WaveCrest Group provides a customizable cross-border enterprise payment platform with a boggling number of capabilities built to a global scale. We connect with B.D. Goel, Chairman and CEO at WaveCrest Group to get his insights into his company’s history, the difficulties in building out the platform, and the road ahead for 2015. Read this exclusive interview on Payment Week.
Kevin Xu: What was the brainchild behind WaveCrest Group?
B.D. Goel: In 2006 I met WaveCrest’s current president Miles Paschini in Gibraltar. With my background in building global online gaming and e-commerce networks and his background in payments, we saw an opportunity to redefine global payment disbursement and create an online global payment disbursement network.
We started out by creating global payment disbursement using open loop prepaid cards for PartyGaming, which had millions of customers in more than 20 countries. Over the last six years, WaveCrest Group has grown into a global disbursement network, which enables anyone to disburse payment globally.
Businesses can now facilitate payments using MyChoice products or by leveraging its extensive set of APIs, which enable anyone to embed WaveCrest’s global disbursement network and enable highly customized payment disbursement within their applications.
What are the difficulties in building up this platform and adapting it to different verticals?
While internet and mobile device advancements have dramatically changed how we communicate and conduct commerce, the core global payment infrastructure of banks, payment processors, open loop networks and remittance companies remains highly fragmented and has not change much over last 40 years unless recently.
We collaborated with some of the most progressive global enterprises both in developed and emerging economies to create a disbursement payment network which collapses the highly fragmented value chain of banks, payment program managers, payment processors.
The process of developing the new technology platform to create a global payment disbursement network proved out to be more difficult than we thought due to complexity of complying with international rules and regulation and ensuring that while we make payments easy, we still prevent fraud and abuse of the payment network by criminals for money laundering and circumventing regulations.
We did not get it right the first time and as we made our platform available to different verticals. Three years ago we started developing the version 2.0 of our platform where we incorporated big data technologies, which enabled us to create real-time rules and extensive monitoring of payment flow through our network. Now that we have a robust platform available, it is a matter of enabling features on it to fit each individual vertical we want to serve—whether it be tax, transportation, gaming, etc. With our next generation platform, we have the ability to setup a payments program for a large number of scenarios. This gives us the ability to bring turnkey or customized offerings to clients worldwide depending on their individual needs.
What are the issues you’ve seen businesses facing that WaveCrest can solve?
Many businesses are still relying on paper payments to pay employees, suppliers, vendors and more. With that comes many operational challenges and inefficiencies, including additional paperwork and record keeping, and added costs, and the potential for fraud. Additionally, companies that are still making check and ACH payments may face challenges in conducting multi-currency transactions with employees, vendors or suppliers in other countries. This is where WaveCrest’s ability to disburse multi-currency payments is integral to conducting international business. As digital currency begins to play a role in mainstream financial services, we are also able to help companies maintain access to their crypto currency funds in order to make payments in dollars, Euros, or pounds.
What about government/tax payments, and why should they look to you to handle reimbursements?
We look at industries where there are large sums of money being paid from one party to another. There is an interesting payment model for both the government and tax vertical.
Regarding tax payments, we deliver two benefits. First tax preparers process large volumes of returns in the US between January and April. In many cases, they are delivering refunds to the taxpayers, who want a fast, secure, simple way to receive funds. Tax preparers can reduce their costs and streamline their processes by delivering refunds via prepaid cards instead of costly ACH or checks that are hard to replace if lost or stolen.
At the same time there are a growing number of people who do not use bank accounts. There happens to be a massive overlap between people who use a prepaid card to receive tax refunds and people who are unbanked or underbanked, or who don’t want to use traditional banking services.
There is a strong parallel in what we do across all industries. For the party that has to pay, we make it more cost-effective, and for the cardholder, there are a number of benefits that make card payment a preferred way to receive funds, including access to cash at ATMs worldwide, and the immediate availability of funds.
The government also makes a large number of payouts, including lottery winnings, unemployment benefits, workers compensation, unclaimed property payments, child support payments and others. Many times they use checks to make these payments. Checks have a tendency to get lost, misplaced and are cumbersome to manage and not cost effective. Moreover, to process the check, the recipient may have to pay a large fee. These processes can be simplified by using a prepaid card. As an example of how WaveCrest can power and bring efficiencies to government payments, we are working with the GA and MI state lottery to disburse lottery winnings on a WaveCrest-issued prepaid card. WaveCrest also offers additional features on all such programs like cash loading, bill pay, airtime top-up, person-to-person transfers and remittances, which are a big advantage to cardholders.
Judging from your product offerings, you seem to have built out a full range for not just payments but loyalty and rewards as well on a truly global scale. What’s a good estimation for the amount of man-hours in development? The regulatory challenges in doing global payments and payouts?
That’s correct, we help businesses pay a large variety of constituents, with numerous forms of stored value –whether that’s US dollars, Euros, pounds, digital currencies or even airline miles. Our platform allows businesses and consumers to easily and quickly view, spend or exchange their stored value to meet their current needs. That is our vision for a modern global payments system and it has taken us more than hundred man years in development.
WaveCrest has spent years obtaining licenses to be able to target markets on a global-scale. The business of payments is complex, but when you begin conducting cross-border transactions it becomes increasingly important to know the legal and regulatory implications involved.
For example, if an American headquartered company pays employees in the EU, it must review and understand the regulatory directives for the EU, as implemented by each member state, as well as any additional, more protective regulatory requirements for that country. Businesses must recognize how these factors apply to citizens vs. residents and identify options for compliance, including possible partnerships, agent/distributor relationships, or obtaining their own licenses.
In addition, there are a number of practical and cultural considerations to take. For instance, market customization is perhaps one of biggest challenges for US companies entering the global market place. While there might be consistent a consistent regulatory and financial strategy across the EU, each individual country and its customers must be managed individually.
What are the demands of emerging markets? Established markets? What’s next for WaveCrest in 2015?
Legal and regulatory concerns will continue to become increasingly complex areas for the prepaid industry. In addition, entrepreneurs and corporations will continue to have unique payments ideas and needs. Our economy is truly global, so we’ll continue to see demand for multi-currency/multi-value transactions that occur in real time around the world.
In terms of what the future holds for WaveCrest, we built our platform to serve this global marketplace and we’re finding new applications every day. We will continue to provide unique offerings to best serve our customers, by helping them to navigate the legal and regulatory waters and developing payments scenarios that reduce friction, and improve transactions on a global scale.
Some of the most exciting products we are developing are ones where we are bridging existing systems or forms of payment with new and emerging ones. For example, bridging the gap between digital currencies and traditional payments products.
Bhagwan D. Goel, Chief Executive Officer and Chairman of the Board, WaveCrest Group
B.D. spent 18 years in Silicon Valley where he helped in the creation of Travelocity, led the ecommerce division of Infoseek/GoNetwork until it was acquired by Disney. At Neoforma as EVP of Products and Services, he was part of the executive team that led its highly successful NASDAQ listing in 2000. He moved to Gibraltar in 2006 to be the COO of PartyGaming (now bwin.party). While at PartyGaming, he experienced firsthand the complexity of international payments which led him to found WaveCrest.