Earthport and IPFA collaborate on untapped cross-border payments market

Earthport and IPFA collaborate on untapped cross-border payments market

UK-based payments shop Earthport is to adopt the standards laid down by International Payments Framework Association (IPFA) as part of an international drive to meet small business demands for more efficient cross-border payments services.

The IPFA, which was established in February 2010, is using the ISO20022 schema to create cross-border linkages between automated clearing houses, banks and payments processors.

In October, the Federal Reserve Bank and Equens processed the first transatlantic automated clearinghouse payments using IPFA standards.

Earthport, which is regulated in Europe as a Payments Service Provider and offers cross-currency transfer capabilities to 200 countries worldwide, is looking to tap into pent-up market demand for more transparent and efficient cross-border payments in the sub-$10,000 category. The Earthport platform operates as a central hub for routing and transferring payments across banking networks.

The link-up with the IPFA comes as the company publishes research conducted by analyst house Glenbrook Partners, which identifies a clear market need for "a mid-market payment solution that is easy-to-use, highly reliable, and able to route payments globally at a reasonable cost".

The research, conducted among banks and corporates worldwide, uncovered a deep sense of frustration over current practices and prices within the cross-border market. Respondents cited the biggest challenges as being the length of time it takes to clear funds, difficulty tracking payment progress and problems with payment reconciliation.

Hank Uberoi, executive director, Earthport describes the market as "the largest unsatisfied opportunity in the payments industry today"

"Payments systems set up decades ago, many of which have been retro-fitted to meet modern-day needs are creaking and groaning under the strain," he says. "With regulators calling for greater efficiency in the cross-border money transfer market, we are extremely pleased to be working with IPFA and its members to meet evolving market demand."

The IPFA will be providing an update on progress at the Sibos international banking conference in Toronto on Thursday, where it is expected to expand on plans to add further currencies and direct debit instruments in 2012 and the development of a framework for use in other territories, such as Brazil, South Africa, Australia and Canada.

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