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Paying international vendors and employees in multiple currencies is a significant challenge for most businesses and was made even more challenging during the 2020 pandemic. Thankfully, customers were able to turn to to help enable cross border payments, and in 2021, transaction volumes rose by over 800% as customers looked to optimize their payment processes. Join us for this episode on SAP »ÆÉ«¶ÌÊÓƵ Conversations as we sit down with Michael Cullen, Vice President of Sales at TransferMate, to discuss how the company became instrumental in the international payments space, providing businesses with the ability to make and receive payments anywhere in the world, in any currency, at any time ¨C with utmost security and cost efficiency.

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This four-episode podcast series celebrates TransferMate as one of the SAP »ÆÉ«¶ÌÊÓƵ Partner Award recipients.?Listen to each of these featured award winners on our podcast channel,?SAP »ÆÉ«¶ÌÊÓƵ Conversations, for best practices on managing your travel, spend, compliance programs, and more.?You can also listen to this episode on:??|??|??|??|? or?Google?your favorite place to find podcasts.

Jean Dion:

Hi, I'm Jean Dion. I'm the vice president of the value engagement team here at SAP »ÆÉ«¶ÌÊÓƵ. My team is responsible for working with our customers on solving business problems and getting to the root of where you want to go to meet your goals and objectives. Today, I have Michael Cullen from TransferMate with me. He is the Vice President of Sales with that group. And TransferMate just recently won one of our partner innovation awards. So, Michael, I'd love to go ahead and ask you to introduce yourself and introduce us to TransferMate.

Michael Cullen:

Yeah. So thanks for having me on Jean. I'm delighted to have the opportunity to speak with you today and even more delighted to be receiving the partner innovation award. As you said, I'm the senior VP of sales for TransferMate global payments. And at our core, what we do is we move funds from A to B using methods that allow us to have more control over both ends of the transaction. And we take that business model and implement that into technology solutions that finance departments use every day, such as »ÆÉ«¶ÌÊÓƵ Invoice or any other invoicing tools or ERP systems and systems such like that.

Jean Dion:

So I know that many of our customers are used to »ÆÉ«¶ÌÊÓƵ from a T&E expense perspective where we're paying out employees for T&E expensive, but this is really a B2B payment tool that's tied to AP function. So was wondering if you could give our audience a broader perspective into why cross border payments are so complex and somewhat highly manual at most companies. I know that it includes things like exchange rates and setting up accounts, and even just the sheer number of people it can take to create that payment. So could you elaborate a little bit more as to why this process should really be top of mind for our customers' finance executive teams?

Michael Cullen:

Yeah. And manual really is actually an understatement, but in terms of why cross border payments tend to be so complex, the reason is because the financial institutions that companies use to handle these transactions have those manual processes built upon manual processes. When these were designed, they didn't have the foresight into what a modern, global technology driven landscape would look like. So modern iterations of these processes were built upon poor foundations. You take the SWIFT network. For example, SWIFT was founded in 1973 and before SWIFT, we had Telex, which was first used in 1933. Most companies today are still messing around up manual files for upload to their bank.

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And the banks are still using outdated messaging systems. It takes a lot of people a lot of time, and it's costing companies a lot of money to do it that way. And this should be top of mind for finance leadership because they can drastically reduce down the amount of people that's required to format, submit, and finally reconcile international payments. And even more so, the lack of transparency on the true cost of foreign exchange rates. And the fees that are applied to these transactions is really staggering. So for anyone that says they can't afford to take the time to revisit these processes, I argue you can't afford not to.

Jean Dion:

I remember Telex. I'm that old that I remember Telex. So it's fascinating that we've got a system that moved into replaced Telex back in the good old days, and it's still here. And I think that kind of outlines, Michael, and you could correct me if I'm wrong, but it kind of outlines some of the gaps that showed up in payment processes during the most recent pandemic issues. And that whole idea of that movement back to work and people working for multiple places. I'm guessing this applies to some of our treasury counterparts, too, that they are involved in these payment processes.

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They're highly manual. You need to actually be in the same building, because you're running pieces of paper around or you're creating files and checking with other people. And because of that, what are some of the advantages that a company can gain by automating a process like this, by not really fully, depending entirely on some of those outdated pieces? Is it really... Is it time? Is it error reduction? Is it risk mitigation? Is it all of the above? Have I missed anything? Can you talk a little bit about those gains that companies are going to get?

Michael Cullen:

Yeah, it's exactly that. You captured it perfectly there. When you look to automate these processes, you can take what normally took 10 AP staff for a small to medium sized organization a full day to do and condense that down to two to four key people. And this allows you to redeploy that resource and time gained elsewhere in the organization to focus on scaling or even provide attention to the tasks you can't automate yet.

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I've spoken to a lot of SMEs mid-market and enterprise clients over the years, and what really shocked me was in most cases, the only difference in their processes was the amount of people that took to run their AP department. Going from an SME to an enterprise, there wasn't much difference in the sophistication of the software used or their processes, but instead of there being five people in the AP department, there might be 50. And if you can automate in the right way, the processes scale as you grow without the need of further investment into how many people it takes to look after these processes. And this really allows you to grow and scale in a way that wasn't previously available for organizations.

Jean Dion:

Yeah, that's fascinating. So the scalability of it is just by throwing people at it rather than throwing technology at it or using technology to get a gain. And that's concerning to me as somebody who worked in an AP team before and managed parts of it. When you think about it, the average AP team is about five to 10 years away from retiring. So these processes and tasks sit in their head and they're going to leave when our people leave. And we don't necessarily have a lot of people going to college to say, I want to be an AP clerk when I leave. So they're built on automation. They've had automation their entire life and they're somewhat expecting it. So I think that idea of bringing automation in it, isn't just even a job and a time and error reduction play. It's actually also a play around recruiting and retaining employees as you move forward.

Michael Cullen:

Exactly. And it's finding people whose idea of automation isn't optimizing an Excel sheet, optimizing a manual process. It's actually looking to get to the fundamental issue or the fundamental problem and apply a solution to that.

Jean Dion:

And I know that we've talked a little bit about this reduction in time, the reduction of resources, the scalability, but payments across borders also carry a certain amount of risk and certainly some strict regulatory control. So would you be able to elaborate a little bit on those areas of concern for a finance organization and maybe even identify some of the common traps or missteps organizations can find themselves in as they go through this process?

Michael Cullen:

Yeah, and that's so relevant today, especially in an environment where remote working has become so popular. Security and fraud prevention needs to be at the forefront of any discussion. A study by IBM reported that 95% of successful attacks were due to lapses in manual controls or relying on people to detect red flags. I mentioned earlier that some people find the lack of time in their day to take a look at these processes because they're too busy. That's a huge trap to fall into, especially if the very thing that's keeping you busy can be automated in a way that accounts for your organization's internal security controls. If you can automate a process to detect red flags, transfer in-house sensitive data, this is by far safer and more improved way than relying upon someone to manually look for these things or manually enter in information, especially sensitive information regarding transfer of money or bank details.

Jean Dion:

So we've been mostly talking or I've been mostly focusing in on the finance aspect of this, but when we think about this, we're adding other cross-functional teams, right? We're looking at other teams that might, to your point, security and fraud prevention. So what other kind of teams would we be involving in review of this process that we may not even be thinking of during the manual process?

Michael Cullen:

Yeah, again, it could be risk, it could be compliance. It could be IT. It could be security. It could be any number of those departments. And it's really about finding a solution that connects your invoice and your payment process in a way that allows and accounts for all of these different teams' objectives.

Jean Dion:

So if we're speaking about risk a little bit, one of the things that pops to the top of my mind, especially with all the things that are happening in the world today, I wanted to talk a little bit about that sanctioned country activity. So compliance for that is huge and more and more spend is being pushed into that employee initiated spend category. And just because a company shipped you something from France, doesn't mean it's not headquartered in a country with whom we should not be doing business with and to whom we cannot make a payment to. So if you could kind of talk a little bit about TransferMate's capabilities when it comes to risk mitigation for those kind of sanctioned countries, as it relates to payments.

Michael Cullen:

That's a great question. Along with our technology that checks and raises red flags on certain criteria, we do have a dedicated risk and compliance team that monitors transactions for this kind of activity. So we check all vendors and beneficiaries off the OFAC sanctions list and flag anything that looks suspicious. We then work with the clients to either clarify or gather more information or ultimately if we need to even halt the transaction completely in order to protect the client.

Jean Dion:

And one of the things that I was thinking about, for a lot of customers, this may not have been a priority before. Because of changes in supply chain and needing to add more vendors into the system fairly quickly, they haven't really had to deal with anything like this. So is there anything you can recommend to customers for whom this type of activity has not been a priority until recently?

Michael Cullen:

Yeah, absolutely. I'd recommend always taking a look at these processes and seeing is there a way first and foremost to automate, do it more efficiently, and then compliment that with, is there a way in order to do it safely? And the number one thing I think of when I look at a process in that way is trying to find a payment provider that has visibility into both sides of the transaction. We spoke about that at the beginning of this conversation and most payment providers are banks. They're perfectly fine for their domiciled market and they have visibility into the flows for payments on that side of the transaction. But there are providers out there that can have and offer visibility into the other side of the transaction, where you're actually sending funds into. And that makes those payments infinitely more safe because they can see both sides of the transaction.

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They understand the local regulatory requirements for both sides of the transaction. And then when you take a look at these processes [inaudible 00:11:28] and make sure that it's safe and find something to compliment your internal securities, the next thing you want to look at is are we doing it more efficiently? And you can do this by connecting the different departments. We talked about security, IT, compliance, risk, but even in a finance department, you do have some sections within that structure that sometimes don't speak to each other. You might have a tax department, you might have an invoice, you might have a payment side. And all of these departments are typically using different systems. And we live in a landscape now where you can find a solution that connects these different departments together in a way that's in a secure, safe environment. It's technology driven. So you're not reliant on passing documents around the office or hoping that somebody thinks to run that document by somebody's desk for a signature. It's in a platform that actually makes all that visible and provides some checkpoints for everybody to tow along with.

Jean Dion:

That's a really great point. We do tend to have multiple systems across multiple teams. Everybody uses what works best for them. And sometimes integration is very difficult. So this gives you that feeling of control and support. As you move across multiple platforms, you still have that check and balance when you're there. So that's really great. I think about that a lot, because I'm going to turn to something that I have that I think I still have PTSD from it. And that is from a past AP life. I know that payments aren't always linear. People don't always follow timelines. People don't always... We can say, oh, we only pay on a certain day of the week, or the check runs here.

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We only do wires until three o'clock in the afternoon. And your late submission, isn't going to be a fire drill for my payment team, but we know that is not the case. We're always jumping and hopping because we need to make these payments. It's what makes the business run. So I'm just kind of curious, can we talk a little bit about how TransferMate can handle some of those internal, I would call them non-compliant process situations that kind of come up when it comes to payments? Like, I need this today. I need this right now. I need this in a specific currency transaction as soon as possible. How do you guys handle that?

Michael Cullen:

Yeah. So I find it interesting that you phrase that as a process that might be non-compliant, because as you know, those kind of situations can actually be a regular occurrence. So to treat them as non-compliant within an organization can sometimes feel like you're going against the tide, but that's actually how a lot of companies treat these kind of things. We reimagine those workflows and allow users the flexibility to pay their vendors on demand using local payment rails in over 130 different currencies across more than 160 countries in a secure and compliant environment. So they can make those same day payments in our available currencies without the need of requesting these multicurrency capabilities to be switched on. And all of this is done in an environment that follows the digital approval process that would've been configured in your »ÆÉ«¶ÌÊÓƵ invoice setup. So our platform complements and leverages those uniquely designed security requirements and turns those non-compliant fire drills into something that's perfectly fine, safe, and compliant to do so. It takes your invoice approval process and pairs that with your payment approval process, rather than having those as two separate lines of work.

Jean Dion:

You mentioned something that just triggered in my head and that idea of following the appropriate approval workflow. There's a lot of control. And I think what people don't understand about finance teams, especially those that are doing payments, they are really compliance machines. They are making sure that everything gets done in the proper way. So they need to have a significant amount of control and ownership on how they manage that cash and how they make those payments. So would you be willing to talk a little bit about how much control a team does have over the process if they're using a service like TransferMate?

Michael Cullen:

Yeah. So when you're pushing your invoices through an invoice approval process, typically what you have is you would then go outside of that system and go into your bank and you'd have a separate approval process. We essentially take those two different approval processes and connect them together. Yes, there's an invoice platform and there's a payment platform, but ultimately what we're actually doing is connecting two different approval processes and stitching them together in a way that doesn't make [inaudible 00:16:20] staff have to double and triple check the payment or who they're paying. Because the last thing they want to do is pay someone in the wrong amount or even worse pay somebody they didn't intend to. And that's why they have these checkpoints in two systems. But when those systems speak together, you don't need to double and triple check everything because the system is doing that for you.

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So you can leverage that approval process on the invoice and that approval process almost serves as the data entry role in your AP staff. And then you can just have a payment approver come in and push out the payment. It gives them complete control over it because they don't have to double and triple check information that's not necessary to do so. So all they have to do is focus on is the task at hand and they can push out same day payments and pay in over 130 different currencies. So it gives them that flexibility and control, but it makes it safe and compliant to do so.

Jean Dion:

And I know that sometimes even though we've gone through and we've looked at what needs to be paid and it comes to the point of time to make the payment and we decide for whatever reason, maybe the shipment was delayed or maybe we've got some issues with the supplier because what we've purchased, isn't really up to par, it's gone through IQ, and it's just not meeting our specifications. If there's a change in what is going to be paid out to a supplier, is there some sort of process that's happening within the TransferMate tool or is that going right back to the beginning and going through a process of a workflow for approval to just make sure that everybody's aware the change has been made?

Michael Cullen:

Yeah. So that's a good question. So when something changes, it has to go back to the beginning, and the reason we do it that way is because we don't want anybody to be able to change the amount or redirect the payment to somewhere that wasn't intended to. So as soon as there's a change in that workflow that was previously approved, it will kick it back to those previous steps. And it's in an automated environment where you want it to, but it's still accounts for those security checkpoints you want in your organization. Some details changed that is different than what I approved on Monday. I'm going to want to take a look at that again. And that system will recognize that if that's what the organization wants and feed it back through that loop again. So it goes through those necessary checkpoints before it'll arrive at the destination of pushing out the payment. So it does account for those kind of things and it can be tailored to what an organization actually needs because every company is different.

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They have their own security and control points that they're going to want to see in these processes. Some of them are consistent across all organizations and we will see recurring ones that pop up and they're in the platform. But ultimately if there's pieces that an organization or a company wants in their workflow, that can be designed into that workflow as well for them.

Jean Dion:

Okay. So there is a lot of control here and a lot of process expansion. So this makes a lot of sense. If I'm working in an AP team, we've talked about the ability to scale without having it be manual, we don't need to throw more people at it. And in fact, we can take the people that are already doing some of these manual tasks and have them working on some more value related activities, something that brings real value to the program and maybe even be a little more strategic about how it works. We've talked a little bit about the security requirements and what's in place from a security perspective. We've talked about mitigating the risk and now we've talked about that control. So is there anything else that I might have missed or that you'd like to bring up that I haven't thought about in my infinite world of AP processing that I'm thinking about?

Michael Cullen:

No, I think we've covered it all, but I think just bringing everyone's kind of mind back onto the task at hand and why they might want to take a look at these processes. It goes back to what we spoke about about Excel files. Most people's interpretation of maximizing the opportunity when taking a look at these processes is how can we take our current process and make that more efficient and the best way to actually look at it is let's take away what we're currently doing, and let's start from the beginning, and what does the optimal solution look like? And that's really what automation looks like when you take a product like »ÆÉ«¶ÌÊÓƵ Invoice and pair it with PaymentsHub. It allows you to take away those processes and also the preconceived ideas around those processes and lets you start from the beginning and think what actually makes sense. And that's what I think is brilliant about technology providers coming together and designing a solution.

Jean Dion:

That is a really great point. It's that idea that automating a system doesn't necessarily mean that you're just using the same steps that you would use in a manual process into machine learning. You are actually taking a look at the entire process and reimagining how it can be more efficient and more effective to meet your corporate goals and objectives. So I love that. I love closing on that. That's really perfect. I want to thank you, Michael, for your time today. I really appreciate it. And I want to congratulate you again on the innovation award. This is really a wonderful tool and I think would be very beneficial to our customer bases. I'm Jean Dion. I'm here for SAP »ÆÉ«¶ÌÊÓƵ. If you have more questions about the »ÆÉ«¶ÌÊÓƵ Invoice tools or the TransferMate tool and service, please feel free to visit us at sap.com or transfermates.com. We'd love to hear from you. Also, if you're a current customer, please reach out to your account executive, but on behalf of the SAP »ÆÉ«¶ÌÊÓƵ podcast, please have a great day and thank you for listening.

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Listen to each of these featured award winners on our podcast channel,?SAP »ÆÉ«¶ÌÊÓƵ Conversations, for best practices on managing your travel, spend, compliance programs, and more.?