A Martech Fireside Chat with Airwallex
2021 is quickly shaping up to be a year of the tech stack. It doesn’t matter if you’ve been in the digital game for years or if you’ve just pivoted last year because of COVID-19, the tech race is on and there are plenty of new and exciting platforms and applications to help you improve your business online.
But with so many out there to choose from, a common request I hear from my clients is: how do I find out about all the different platforms? So I’ve decided that the best way for me to help is to jump on Zoom and have a chat with the marketing technology platforms themselves; and recording the conversation for others to also hear and watch.
Martech Fireside Chat Episode #1 – Airwallex
My first tech platform is an Australian business out of Melbourne. It’s a fast growing tech unicorn, and has the potential to disrupt the financial services sector at home and overseas. It’s name is Airwallex.
In my chat with David, I asked him the following questions:
- What is Airwallex and what does it do?
- What their products are?
- How can businesses use them?
- What is the implementation process?
- What trends he is forecasting in 2021? And
- Any exciting news he can share about Airwallex in 2021?
If you’d like to find out more about receiving priority onboarding and getting your first $20k converted for free then visit Airwallex.
Or contact us to chat about your business and how Airwallex can work with your tech stack and ecosystem.
Disclosure: Now Comms Group is an Airwallex Partner agency.
All right. Welcome everybody. My name is Kingston Lee-Young. I’m from Now Communications Group. And with me is David tan from Airwallex, who’s the channel partnership manager. Thanks for spending time with me today, David.
So I guess I wanted to get you onto this chat at the start of this year, certainly there’s a lot of things happening in the financial services space. And I wanted to unpack a little bit more and find out more about Airwallex because really you’re not a bank, you’re not a funds transfer company. So how would you describe yourself and what do you do?
Yeah. Great. Well, yeah, it’s a funny thing. It is a little bit hard to describe what we are because we do quite a lot of, you know, different things. So I’ll step back a little bit. Airwallex was founded in Melbourne, exactly five years ago, almost exactly. We were the fastest company in Australian history to reach unicorn status, which is a private company valued at US $1 billion or more. I think now we’re valued at around $2 billion, and essentially what we do is we allow businesses, particularly SMEs to collect, convert, and transfer money around the world, and the vision of the company is kind of like, you could say, the AWS of financial services. We want to be the platform that all businesses are using when they’re operating globally, and you know, some, some types of businesses that see a lot of value out of us, e-commerce businesses or digital businesses, that essentially have customers or suppliers or staff overseas.
Okay. So tell us a little bit about some of those products that you’ve got.
Yeah, so, so we have, we have, three main products right now. The first one is global accounts. So these are local bank accounts in foreign countries, and you know, businesses use Airwallex to set up, for instance, a US bank account that they can then get paid into, by their us customers. Second is our FX and conversions product. So we can, enable customers using Airwallex to transfer money around the world. All kinds of different, different currencies into different countries. And this is faster and around 90% cheaper than, Big 4 banks. And the third part that we have is a cards product. So these are multi-currency visa debit cards that allow businesses to spend in different currencies, and then even issue them to their employees to use as virtual employee corporate cards.
So the foreign currency accounts product, let’s unpack that a little bit. So I guess if, if I’m a e-commerce business here in Australia, I’m selling to customers in the US, I guess I’m going to have to think about my international pricing and how I’m going to charge clients and customers in the U S so tell me how this could sort of work if I’m, if I’m selling to US customers.
Yeah. So, so this is something that a lot of businesses, sign up to us for one, because it’s free to have these accounts, and the second, and probably the biggest reason is because it’s such a pain to do this, yourself, especially as a, you know, you’re not a huge multi-national that has offices all around the world, you might be, you know, a small, a small company based in Sydney, in order to set up, for instance, a US bank account to get to collect funds from your US customers. You will actually have to fly over to the States and go through a bunch of paperwork and you can take weeks or months to do that. So what they do with us is they will get onto our platform, just navigate to the tab, to open a global account.
It’s literally two clicks and a few seconds, and you have, your own US bank account. That’s actually located in the US as well, which means that you can then, put that on invoices, give that to whoever’s wanting to pay you, and that’s in your legal entity name as well, but also you can attach this to a payment gateway, like a PayPal or a buy-now-pay-later, like a Klarna or an Afterpay and receive the USD directly into, wire that account into your Airwallex account. And then you can sort of do what you want with it there.
So how secure is that money? How does it work?
Yeah that’s a good question that comes up like a lot actually, because our, where our, customers are coming from are largely from the big four banks in Australia and obviously security and trust is a big thing that they’re looking for. So the way that the accounts are set up is that they’re what are called Clients Segregated Trust Accounts. So this means that, if anything were to happen to Airwallex, obviously we’re very well funded and we have been around for a while now, but yeah, if anything were to happen to us, the money is not going to go to us or to the, you know, the liquidator or something. That money is held in trust and then will go back to the trust owner, which is the, you know, Kingston if Now Comms has an account with Airwallex, then that account is owned by you guys. So you guys are the trust, so you’ll get that money back into your main bank account.
Okay, nice. And so how many accounts in different countries can I set up around the world?
Ah, I think it’s, I think you can set up, as standard, it’s like five accounts in each sort of region, so you can set up in the US UK, Europe. We’ve just released capability in Japan as well. And we also have an account in Hong Kong that does like 10 different kinds of currency.
Nice. Nice. Well, I guess let’s get onto the currency conversation then around FX. So yeah, saving money, is probably a really important thing. Nobody likes paying lots of foreign exchange fees. How does all that work?
Yeah, so we have a proprietary technology, which is how we, we have such low rates. So rather than going through an intermediary bank or something like that, that some other companies might do to get their, their rates and then add on margins there, we have relationships directly with liquidity providers and our technology is it allows us to ping these different multiple liquidity providers and get the best rate at the best time for the client. And then the big thing is that we have such low overheads, they’re sort of fixed costs for our business is so low, that we can, we can offer a much smaller margin. Much more than markup on the on the sort of wholesale currency rate, which means that, you know, comparing to like a NAB or an ANZ, our standard rates are about 90% cheaper.
Wow. Nice. And so I guess what sort of businesses should be considering this?
So we’re not, so there are, there are a couple sort of tiers of businesses that we’re not right for. So I’ll just start off with that cause we’re right for at least one of our products, we’ll be a good fit for most businesses in Australia. But some examples of ones that aren’t probably a good fit would be one, that’s doing, that’s not doing anything internationally. So they might be a hairdresser for instance, or a plumber and all of their clients are local. They’re, you know, they’re not sourcing things from overseas very much. They don’t have staff like outsourced. They probably wouldn’t really see much benefit from using us. Also a huge multi-national company like Nike, for instance. The platform that we’ve set up is what they will have already set up themselves as a huge like multi-billion dollar company.
But what we’ve done is we’ve sort of set up this platform for smaller businesses. So for small and medium sized businesses to use. So for that’s like the businesses that wouldn’t see much value. Businesses that are doing anything internationally, so they have customers overseas, this is a really big one because they can use the bank accounts to collect the funds into, and then they can, they can decide what they’re going to do with the funds. Also businesses that are, digital businesses, they will generally have really high technology expenses. So AWS is a good example of, of a kind of expense that can be put on our cards. And you can save around 3% on your bill, which can be tens of thousands, if not hundreds of thousands of dollars per month for a technology company.
Yep. What about, , if you are an Australian business, but you’re buying products from overseas, so you’re importing, you’re going to have to transfer money to a manufacturer or a supplier. Can it work in that instance?
Yeah, yeah, of course. This is one of the biggest use cases for Airwallex then. And actually I was talking to a client recently who is a really fast growing and well-known active wear brand in Australia. They’re actually expanding overseas now they’re at that stage, but they grew so quickly that the systems and processes that they had when they first set up, when they were first, you know, a tiny sort of startup, are still the ones that they have kept in place, meaning that they were using NAB, like you know one of the big four banks, they were using them to send around $500 grand USD to China every month to pay for supplies, and you know, this is just something that they hadn’t really hadn’t really thought about. It wasn’t really a conscious decision, that was just their main bank. After switching over to us, they were able to send the money in, you know, in the same way. It actually got there a day earlier. And the biggest thing was that they saved around $20 grand per month on each of those $500 grand orders. So you know, buying supplies from overseas is one of the best ways that you can save money with Airwallex.
Yeah. Nice, nice. A lazy $20 grand per month saving. That’s quite nice. And I guess let’s, let’s talk about the third product that you’ve got, which is cards. So what’s, what’s the card?
Yeah. So, so we actually, have become principal issuers of Visa cards. So we have the relationship directly with Visa and these cards are really cool. They’re, right now they’re completely virtual cards, meaning that literally, they’re just, you spin them up in your account and you’ll get an image of a card and the details of the card, but you can then put into, whatever sort of provider you’re wanting to use that card on like, like a LinkedIn or Klaviyo or, or whatever SAAS you’re using. They also are able to be used for employees. So, you know, your employees could each have a virtual card. This is actually something that the Airwallex staff in Melbourne, we beta tested, so for the last couple of months in 2020, we all had, you know, a virtual card on our phones. And that was topped up with $50, every month. And we were sort of tasked with going out and spending that, you know, buying, I don’t know, Uber eats or buying stuff online from, from stores or yeah, some of us did like team building activities. And they’re just a way to, I guess, shift the burden from the directors and the managers that always have to hand out and, or guard the corporate credit card. And instead of giving it to the people that are actually using it, the spend.
I’m sorry, it’s not really credit cards, more like a debit card or a cash card?
The equivalent would be, if you head down to the post office and you bought one of those prepaid cards or, you know, the top up cards that you can put money on. I mean, that, that would be an equivalent. What would you say?
Yeah. Yeah. More, more similar to that. I guess the, some big differences where you can actually edit the cards in real time. So say, you know, Kingston, maybe you’ve got a staff member who’s going on a trip and normally they’re, they’ve got like a hundred dollars per month limit on their card, but, you know. Well, yeah, eventually when the borders sort of open up and international travel is a thing as well. The cool thing about these cards is that you’ll be able to go in to Singapore or London or something and use the same card and it will automatically convert the currency and charge, if you have pounds, it would just charge your pounds. If you need to convert from AUD to pounds, instead of it being like some huge, crazy exorbitant, rate. It will be the Airwallex rate which is, which is very low.
Nice. Nice. I guess the digital world has benefits. I guess, you know, from a business perspective, you know one of the things that’s always a bit of a challenge, when we talk to clients and customers is, is this sort of technology stack and how to bring it all together. So, you know, if there are businesses out there that are looking to bring on board Airwallex and try it out, like how easy is it to implement or apply online how does it integrate?
Yeah, so, so where, I mean, Airwallex is very, very simple to fit into the current sort of tech stack that you’re already using. So we don’t really require any major integrations or dev work or anything like that. Although we do have, all of our products, they have a public APIs and you can integrate them if you, if you want to. But most clients use our web app. So they’re able to, for instance, with the bank accounts, they’re able to input them into, into a payment gateway or buy-now-pay-later to collect those funds directly into. Also with, accounting software, for instance, Xero is, is our, you know, is a close partner of ours and a lot of our customers and prospects as well, are using Xero. And so this integration allows businesses to save time, that is normally spent on, on manually reconciling, international payments that come in, because I might come in, they might spend a hundred bucks on that, on a card, and then I’ll come in to and show up in Xero as, as $134 AUD. So they need to manually reconcile that with, with the spend, the international spend in Airwallex and the integration, it will automatically do that. So it saves a lot of, lot of time there.
Yeah. Yep. Yep. Okay. So you can kind of see that yeah there’s different benefits for different sized businesses. Certainly those that are maybe medium size corporates thats got quite a few staff that yeah, will eventually be traveling around or do need expenses. Versus also online e-com stores who are buying stuff from overseas, importing or selling to customers. So I guess the important question then for all of this is, you know, what are the fees and what’s the setup requirement.
So that’s, I think one of the biggest, features of, Airwallex is, that there’s very simple setup. So it’s completely online. It should take around 15 minutes and you, sort of just upload your IDs. You tell us what you’re going to use the account for, and it goes off to our, you know, our onboarding team and within, you know, two or three days, you will have your account. In terms of the costs involved there, Airwallex is largely a free platform. Literally the only time a client pays us is when they’re converting from one currency to another. So there’s no setup fees. There’s no monthly fees as well. So you don’t have to, you can get an account today and you might not use it for two months. But you’re not going to be paying for it while you’re, while you’re not using it. And then when you do decide to use it, most likely the reason will be because you’re saving money by using it compared to a big bank or some other sort of remittance provider.
Yeah. Okay. So, so I guess, yeah, no cost to join, no costs ongoing, and the benefit is you get a low foreign exchange rate.
Yeah. Yeah. Well, that’s, yeah, that’s one of the benefits, I guess another one is, the ease of use. So, so streamline operations. So, another, another e-commerce business I was thinking about they had, they were an Australian business, but I had customers in the US, UK and Europe, and they’d already set up things like they’d gone and set up bank accounts, anything, and we’re already collecting things. But the issue was that they had, I think HSBC in London, Bank of America in the US some other bank in Europe, and none of them talk to each other. And so they, they had to, it was a big admin effort to sort of send money between these different things and they didn’t talk to each other and they didn’t integrate, with you know, with Airwallex and businesses like that that’s operating internationally. They’re able to collect everything in one place and, yeah and then decide to sort of convert or pay that out by a bank transfer or a card payment.
Yeah. Nice, nice. So I guess, you know, we’re at the start of 2021, it was good to see the back end of 2020. What are you sort of seeing in terms of trends for this year or any exciting news, for you guys coming this year?
So, so 2020 was a, weird year, obviously. And we had a lot of large travel clients actually, so, so things like online travel agencies, they use us quite a lot that obviously took a really big hit, , during COVID, but something that we had, you know, sort of bet on was that e-commerce was going to be, more than make up for, that sort of dip in some of the other industries that we, that we service. And that has happened and probably more than we were expecting and where we’re expecting that to sort of continue to happen. So we were thinking that this sort of shift to digital commerce and e-commerce, and particularly cross-border e-commerce, would happen maybe five times slower than it did because of COVID. So, we’re expecting that this is, you know, this is going to be increasing this sort of moment, the shift of businesses going online and also businesses going international to find their customers and suppliers.
Another one is outsourcing of staff. We saw quite a lot of, our current clients and also new clients that were, you know, they, they might’ve had to lay off staff in Australia, or maybe just shelve their plans for hiring more staff in Australia. And they moved to for instance, outsourcing to the Philippines. And why they used us for that, because they will pay, they do batch payments for their salary. And then also give the virtual cards to their Filipino staff to be able to purchase things, you know, suppliers or stuff that they use to get their work done in the local currency. Oh, and one other thing as well, that I was just thinking is, particularly dealing with e-commerce businesses there, they had, they had already been sourcing a lot of their stuff from overseas, but that has become even more sort of prevalent. We’ve seen that China is a huge market for sourcing suppliers, obviously a lot that is based on costs, but then Europe has become a bigger one as well, particularly for, fashion brands that are going for sort of quality over, over price.
Yeah. Yep. I guess as the sort of global trade plays out, and stuff that’s happening in, certainly in our region in Asia, you know, those that are relying on big markets, like China are probably having to also look at expanding to other markets. So are going to need to sell to multiple countries and then obviously sell in different currencies. Yeah, it’s interesting. So 2021, what’s the forecast looking like? What are you excited about?
In terms of, in terms of Airwallex? Well, what I’m excited about is I guess the pace that we’re, that we’re growing up, not just our, sort of, you know, our team, here in Australia, in Melbourne, but also particularly in Europe and the US, where we’re growing out our teams pretty aggressively over there. In terms of features, so I think a really big one that, I mentioned the three products that we have now that have global accounts, the FX conversions and transfers, and then cards, the final sort of missing piece, there is payment gateway. So this is something that, where we’ve been working on for quite a while, and we’ll be releasing this year and this payment gateway, which will be sort of maybe similar to a Stripe or PayPal, this will allow businesses to collecting true multi-currency, which is really unique. And they’ll be able to sort of collect that money in different, different currencies, hold it, convert it, and then pay out as well, in whatever currency they want. And obviously as well as part of being an Airwallex product, there’ll be some cost savings there that we can give to clients. And another thing is the mobile app. I think that’s a pretty cool one that’s coming up. So I mentioned already the employee cards. So this will be, more of an expense management, sort of app, that they will hold a card for an employee for instance, and there’ll also be functionality with being able to sort of take pictures of receipts and have that sort of, the expenses sort of reconciled. And there are some other things as well on the horizon that we’re expanding the current, sort of products that we have. So, so supporting more bank accounts around the world, increasing the amount of currencies that we can pay out and to the number of countries we can pay out as well. Especially covering more of Latin America and in the Middle East.
Okay. Yep. So how many currencies do you have?
So there are more than 20 currencies. All of the big, major currencies, as well as quite a few, exotic currencies, like, Filipino pesos or Thai baht. We can send to more than 130 countries as well.
Nice nice. If you’re trading or doing business with that amount, you’re in a very good spot. Look, I think the last things is any interesting sort of tips, in terms of, you know, what’s happening in this world and, you know, somebody coming in and if they do want to apply, you know, what’s a couple of good tips in terms of helping them to onboard and get the most out of Airwallex.
Yeah. So, so I guess some, well, if they were interested in, in signing up and getting an account, , they can go to www.airwallex.com/nowcomms, n-o-w-c-o-m-m-s and, you know, because you’re a partner, anyone coming through that, they will get priority onboarding and account management. So instead of waiting two or three days, it might be, it might be one day. And then also they will the first $20,000 AUD that they convert through us in their first month, they’ll be able to do that for free. So we won’t take a margin for that. And the equivalent sort of saving would be around 800 or so dollars, maybe up to a thousand dollars if they were doing that through a big four bank. So it’s quite a cool sort of little offer that allows, you know, interested, like interested businesses to sign up, and not really have that risk that you know, that they’re going to use it, and then it’s not going to be what they want. And then they’ve, they’ve sort of, you know, wasted a bunch of time and money.
Definitely free offers like that always great, you know, coming on in trialing it, saving a bit of cash. $800 is pretty good. But then, you know, if they want to continue then, I guess they can just keep going month to month. If it’s not for them, they can just finish can’t they.
Yeah, yeah exactly. And I think like, like I mentioned before, there’s no monthly fees. So we, although that being said, we have, we have a very good customer retention rate. So essentially businesses get on us and they, they stay on us to use the products. And generally we see that they, they come for one of the features. So it might be because they need a bank account in Europe, or because they need to pay a supplier for a big shipment that’s coming up and then they have the account and then they learn a little bit more over the next weeks and months, they learn a bit more about what they could do. And they’re like, Oh, cool. I can, I can put my SAAS bills on these cards or I can, I can send this money that I’m paying to my outsourced staff through Airwallex in batch payments.
Definitely I think that’s, that’s certainly one of the reasons why we, we like working with you. In terms of that, you’re right, people will come in, there’s certainly one product or a digitally modern business. But then there’s, there’s lots of different things now that you can start to get into. So if you come to the FX rate, save a bit of money, then move into the cards. It is good to see that you’ve got this roadmap coming. And, and certainly I think that payment gateway, is a really important one, obviously pits you against, some, some other interesting players out there, but, I think, you know, in terms of your ecosystem and tech stack, it really then start to join the dots for you and, and makes a really good offer for someone to consider you.
Yeah. Yeah, definitely. I mean, that’s a, I guess another, another sort of thing to keep in mind about Airwallex is that we’re constantly adding things, and improving the product. So when I joined around a year and a half ago, we didn’t have cards. The amount of, you know, sort of bank accounts that we could set up was more limited than it is now. And the, you know, the user interface was a lot less, you know, lovable than it is now. And we’re, we’re sort of constantly changing things and improving things. So, if you’re on it now, it’s going to be even better in, six months, and in 12 months time, it’s going to be even better and then we’ll have some new functionality.
All right. Well, thanks very much David, for your time today. And it’s a good chat and learning more about what Airwallex does. For those of you who are interested, don’t forget to find out more and jump onto www.airwallex.com/nowcomms. And from there, you get priority onboarding. So if you go through the normal, link and website, you won’t get this priority onboarding. And then also, as David mentioned, the first $20,000 that you convert will be free. So why don’t you jump on that, save about $800 to a thousand dollars compared to a big 4 bank, sign up totally online and should take a couple of days. I think from our perspective as a Airwallex partner, we’d love to be able to help you get this set up on your business, if it’s right for you, and we can help you work out how it can work in your tech stack. And if you do need to do any integrations, we’d love to have a chat. So David, thank you again for the time. And, I think I’ll definitely buzz you again when you’ve launched the payment gateway, and we can have another fireside chat.
Thanks a lot Kingston.
All right, thanks. See you later. Bye.