies tend to be stubborn when it comes to upgrading their entire infrastructure.

We hope they start listening!

To find out more about Shoptaki, go to their website, or email Asnee at asnee@shoptaki.com.

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Until next time!

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