Establishing and growing your Fintech startup from a small office in your local city to a viable international company is far from easy. From cultural differences to foreign legislation, doing business cross-borders comes with many complications and implications. So, if you’re going to take the leap, you need to be prepared.
YapStone, a leading payments company processing over $17B annually, can teach us a thing or two about setting up and thriving on foreign shores. With 124 full time employees now in the company’s international headquarters in Drogheda, Ireland, this California-based Fintech company has learned first-hand the challenges and complexities that can arise.
Based on their experience setting up an international office in the Emerald Isle, here are a few insights to keep in mind if you’re thinking of expanding your company across borders:
Speak the language
When it comes to offering your services in new countries, speaking the local language is fundamental. If you want to do business with customers in Spain or Germany, you’ll need to be able to answer their questions and offer support in their native tongue. YapStone’s Drogheda office has built up a global customer service team that can assist customers in eight languages. Having this ability is necessary for growth as the company expands into further foreign markets.
Expect the unexpected
When it comes to culture, consumer behavior and employee expectations, what works on home soil won’t necessarily fly in a country with different expectations.
Take culture, for instance. If you’ve ever shared a joke with a non-American English speaker (especially one with an Irish accent), you probably came away wondering if you were really speaking the same language. Even if there isn’t technically a language barrier, there are cultural differences that are deeply rooted within a country’s psyche that can complicate interactions.
Tom Villante, CEO and Co-Founder of YapStone, stresses how important it is to “respect the local culture and ways of doing things” and get to know the day-to-day idiosyncrasies. The Irish, for instance, are more relaxed as it relates to schedules and meeting times and not as formal as their American counterparts. Many business deals are forged in a social setting, rather than a board room.
It is also essential to understand consumer demands, buying behavior, and lifestyle preferences when setting up shop aboard. Villante observes, “As a payments company, we have learned that some countries are more resistant to using credit cards than the U.S., for example. So, we have to address these differences and offer more options and payment methods.”
And finally, when it comes to your employees, laws on vacation allowance and minimal salaries vary from those of the States so learn what they are and be sure to comply. In Ireland, for example, full time employees are entitled to a minimum of four weeks paid leave per year.
Tap local associations and government agencies for support
If U.S. Fintech companies want to succeed abroad, they should make connections and build relationships with local government, as well as business and regulatory institutions. In Ireland, that includes
These types of entities exist to offer help and support to businesses as they get started in new territories.
Government agencies can also be an asset to newcomers. Thanks to recent legislation for financial services companies, Ireland has become a hotbed for Fintech and offers considerable incentives to do business here. For example, startups in their first three years which are making under €480k per year receive tax relief and an extremely low corporate taxation rate at 12.5 percent. IDA Ireland, the Government agency responsible for attracting foreign direct investment (FDI), also offers new Fintech businesses considerable guidance and support.
Navigate the regulations and risks
Get assistance to navigate European regulations to avoid costly mistakes. The acronyms alone, like AML, PSD, FATF, need more than basic research. You need to act on them. Then there are critical risks to be aware of and prepare for, such as Terrorist Financing and Compliance, and Operational Risk. Knowing how to address foreign regulations starts by forging solid relationships with the right people and institutions who understand the differences in each country.
To replicate their U.S. success in Europe, YapStone worked with EU partners to deepen their knowledge of the regulatory issues each country faced and then created a customized solution for each. Villante explains, “Being aware of and addressing the regulatory landscape in each country you want to do business in is essential, as is working with experts who can help you find your footing on foreign soil.” As Amazon and McDonald’s can attest, failure to comply with such laws can lead to hefty financial penalties.
Entrust local leaders
Understanding the culture of customers and employees is vital, so it’s important to hire leaders who know how to organically build local culture into your company. Sometimes you need to trust the judgment to your local team and rescind control. Remember, they have the local advantage and know better how to operate within their own country.
Before opening the doors to their new office in Drogheda, YapStone brought aboard seasoned FinTech veteran, Peter Rowan, as VP of International Operations and Global Customer Support. A former Global Director of Trust & Safety at Twitter with experience in fraud operations at PayPal, Rowan’s immense experience and international expertise have helped YapStone’s Ireland office more than double in number of employees – a growth greatly attributable to Rowan’s local knowledge and close relationship with the IDA in Ireland.
Taking your company abroad requires careful consideration of cultural and regulatory differences and getting help from local organizations and leaders. But if you have a clear sense of what to expect, the right support systems in place, and the courage to make the leap, then your company’s potential for international growth may be boundless.