Anyone who has traveled by subway in New York City is well aware that the system is in desperate need of a major update. In fact, some subway trains are still running on rails and switching systems that were built before World War II. Under these conditions, it’s a wonder that the trains still travel at all!
So, it was welcome news when, in 2018, the city’s Metropolitan Transportation Authority proposed a plan to modernize the subway system. The multibillion-dollar, multi-year plan will completely overhaul that system to take New York into the modern era of transportation. With a Lexington Avenue line stop right outside our Wall Street headquarters, we couldn’t help but notice the parallels between the subway line and the global banking system (ironically, the banking system is sometimes called the “payments rails.”)
For many years now, it’s been apparent that the old system of sending funds around the world doesn’t exactly accommodate the speed and efficiency demanded by modern payouts. In an effort to accommodate those demands, banks and nonbanks alike have undertaken projects to retrofit carbon paper-era systems to meet the demands of the new digital economy. These efforts are still very much a work in process, and their success is far from certain. Adding to the problems in retrofitting these old networks is the fact that each year, due to risk, an increasing number of correspondent banks pull out of correspondent banking networks. In fact, between 2013 and 2016, the number of correspondent banking relationships declined 38 percent. It’s as if New York was trying to patch up an old subway system, when stops were permanently closing every week. Has your 68th Street stop on the Lexington Avenue line been shut down? Looks like you’ll have to get off at 72nd Street and walk an extra four blocks to reach your destination. If you commute into the city every day, you understand how inconvenient that walk will be in the brisk of winter and smoldering peak of summer.
Against this backdrop, Transpay has been forging its own rails for sending funds around the globe, seeking ways to get money into bank accounts with fewer inconveniences or even “hops” (a colloquialism for the correspondent banking handoffs along the way). The network now includes tens of thousands of banks, reaches over 90% of bank accounts worldwide and is growing daily. Transpay’s Local Bank Transfers travel with ease on these new and improved rails, which are specifically designed for handling global mass payouts, the hallmark of the new digital economy.
Interested in learning more about the digital economy’s dynamic growth and the significant role that a payouts channel can play in a global expansion plan? Check out our new installment in The Ultimate Guide to Cross-Border Bank Deposits series to raise your payments expertise to the next level.