Embed Acquisition Gives OpenFX EEA and UK Cross-Border FX License

We recently announced a milestone, hitting $60 billion in annualized TPV, today we are excited to announce another – our agreement to acquire Embed, a UK and EEA licensed payments infrastructure company.

Licensing is often considered the least interesting part of cross-border FX, but when you have ambitions like ours, it’s one of the most critical pieces of the puzzle.

Over the last two years we've secured 11 U.S. state MTLs, a federal FinCEN MSB registration, and a FINTRAC registration in Canada.

Through this acquisition we have obtained a DNB-regulated Payment Institution license in the Netherlands, passported across the European Economic Area, and a FCA-registered Electronic Money Institution license in the United Kingdom.

These licenses bring us one step closer to our goal of becoming the foundational infrastructure for the next generation of cross-border payments services.

The Limitations of First-Party Settlement

OpenFX offers first-party settlement across many of our corridors today, and we're good at it.

There are excellent reasons to operate this way: the licensing burden is lighter, you maintain direct control over your exposure, and you can open new corridors without waiting two years for an application to process. A lot of successful, profitable companies in cross-border FX operate with first-party settlement as their permanent model, and they're not wrong to do so.

But this has never been our goal.

We don’t want to only be a FX trading operation, we want to be the infrastructure that other payments companies build on. When a fintech wants to offer global cross-border payouts, they should turn to OpenFX.

What These New Licenses Enable

Let's say a fintech in Germany has built a payments product that pays out to small businesses in Latin America on behalf of European buyers.

Before these licenses, we couldn't serve this company’s payment flow end-to-end. They could trade FX with us (aka first party or treasury flows), but they couldn’t fund us in euros and have us execute payouts on their or their customers’ behalf to Latin American suppliers.

The DNB Payment Institution license authorizes us to receive funds on behalf of a third party, hold them under safeguarding requirements, and execute payments.

Because the license is issued in the Netherlands under PSD2, it “passports” across the entire European Economic Area. The German fintech doesn't need us to hold a separate license in Germany, our Dutch authorization covers the relationship. The same would be true for a company in France, Spain, Italy, or any of the other 27 EEA member states.

Modern Infrastructure for Cross-Border FX

The cross-border payment industry is full of firms that move money through a network of correspondent banks, or piggyback off of an aggregator and never worry about the complexity of getting licensed for third-party payment flows.

There is nothing wrong with this, but the opportunity that we see is bigger.

Licensing is slow and expensive. It requires dedicated compliance teams and the patience to endure often draconian regulatory hurdles.

That's exactly the point. The difficulty of building a multi-jurisdictional licensing stack is what makes it defensible. Most companies in this space will never do it. They don't need to, because first-party settlement and partner licensing serve their ambitions just fine.

We want to do more than just move money. We want to be the platform that offers any payment company on the planet to access world-class liquidity with reliable and fast settlements, and to move money as freely as data.

These licenses are our latest step towards that goal, but they won’t be our last.