Hey, what's up everyone? Recently, we've been receiving inquiries from prospects asking if they can create their own in-house global RTP networks using our services. Our response? Absolutely, GO FOR IT! For this article's purpose, however, I want to explain what a global RTP network is and how you can build one with Routefusion.
First off, what exactly is a global RTP network? It's what companies like Nium, Thunes, or Wise have developed. Essentially, it's a network that operates outside of traditional Swift rails. In a nutshell, you'd open accounts at various institutions in different countries. You'd maintain a reserve of funds (float) there. So, when a customer wants to make a payment from USD to MXN, instead of initiating a brand new cross-border payment over traditional wire rails, you can manage the funds between your existing accounts.You can set your own exchange rate, accept the funds into your USD account, and then payout to the beneficiary using your account in Mexico, over the local SPEI network. Most countries (and more recently the US), have real-time payment networks, ensuring instant settlement of payments!
Building an in-house global RTP system has some cool advantages. You have complete control over the exchange rate and customer pricing, more visibility and control over transactions, and you can pay out instantly (or not, based on your use case and risk level).
However, there are some downsides:
- Capital: Do you have sufficient working capital to reserve for float?
- Currency Risk: How will you hedge currency risks, especially with volatile currencies?
- Expertise: Having experts on staff to open bank accounts in various countries.
- Technical Integration: A dedicated team of engineers is needed to integrate various banking systems.
- Manual Processing: If you don't do integrations, you'll need staff to manually handle payments.
Clearly, these downsides are significant. To build these global RTP networks, you need capital, a trained staff, hedging strategies, etc. BUT, what if the only thing you needed to worry about was the capital? What if everything else was taken care of for you? Sounds too good to be true? It's not. It's a reality with Routefusion's APIs.
Ok ok, maybe it is a little too good to be true because we’re not in every country yet!
Even though we aren't in every country yet, we are expanding the network rapidly. Today Routefusion can open accounts for you in Mexico, Brazil, Colombia, Argentina, Europe, the UK, and the US. Once these accounts are open, you can manage everything through the Routefusion API or Dashboard. When your customers make payments, our webhooks can notify you when funds hit the receiving bank account, triggering a payment via the delivery bank account. If you're exposed to currency risk, our in-house team can help devise a hedging strategy for you. In just a few weeks, you can be up and running, having built your own global RTP network with a single integration on a unified API (and yes, we added the marketing words).
If this is something you're interested in, reach out. We've implemented this strategy for several well-known global companies. You could say, "It's not our first rodeo. 😉 🤠"