Cambridge Global Payments
The primary expectation of any company engaging in payment transactions are that the sending and receiving of funds will be done quickly, efficiently and securely. Canadian-based Cambridge Global Payments began as a two-man operation in Toronto in 1992 and has since blossomed into an international workforce of about 430, making it a preeminent industry leader as one of the most trusted bank-independent providers of global payment and risk management services worldwide.
The Canadian Business Journal recently spoke with three senior executives at Cambridge Global Payments about the company’s continuing success in the marketplace, which now has the ability to transfer funds in more than 160 currencies for more than 12,000 clients around the world while moving in excess of $30 billion per year in what amounts to about one million annual transactions of cross-border payments. Cambridge is exceptionally well represented with several offices in North America and a European presence, with a head office in London, England. There is also blanket coverage of the Asia-Pacific region with headquarters in Sydney, Australia.
Previously the Managing Director, Corporate Development and Partnerships, Gary McDonald took the reins as Chief Executive Officer about two years ago when co-founders Bernard Heitner and Jacques Feldman moved into co-chair positions. But McDonald’s job description has essentially remained the same, which from a macro perspective is overseeing the entire company’s operations.
Cambridge Global Payments has made a massive transition as a company. It all started about six years ago and has been making significant traction over the past several years, the result of which has been to move the business from what would be termed a regional transactional brokerage to an international payments’ specialist. The company offers Cambridge Link, a trading and payments platform that guides users through the complexities of international payments and foreign exchange (FX) trading.
“We’re really concentrating on two key areas and that is international cross-border payments and what we would call hedging or risk management. We’re doing that with two really strong focuses. One is on the skill level and the consultative approach to selling and secondly, the technology,” begins McDonald.
A notable distinction that separates Cambridge from its competitors is that it’s one of the few companies to have automated its entire end-to-end cross-border payment process for its clients, including integration with the banks. Needless to say there are tremendous benefits in having a fully automated setup, including the assurance that each and every client will receive an efficient, straight-through process.
“The vision we have is to be the leader in the world in being able to offer up a fully automated, cross-border payment process. All the client really wants is for their payment to get to the location accurately and on time,” emphasizes McDonald.
Mark Frey is Cambridge’s Chief Operating Officer with about 20 years of business experience, including seven with the organization. Frey is responsible for overseeing many of the treasury inter-bank dealing operations as well as the sales and dealing operations in Canada. “At its simplest level we do two key things for our customers and it’s broken across seven distinct product lineups as part of our franchise,” he says. “The first key thing we do is provide foreign exchange services, payments and risk management solutions to manage currency volatility for mid- to large-sized corporate entities all over the world. The second key part of what we do is to provide payments technologies to incorporate a fully streamlined workflow solution for organizations that are processing cash flows and payments across borders around the world.”
At Cambridge, the goal is to provide an institutional level of sales, service, technology, expertise and product brand to a mid-sized corporation or customer that typically doesn’t receive that same level of care and attention from a tier-one financial institution. It’s a case of integrating with corporations’ native technology, whether it be an enterprise resource planning system or an accounting system to streamline and automate the process with respect to making their international payments with the same ease and efficiency that they’re used to making with their domestic payments.
The focus on corporate payments and risk management at Cambridge coincided with two major shifts in the industry that really began to take hold in 2014. First, there was the overall increase in cross-border transactions, currency volatility and a heightened regulatory environment. Secondly, there’s the use of ever-evolving technologies.
“Our corporate customers are coming to us for technology solutions to automate processes, to streamline the execution of cross-border payments, to support their accounts’ payrolls and we’ve developed specific vertical technology solutions in support of that,” notes Frey.
Managing the risk associated with doing business internationally, whether it’s foreign currency accounts payable or whether it’s a more export-oriented organization that is receiving payments in foreign currencies from customers all over the world, is another big part of the equation. Cambridge manages risks in receiving those foreign currencies and it’s also streamlining the process from a correspondent banking perspective to give companies access to a global banking footprint that makes it easy for them to conduct business.
A number of business industries are already taking full advantage of the excellent services provided by Cambridge Global Payments, with many more now following suit. International healthcare and travel-assist are prime examples of burgeoning markets. Cambridge is also the official and exclusive international payments provider for the Women’s Tennis Association, the principal international organizing body of women’s professional tennis.
“We’ve identified seven specific verticals but there’s a few where we’ve become leaders and experts on,” adds Chief Commercial Officer Anil Sawrup, a two-decade industry veteran who has also been with Cambridge for about seven years, overseeing sales and dealings in the United States and global enterprise sales. “The first one is Global Payroll and Relocation. These payroll companies are really aggregators and what they’re doing is providing an international payroll outsourcing solution. A company may have a Fortune 500 as a client. They may have the tax expertise but what they need is that level of technology and capability to deliver that payment effectively into that market. We’re seeing a huge demand for that as these organizations become the aggregators and experts and they’re looking for a partner like us to tie in the technology.”
A process that includes a thoroughly tested, robust system ensures optimal security. McDonald says there are continuous advancements on product offerings and features in terms of what can be accomplished with ongoing enhancements. “As with any technology it goes from an infant stage to a middle stage and finally a very sophisticated stage. I would say we are moving very quickly to the sophisticated level. We can apply our technology to very unique needs. As an example we are now able to use technology to both hedge and make a payment for a client and it applies to many industries where you need that dual approach to meet their needs.”
Frey and his operations team continue to make strategic investments in Cambridge’s technology in terms of rolling out a second set of web service tools that are geared towards the financial institution sector and the Fintech sector, enabling them to partner with organizations all over the world who are developing new technologies and capabilities as well as financial institutions that are still using older technologies.
McDonald, Frey and Sawrup are all quick to agree that the employee base and incredible skill level at Cambridge Global Payments is by far the biggest factor in the company’s overall success. “This is a complex product and requires a deep knowledge of the cross-border payment category. Having an understanding of the process and how it relates to the client is by far the number one differentiator for this company in the market. We have a great workforce and retention of staff,” remarks McDonald.
Sound relationship with regulators and banks is critical and Cambridge has established excellent bonds with both. It’s obvious the team is motivated to succeed, which is a direct offshoot of the original vision when the company began 25 years ago.
“The entrepreneurial spirit of this company is exceptional. We are very customer-focused and that was bred into this company by the culture created by the owners,” states McDonald.
Online trading platforms, file integration, web services and multi-enterprise solutions really began to emerge several years ago as the preferred option for many companies and it’s a trend that continues to this day. The demand from companies to leverage their back-office investments by ensuring that the cross-border payment process is automated through either an online platform such as a file upload, or even an API, has become really paramount in their priorities.
“We’re seeing a tremendous demand in the market from mid- to large-scale companies to fully automate. We provide that integration capability so that they can leverage the investment they made in their back-office in the cross-border payment category,” says McDonald.
Integration has reached the next level in terms of automating cross-border transactions according to Sawrup. In today’s market, companies can do the integration with the banks for domestics for the automated clearing house (ACH) or electronic funds transfer (EFT) runs but the financial institutions are unable to provide that all-important cross-border automation. They’ve invested a lot of money in their back-end systems, but it is Cambridge with all its professional industry expertise that provides all the necessary levels of integration to make the transaction seamless for the client.
A fundamental distinguishing feature that makes Cambridge noticeably different in the marketplace, especially compared to large financial institutions, is that the company is able to provide its corporate customers with a single-point of technology integration that provides them with access to more than 160 currencies and all of the payment channels through one secure, efficient gateway. As an example, there is no need to connect to a different piece of technology to send an in-country payment in the U.K, Canada or the United States. There is one point of integration where Cambridge can accept payment types of all varieties in all currencies everywhere in the world.
“We do much of the heavy lifting ourselves to provide the necessary level of service and automation,” notes Frey.
The U.K. Brexit
The surprise of the United Kingdom opting out of the European Union in a referendum vote in the summer of 2016 will have implications for Cambridge’s business and its customers, but McDonald believes it will be a positive result for his company. It is widely expected that there will be market disruption and volatility from the European market and other potential geo-political issues that may result with the overall trend towards anti-globalization in certain factions of the economic community.
“There’s potentially a licencing impact in that many firms operating in the space have licences through the FCA in the U.K. that are passported across Europe and the Euro zone community. We are actively engaged in processes of building out contingency plans that would allow us to continue our passport licensing regime across Europe by establishing relationships with other regulators. It’s all about preparation and being ready, regardless of what the regulatory framework looks like,” says McDonald.
Cambridge recently acquired the skills of a team of people that focus on emerging and frontier markets. They are very difficult to reach markets in an efficient and speedy way.
“We pulled this team together as a business unit out of New York. They provide the market the capability to move their clients’ monies into these difficult to reach markets. They’ve spent 35 years doing it as a team and we’re fortunate to have that within our own capability,” says McDonald.
Cambridge possesses a unique capability, especially in today’s marketplace, where many financial institutions and tier-one banks around the world are pulling back from some of the more exotic geographies that can be very difficult to send local payments in. Frey says it’s a challenge that is embraced by the team at Cambridge. “We hand have made significant investments to build out our correspondent relationships with banks and other liquidity providers so that we can simplify the process of making payment even in currency controlled markets like Brazil and China that are typically problematic for many service providers.”
McDonald, Frey and Sawrup believe some of these burgeoning markets will result in a high-growth area of their business where they service both corporate customers and tier-one financial institutions around the world that can access them for their expertise in making payments. It’s a key part of the overall expansion initiative and strategic focus in terms of broadening Cambridge’s global reach.
“We’re setting our organization up nicely to be able to look out of the traditional payment rails and look at other ways of sending payments more cost effectively and faster. We’re seeing that demand rise from the B2B market,” says Sawrup.
Meanwhile, Cambridge continues to accumulate numerous accolades within the industry, including the Deutsche Bank straight-thru processing award. It is consistently named one of Canada’s Best Managed Companies and has been given countless awards for its innovative technology platforms.
“We get a tremendous amount of pleasure in progressively moving this whole vision that we have with our clients,” says McDonald. “We continue to grow rapidly. As a Canadian-based company we’re now very geographically spread. Our U.S. business is a major part of our overall revenues.”
Based on history, it would be safe to assume the pace of technological innovation and implementation amongst both corporate players and financial institutions will continue at an even more aggressive rate and scale. The team at Cambridge is looking to take its impressive global reach of 160-plus currencies and make them all available through technology.
The international market is expanding drastically beyond major and minor currencies such that many emerging frontier markets are going to have the same technology access and the same usability. It is widely anticipated that there will be immense development outside what has been traditional means of moving money in a cross-border manner. Already there is significant incubation of Bloc-Chain or other different means of moving money, which is at its infant stage now but will mature sooner than later.
“What we have built in terms of our end-to-end technology and the ability for us to increase our productivity to meet demand leads me to believe we have just scratched the surface. There is unlimited potential in North America, Europe and APAC as well,” says Sawrup.
“The key message we want to get out that that resonates in the marketplace is our global market reach. The breadth of our products in terms of risk management tools and the technology solutions that we have to integrate with our corporate partners to deliver payments,” adds Frey.
“It reinforces to me the importance of our excellent staff and the skill level they play in allowing us to grow. One of the key things for the future is keeping the folks here motivated and be able to retain them. We are excited about what’s in store for the future,” concludes McDonald.