Is this the UK's next FinTech unicorn? Hank Uberoi of London-based tech startup Earthport slams outdated global payment infrastructure

Clara Guibourg
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Hank Uberoi: "Today’s payment process by banks is fundamentally broken and has been for 20 years" (Source: Earthport)

Could this be the UK’s next FinTech unicorn?

After previous success stories like Monitise and TransferWise leading the way, a UK-based payment platform slamming today’s global payment infrastructure for being “decades” out of date is hoping to disrupt the way companies pay their bills.

Hundreds of thousands of international payments are made every day. But today, a company wanting to send money overseas must allow it to pass through the hands of dozens of banks before it reaches its destination. Earthport, a cloud-based payment platform, says the model is broken. The company want to change this by replacing today’s many-to-many relationship with a simpler hub-and-spokes model where they handle every cross-border step of a transaction.

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“Today’s payment process by banks is fundamentally broken and has been for 20 years,” Earthport’s chief executive Hank Uberoi told City A.M..

Frankly, he ought to know. Before joining the FinTech company, he headed up Goldman Sachs technology department.

The cumbersome process involved in making cross-border payments has become increasingly criticised in recent years, with major global banks, including HSBC and Bank of America, agreeing that international business-to-business payments have become overloaded. A system which worked fine when most payments were domestic has become expensive and ineffective today, when global trade is such a dominant part of payments.

London’s FinTech scene is currently enjoying the world’s fastest investment growth. The capital’s tech sector has created 30,000 jobs in five years, and recently received record funding - largely due to FinTech success stories like money transfer business TransferWise.

17 of Europe’s 40 “unicorns” - startups with valuations of $1bn or more - are in the UK. Eight of these are FinTech companies, making it the biggest sector by far.

Read more: Why London is home to Europe's hottest FinTech startups

Uberoi chalks London's success up to a “critical mass” of technical and financial talent, but also investors becoming bolder:

UK investors are still not nearly as forward-thinking as those in Silicon Valley, but they’re catching up fast.

Although a booming FinTech sector has brought financial innovations to consumer payments, mobile wallets and cryptocurrencies, business-to-business payments have so far been left behind.

“This is a solution that exists within existing regulatory frameworks and technology,” said Hank Uberoi, touting it as a way of “future-proofing” the industry for new technological developments.

The hub-and-spokes model he’s championing isn’t exactly rocket science, nor is it technically new. It already exists on a domestic scale, but Earthport want to take it to the global scale, and have already attracted major clients like Santander, HSBC and Bank of America.

If results are anything to go by, the company is doing something right, as recent quarterly earnings saw revenue ticking up 78 per cent - and transactions forecast to hit $10bn by the end of 2015.

It’s early days yet, but Uberoi is aiming high to say the least.

“Business-to-business transactions are worth $20 trillion. If we can crack even a portion of the potential market we could be very, very large,” he said.

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