San Juan, Puerto Rico-based FV Bank has added cross-border payment capabilities to its digital banking offerings to encourage customer retention.  

The new feature from the private digital bank runs on APIs and can send seven types of currency including U.S. dollars, euros, yen and cryptocurrency to 150 countries, according to an FV Bank release. 

“At the present time, we only offer accounts that are based in U.S. dollars. With that said, many of our customers have their operations in foreign markets, and most of the clients don’t have an interest in holding multi-currency accounts,” FV Bank Chief Executive Miles Paschini told Bank Automation News.

The cross-border payment capabilities begin by creating payment instructions through an API, receiving quotes for other types of currency programmatically, and then submitting payments into the system. FV Bank uses automated messages to provide the bank with status updates, Paschini added.  

“On the backend, we do have hybrid workflows for compliance authorization,” he said. “So, depending on the particular circumstances with the payment and the client, there’s a human intervention layer where the payment effectively gets approved or disapproved through a workflow. Once it is approved, it’s fully automated from there.”  

The capabilities can be accessed through a client’s online banking corridor, where the user specifies the currency they wish to send, and updates payment screen fields automatically based on the payment route the customer intends to use, according to the release. The service is the latest upgrade within the bank’s payment options, having launched a digital asset custody and settlement solution in November, Paschini told BAN. 

Growing cross-border payments usage

The use of cross-border payments is growing amongst small- and medium-sized businesses globally, with the functionality becoming more in demand from banking customers. According to Mastercard’s “Borderless Payment Report 2022” which surveyed more than 3,000 international small business owners, 52% of businesses are using digital banking platforms to send funds, and 80% say cross-border payment capabilities help improve efficiencies. 

“As more countries adopt financial data standards and create national digital currencies, we should see this trend of smaller banks launch cross-border payments,” said BAN technology analyst Bradley Herbert. “Most of this is based upon blockchain tech. Things like this used to be more so based upon cross-border partnerships with other FIs.” 

FV Bank, which raised $15.5 million over three funding rounds since 2021, is the latest in a string of financial institutions providing global payment solutions to its customers, as large banks such as $3 trillion Bank of America, $1.5 trillion Goldman Sachs, and $2.4 trillion Citi have each launched similar services within the last year.  

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