Source: Clear Junction
Clear Junction, a London-based global payment company that offers end-to-end regulated payment solutions based on in-house technology, has signed a fintech agreement with Paladyum Elektronik Para ve Ödeme Hizmetleri A.Ş. (PeP) that will help Turkish customers to receive cheap and fast remittance transfers from the Turkish diaspora living in the European Union.
By opening SEPA-addressable correspondent accounts for regional banks and payment operators from EU neighboring countries, Clear Junction lets them have a collection account enabling domestic consumers to receive p2p remittances from relatives living in the EU. Such account supports issuance of a range of individual account numbers (IBANs) which are provided to consumers.
Paladyum (PeP) is a leading Turkish domestic electronic wallet, which will leverage the relationship with Clear Junction by attaching of an individual account number (IBAN) to each of its wallets so that their owners can receive euro transfers via SEPA (the European interbank clearing network) and sterling transfers via FasterPayments, BACS and CHAPS (clearing networks in the UK).
This is how the service for consumer will work: Paladyum opens a correspondent account with Clear Junction, which supports a per-request IBAN issuance of account numbers - IBANs (a.k.a. Virtual IBANs), linked to the Paladyum account in Clear Junction. Paladyum, in turn, allocates a unique IBAN to each Turkish customer, who then share that IBAN with relatives in the EU. The migrant worker then makes a domestic bank transfer in euros from its local bank account in the EU. As soon as the money arrives to the Paladyum account with Clear Junction, the Turkish customer’s balance is credited. Clear Junction undertakes the regulatory scrutiny of the transfers based on knowledge of the originator, recipient and overseas payment operator.
Globally, the number of people who need to make low value, retail cross-border transfers has grown rapidly since 1990. Today there are more migrant workers than ever before, not to mention global nomads and international students. These groups, however, are grossly under-serviced by the international banking community, and international remittances are expensive and cumbersome.
Clear Junction offers a solution that enables domestic banks and payment intermediaries to have access to the banking system in the EU for offering fast and cheap remittance service. Traditionally, the main option for migrant workers are money transfer networks like Western Union or the post office, which are expensive, cash intensive and fall short of the modern digitization standards.
“Clear Junction is a badly-needed game-changer for extending the reach of the local fintech companies outside their domestic geographies,” said Dima Kats, CEO of Clear Junction. “We help payment companies in the workers’ country of origin to have a collection account in those places where workers have migrated to.”
Paladyum has partnered with Clear Junction as a part of its global expansion strategy. Through this relationship it is going to roll out a range of services for its clients in Turkey and their counterparties in the EU.
By partnering with Paladyum, Clear Junction adds Turkey to the list of geographies it serves. In the recent years the company has built similar relationships with payment intermediaries in the UK, Poland, Ukraine, Georgia and some African states.