Silicon Valley-based Filipino entrepreneur pushes alternative to Swift system

Small- and medium-sized enterprises can now make and receive payments to and from business partners overseas through a system that is cheaper and more secure than existing bank-to-bank international transfers.

More importantly, the system being offered by US-based—and Filipino-controlled—Align Commerce can deliver real-time payments that will be credited immediately to any payee’s account in 66 countries by sidestepping conventional services like the Swift payment structure.

“We’re here to take out that function from you,” said Silicon Valley-based Filipino entrepreneur Aldo Carrascoso who is also Align Commerce’s COO. “Businesses, to make payments, need to hoard dollars. And sometimes when you hoard dollars, you lose money because your business is not hedging or treasury.”
Instead, his firm offers what he calls “just-in-time payments.”
“If you need to pay a supplier in China, I can do anything from zero to a million dollars right now. And you don’t need to hoard dollars,” Carrascoso said.

Launched in early 2014, Align Commerce is seen as one of the hottest financial tech startups, after it was announced late last year that the company received a $12-million funding lead from Kleiner Perkins Caufield Byers (KPCB), Silicon Valley Bank and Recruit Strategic Partners.

Align’s reliable and real-time system of sending and receiving payments via email is designed to replace the complex and costly telegraphic transfers, wire systems and Swift, by bypassing banks or middlemen. It uses a combination of proprietary multirail payment systems and blockchain technology, described as one of the fastest-growing areas for tech investment.

According to the company, the largest difference between itself and traditional financial institutions is that Align Commerce use more efficient “payment rails” or “plumbing” than a bank.

“When a bank sends money overseas, they are unable to send it directly to the receiving bank. Your money is actually passed through many cooperating ‘intermediary banks’ until it reaches the destination bank. And every time an intermediary bank touches your funds, they take a small fee for themselves. In the end, each movement through each intermediary bank costs you time and money,” the company said.

“Align Commerce avoids intermediary bank networks,” it added. “We transport your payments through cutting-edge blockchain technology. And because we only touch your payments once we only need to charge you once. Less touches means less fees and faster payments.”

Carrascoso said the initial Align Commerce was built by himself and a number of Filipino software engineers.
“They happen to be some of the first ever blockchain payment engineers in the world,” he said. “The Philippines has a tremendous amount of raw talent that are untapped. Even though we are based in San Francisco, I knew the dynamics of how to manage a team in the Philippines, which is why we started core development there early, aside from the cost benefits.”