New Startup Passport Aims to Take the Pain out of International Money Transfers

Sending money across international borders can be subject to huge fees and delays. A new company called Passport hopes to ease that pain by eliminating the fees and completing the transactions in real time. It expects to be up and running in the US within the next few weeks.

Passport is the brainchild of financial entrepreneurs Robert Bell and Lorne Lantz. The product “enables enterprise and consumer payments in real time, between countries, across any supported currency combination.”

Passport utilizes a hybrid P2P and inter-bank model that has already been successfully implemented by Bell in the South Pacific between Australia, New Zealand, Samoa, Tonga, and the United Kingdom. This segment of the service was funded in part by the United Nations.

Passport will work along a volume- or performance-based pricing model for enterprises, and what Bell describes as a “low-cost model for consumers, similar to modern telecommunications pricing models.” Bell added that, in the UK and New Zealand, there are low-cost, real-time payment systems in-country that could serve as models.

Passport seeks out the fastest existing rails between financial institutions and uses those for the transaction. It plans to offer consumers the choice, where possible, of how to move money.

“We’re like CLS (continuous link settlement) but for small banks, and thus for retail and social payments, too,” said Bell. “I liken it to Skype for currency. We tapped the broadband features that banks didn’t know existed. We  found the parts of each bank that talk in real time, at least internally — the simultaneous internet, phone, ATM and branch banking systems. We find what the bank is best at — what is most available in real time — and connect to that host-to-host the same way banks connect to SWIFT in principle, but no committees, no stakeholder panels, just real time.”

Bell is from New Zealand, and as he told us, “we have had a retail electronic push payment system there for about 20 years, and an electronic bank interchange since the 1960s. This isn’t rocket science — but it is still a giant leap in a lot of ways.”

Passport is very much US-centric, although there are technological hurdles to overcome to get Passport’s system up and connected.

“Not all banks can handle it” — ‘it’ meaning Passport’s system — “which is why the calibration is taking a little longer here in the US than I thought. The US banking system is very different than the European or Commonwealth-grade banking systems I’m used to.”

“We need to be independently regulated, and seek approval at the central banking level to deploy in full force. This is a big project. We’re looking to launch trial services between US banks, and from the US to Asia and Oceania over the next few weeks, and will be releasing the service for customers to pilot following the sign-off of that process.”

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