Freemarket today launched Network Navigator, a liquidity matching engine for emerging markets.
Network Navigator puts businesses together who move money into, from and between emerging markets so that they can cut the hidden costs of moving money.
Network Navigator matches businesses who have liquidity in different currencies to make payments faster. When Money Transfer Operators (MTOs) want to make payments in emerging markets, they can be matched to a local Payments Service Provider (PSP) that has liquidity in that market’s currency and a local payment network.
When both businesses are on the Freemarket network, they can use account to account payment functionality, moving money instantly at lower cost, bypassing the correspondent banking network.
“Correspondent banking is failing emerging market businesses. Payments are slow, expensive and sometimes fail. Network Navigator helps address these challenges by connecting businesses that move money into, from, and between emerging markets with trusted partners across the Freemarket Global Payments Network.” said Andy Lyons, Freemarket’s Chief Growth Officer.
“The biggest cost of moving money in emerging markets is not the payment fee. The hidden costs are the combination of trapped liquidity, delayed settlement, FX friction, compliance overhead and lost commercial opportunities. Together these create a persistent drag on working capital and damage to return on capital that often exceed the transaction fee by a wide margin.”
To ensure payments can settle, firms, banks and payment providers maintain prefunded balances across multiple markets in Nostro accounts. The opportunity cost of prefunded nostro balances alone can be equivalent to a firm's cost of capital, which for many financial institutions is often modelled in the high single digits.
Settlement delays cause increased working capital requirements. Time zone issues, banking hours and long correspondent chains means cash is tied up for longer. If FX conversion is included, changes in exchange rates, widening spreads and the need for hedging increases costs further. Across multiple payments the cost is meaningful. Cash in transit cannot be used to pay suppliers, invest, reduce borrowing or earn interest.
Taken together these hidden costs cause a persistent drag on working capital. Network Navigator helps businesses reduce these inefficiencies by connecting them with trusted payout, FX and liquidity partners across the Freemarket Global Payments Network, which means they can settle instantly, and safely 24/7.
ENDS
For more information please see: Explore the Freemarket Global Payments Network
About Freemarket
Freemarket is the global network for fast, secure, borderless money movement. Its interoperable hybrid-rails infrastructure underpins a network with embedded stablecoin, liquidity, payments, treasury management and FX capabilities, all governed by a best-in-class compliance function. It is the only non-issuer with both deep fiat infrastructure and live stablecoin mint/burn capabilities through regulated partners. See more at: www.wearefreemarket.com
FreemarketFX Limited is authorised by the Financial Conduct Authority (FCA) – Firm No.585093.
FreemarketFX Ireland Limited is authorised and regulated by the Central Bank of Ireland (Firm No. C456818).