Verto said the acquisition will help it to better serve startups and small businesses in Africa and the MENA region, while also expanding its customer base beyond traditional banking channels. The B2B FX enabler recently unveiled a new online payment solution that allows users to conduct payments with any Visa or Mastercard bank account.
According to the data provided by SVB, it has been onboarding over 60 companies and venture firms since its collapse. The American bank provides startups with venture debt, credit cards, and term loans, helping them grow in both regions. This is a testament to SVB’s commitment to supporting innovative businesses across the globe.
In the wake of the recent banking collapse in Africa, startups have had to rethink their options for financial security. Founders and investors spoke to TechGround last month and said that they would hold funds in multiple accounts across big financial institutions, which are generally perceived as being safer. They also stated that they would leverage smaller fintechs such as Brex and Mercury that have more extensive FDIC protection. Though local and homegrown options for African startups were few and far between, it is likely unlikely to remain the case in coming months as fintechs such as Verto are getting in on the action, attempting to position themselves as alternatives.
Verto has long been one of the most popular cross-border money transfer and exchange platforms. It says its transaction volume is predicted to quadruple this year, thanks to expansions plans and new product launches. Safeguarded USD accounts add an extra layer of security to transactions, and are already being used by some of the company’s largest clients.
One of the challenges facing African startups is that, in most cases, they do not have bank accounts with U.S. institutions. This makes it difficult for them to receive funding and access other critical resources. However, there are companies like Verto that offer simple banking solutions specifically tailored for these types of businesses. Recently launched in beta, this product has received a lot of interest from startups and venture capitalists worried about the recent global financial crisis.
Safeguarded accounts are popular in the United Kingdom because they protect customers’ money should their bank fail. If a customer has £500,000 in a safeguard account, they are guaranteed to receive that amount even if their bank goes bankrupt.
Verto is a Fintech firm that offers E-Money accounts to customers in different countries, including the U.S. The company says it has protections in place should it go insolvent, such as designated safeguarding accounts with accredited banks in the U.K. This allows customers’ funds to remain protected if Verto fails. Meanwhile, interest-free safeguarding obligations do not attract fees like those found in traditional insured accounts
The popularity of safeguarded accounts among cryptocurrency startups is likely due to their security features. In addition to segregating relevant funds from other assets, the company takes steps such as daily reconciliation in order to ensure that there are never any shortfalls with safeguarding funds. This guarantees that startup investors and recipients of payments will always have access to their money, no matter what might happen should the company go bankrupt or hypothetically be robbed.
With over $30 million in monthly deposit requests, and partnerships with several of the largest fintechs in the world, Verto is undoubtedly one of the leading players in the space. However, its competitors such as Oduu believe that its primary purpose is to act as a payroll and payout service rather than storing cash. While this isn’t necessarily a bad thing – afterall, many users plans to use Verto for operational purposes – it may be tough competition for companies like Betterment and Acorns.
