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The Paytech Magazine Thought Leadership

Exclusive: ‘Going the extra miles’ – Toby Young, Ebury in “The Paytech Magazine”

Banco Santander’s investment in Ebury – the award-winning provider of financial services to internationally-focussed SMEs – will allow it to continue its globetrotting quest for ‘borderless’ transactions, as Chief Technology Officer, Toby Young, explains. Toby Young | Fintech Finance

The phrase ‘small world’ has never rung truer than when describing cash management services provider Ebury – the UK company whose stated mission is to create a ‘boundaryless’ world of payments.

Established in 2009 by serial entrepreneur Juan Lobato and financial services expert Salvador García, Ebury is one of Europe’s fastest-growing fintechs and is committed to ‘removing global finance barriers’ to achieve ‘as few boundaries as possible’.

Its services include everything from providing CBILS (Coronavirus Business Interruption Loan Scheme) funding in the UK, to trade finance, international payments, mass payments solutions, currency accounts and collections, all via its proprietary online platform. At the core of the business, is providing SMEs with access to the financial products they need to expand across international borders.

Growing fast, with 24 offices globally, Ebury has been recognised by a string of awards, including the FT’s Future 100UK in 2018/19. Its commercial ambitions have been jet-propelled, recently, by a string of deals, most notably a major cash injection by Banco Santander, which acquired a 50 per cent stake for $453million in April.

Ebury’s diverse services, which its website describes as ‘intuitive, fully auditable and secured by design’, are delivered by its own application programming interfaces (APIs) and platform, which can provide automated solutions for ‘crossborder and transactional banking, including a test environment, as well as complex tracking and reporting, and automation of business processes’.

It prides itself in proving the kind of customer service, usually reserved for a bank’s biggest customers, boasting ‘whether you’re an international trader, an NGO, an ecommerce platform or a small business owner, our solutions are designed to create a seamless international finance process’.

Over the course of this, the most challenging of years, the global transaction platform has built out its capability in a number of ways. In May, in the midst of the coronavirus pandemic’s first wave, it launched Ebury Instant, enabling its clients to make instant, currency-agnostic payments. Where both parties are Ebury clients, it deposits payments into the recipient’s account immediately, in their originating currency.

Then in September, it was one of five fintechs to share £80million of funding (Ebury’s share being £10million) from the UK government’s Banking Competition Remedies (BCR) Pool E fund. A month later, it announced its first acquisition – of Frontierpay, a step that increases its global reach exponentially, and provides a major new business line, that of payroll payments, which Frontierpay delivers across 180 countries. Notably, it also gives Ebury a way in to the lucrative Asia-Pacific region.

Earlier this month, Ebury joined forces with fintech Cobase, giving it access to the leading fintech’s Cloud-based, corporate multi-banking platform, while Cobase will give its corporate treasury clients access to Ebury’s services. This announcement followed the launch of Cobase’s new Liquidity Forecasting and Foreign Exchange (FX) Exposure Management modules, enabling corporate treasuries to optimise cash positions and automatically hedge their foreign exchange risk. Chief Technology Officer at Ebury, Toby Young, says the industry backdrop against which Ebury is making such strides is one of ‘dramatic change’ in payments.

“Over the last decade, this has been led by rules and regulation. The revised Payment Services Directive (PSD2), and the opening up of payments, away from banks to all payment services providers, has been the main driving force,” he says.

“And, as those regulatory opportunities have opened up, technology has stepped in to provide services that people like us can utilise, or build, to provide our customers with a service that would otherwise only ever be provided by a bank.”


He gives an example of what such services can look like in action for dients: “Take a flower wholesaler who is importing flowers from all over the world – maybe Kenya, Korea, or the Netherlands. Perhaps he’s buying tulips and knows exactly what he’s going to pay for them, so he knows what the margin is on the flowers he’s bringing in. Or he should do, but the problem is exchange rate fluctuation. So that client could use Ebury to hedge against any currency fluctuation by booking a window forward with us, for Kenyan shilling or Korean won, or even euro, and draw down on that hedge during each month to ship in those flowers.

“Then, Valentine’s Day comes along and he needs to borrow £1million to ship all the roses. He doesn’t have £1million, so Ebury provides the capital. Though trade finance and will lend him £1million for three months, which he can draw down against his forward to buy those roses. We supply these types of facilities, both export and import, and supply chain capabilities, to our customers.”

Of the pandemic’s impact on these fluctuations, he adds: “Any good chief financial officer (CFO) will have a treasury policy in place that sets budgeted rates for foreign exchange transactions across both their in and out cashflows for the year. But what’s interesting is that we haven’t seen a significant change in supply chains as a result of the pandemic. We do both hedging and spot business. In the spot business, which covers companies’ day-to-day needs to make payments and pay invoices, we’ve seen a pretty stable flow.

“We did see a significant drop in the hedging business because, when the pandemic started, there was a huge amount of activity and we did a lot of business helping customers lock in rates because of that uncertainty. But soon after that, once we went into lockdown, that slowed down and we’ve seen it slowly grow back up to normal. We’ve also seen people perhaps opting for less lengthy hedges. However, this, too, is returning to normal in our supply chain corridors across the world, so I see that as a relatively good sign for the global economy as a whole.”

Despite Ebury’s clear success, meeting increasing real-time expectations, crossborder, has not been with without its challenges.

“We were one of the first non-banks to join SWIFT gpi (global payment initiative), which allowed us to track international payments from beginning to end. What this showed was fascinating – actually, international payments were pretty quick and 98 per cent were getting to their destinations, including some pretty exotic ones, within 30 minutes,” says Young.

“However, it also showed that perhaps a payment arrived at the beneficiary bank, but the reason the beneficiary themselves hadn’t received their funds was that their bank was doing a lot of checking to see whether the payment was good or not. We see that a lot in China, for example, where it’s not the correspondent banking chain that’s slow; it’s often the final beneficiary bank that wants to do final checks before crediting its own customer with the funds.”

The interfaces between global and local payment infrastructures don’t help, either. “But we are a direct participant in the UK’s Faster Payments scheme, so we’re familiar with working with instant payment schemes, which allows Ebury to complete customer transactions faster. Because we see the arriving funds faster, we can reconcile them to the customer faster and so release the payment on the other side faster. It’s all about being able to delight customers,” says Young.

Ebury uses its own white-labelled version of Accuity’s Validate to help rule out transaction errors.

“It’s useful to understand the routing up front, before you even hit a scheme and get an error, and Accuity’s Validate can get those types of information; not just working out if an IBAN (international bank account number) is valid, but also which schemes it is valid for.”

So, what does the future look like for this company that’s so impatient for change?

“Our partnership with Santander brings an awful lot of opportunities that we can utilise. We’re looking at some specific new jurisdictions that are helped by that, like Brazil, which is very exciting, and the corridors between South America and our very healthy businesses in Portugal and Spain are super-interesting, too,” says Young. “We’re also going to be working a lot with mass payments, after buying Frontierpay, which we’ve rebranded Ebury Mass Payments. We’re really excited about building that business into a powerhouse for international payroll, particularly.”


This article was published in The Paytech Magazine #07, Page 21-22


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