Behind the Idea: Flywire

January 21, 2021

Flywire is a Boston-headquartered high-growth vertical payments company that solves vertical-specific payment and receivables problems. It works with organisations delivering ‘high-value’ services in sectors such as education, healthcare or luxury travel. Flywire’s sector-specific insight and technology allows organisations to improve the payment experience and eliminate operational challenges. Recently valued at over $1bn, Flywire has processed more than $16bn in payments for over 2,000 businesses globally.

Over the last few months and with these sectors dramatically impacted by the pandemic, Flywire has been on the front line helping to make payments easier during this difficult time. Through a collaboration with Citi Commercial Bank, Flywire accelerated payment transactions for PPE, helping to expedite the shipping of important protective medical equipment to the US.

As CEO of Flywire, Mike Massaro‘s responsibilities include aligning the international team with the company’s strategic direction and increasing its visibility globally.

I assumed the role of CEO in 2014, focusing the business on vertical-specific payments and scaling it globally, with the company reaching unicorn status earlier this year. I bring more than fifteen years of experience in solution engineering, sales, and marketing and leverage technology to create solutions to gaps in existing consumer and business transactional experiences.

I’m proud to have been recognised for my contributions to industry in the PayTech Leadership Awards and the E&Y New England Entrepreneur of the Year Awards.

What has been Flywire’s response to financial technology innovations nationally?

Flywire has embraced the growth of fintech innovations. In fact, the continued growth of the fintech industry plays well to Flywire’s hand. Our offering relies on collaboration, collaboration with banks, payment providers and other fintechs. It is through these partnerships that we can offer our customers the payment method of their choice, regardless of where they’re based.

This reduces the geo-complexity of payments for our target markets. In the case of international students, it means they can use the preferred payment of their home nation instead of needing to navigate unfamiliar payments providers or thorny FX rates. Yet, this has only been possible through our network of global partners, and the advancement of fintech innovations.

Critically, we don’t just focus on 50% of the transaction like most firms. We also help the other 50%, the receiving party, to not just accept payments, but turn payments from a cost centre and to competitive advantage.

How has this changed over the past few years?

The payments market has become more complex, which has required Flywire to continue to grow its investment in emerging technologies.

In recent years, we’ve seen the payments market grow almost exponentially with the growth of eCommerce. This has been accelerated by the Covid-19 pandemic.

As the market for payments expands, so has the number of payment networks and methods. We’ve seen new ways to pay and get paid gain critical mass from mobile payments in China to Faster Payments in the UK.

As such, Flywire’s network continues to expand each year, ensuring we can support our vertical-specific clients whether its AliPay or Venmo.

In 2020 we announced strategic partnerships with the Brazilian Educational & Language Travel Association and Beijing Overseas Study Service Association to bolster its ability to work in LATAM and Chinese markets respectively. Flywire has also taken on an educational role, publishing detailed research on the regional specific demands of students in China, India, Indonesia, Nigeria and Vietnam. And with the travel sector hit hard by the Covid-19 crisis, Flywire has spent time looking at how the market can bounce back over the coming months and offering support to customers.

Is there anything that has created a culture of change inside the company?

Our Flymates (the name given to Flywire’s employees) are constantly looking to innovate and collaborate industry-wide. Personally, I host our Global Leaders Local Coffee podcast which acts as a platform to discuss some of the biggest industry topics with other fintech firms.

More broadly across the company, we encourage Flymates to follow their passions. This also extends to volunteer projects which Flywire then celebrates within the organisation. Employees are given time to dedicate to their chosen causes. This year many chose to dedicate this to the fight against racism as Black Lives Matter protests took off worldwide. This also led to the creation of initiatives like the Flywire Foundation which provides university scholarships to those from disadvantaged backgrounds.

What fintech ideas have been implemented?

Collaboration. Collaboration. Collaboration.

Flywire set out to make international payments work for payers and receivers. That was its #1 challenge, but also at the heart of our solution.

We’ve worked tirelessly to build a hands-on experience so that the transaction can be tracked in real-time, and to allow both parties to be able to quickly access expert help to ensure high value, critical payments get delivered.

To offer this experience, Flywire needed to bring together numerous and often disparate partners to create the network and then enable the solution that worked for receivers, as well as payers.

This was a challenge. Payments is a commoditised, scale business, and providers look for volume. At first, many saw Flywire as a competitor who would take market share and revenue and that made building a global network challenging.

Yet over time, Flywire was able to rapidly drive volume in key international markets. It has been able to deliver massive scale to partners, which in turn saw the floodgates open. We now count Alipay, Trustly, Paypal, JP. Morgan and Venmo as key partners. And our network extends across 220 countries and territories and 150 currencies.

This could only be achieved by collaborating with a range of partners, all with a shared vision: to help vertical-specific businesses deliver on the moments that matter.

What benefits have these brought?

We’ve not only been able to expand our network but make it more intelligent and integrated. We’re able to offer real-time tracking for payments that didn’t exist before. We’re able to provide complete transparency on fees and charges for payers. We’re able to automate reconciliations for receivers.

The business impact of all these efforts has been significant.

Do you see any other industry challenges on the horizon?

Naturally, the issues facing the travel sector is something that we’re keeping our eye on. Luxury travel is a key vertical for us and 2020 was one of the most difficult years the travel industry has ever seen. Due to the travel restrictions in place for much of the year, international travel has taken a significant hit, with airline passenger revenue estimated to plunge by $314 billion in total—or 55%—from 2019 levels, according to the International Air Transport Association.

However, with the arrival of a vaccine, things are starting to look hopeful.

There are likely to be some bumps in the road in 2021, but overall the sector is well placed to bounce back as consumers look forward to the return of international travel.

Can these challenges be aided by fintech?

Absolutely, the travel sector and fintech industry have a close relationship. From our perspective, payments technology is helping to make it much easier and affordable to pay for travel experiences.

And industry-wide, one of the reasons challenger banks have become so popular is due to their competitive FX rates and cards that can be used overseas. With that in mind, I expect fintech to play a big part in the global recovery of the travel sector.

Final thoughts

For Flywire, 2020 has been a year of ups and downs. Looking ahead to 2021, I am eager to see things return to a ‘new normal’. On one hand, that means people returning to travelling and students returning to campus and in-person schooling. On the other hand, I believe the continued growth of digital payments is important for economic growth and global prosperity, not to mention financial inclusion.

No matter how things unfold, we will continue to collaborate with partners to adapt our offering and ensure that high-value payments are delivered fast and friction-free so organisations can deliver on their customers most important moments.