Cross-border payments infrastructure platform Layer2 Financial raised $10.7 million in a Series A round.
The new funding will allow Layer2 to enhance its infrastructure, which uses fiat and digital currencies to securely move billions of dollars per year, according to a Wednesday (July 31) press release.
Layer2 has seen a 20% or more increase month over month in transaction processing volumes “as more businesses seek efficient, transparent and compliant ways to issue payments across jurisdictions,” the release said.
The funding will let the company invest in product development, market expansion, tech infrastructure and talent acquisition, per the release.
The Layer2 platform is “positioned to disrupt the traditional payments ecosystem, making international money movement faster, more transparent and cost-effective,” Mike Giampapa, general partner at Galaxy Ventures, which led the funding round, said in the release.
The value of cross-border payments is projected to climb to more than $250 trillion over the next three years.
However, despite the size of the total addressable market, cross-border payments are still generally more expensive, opaque and slower than domestic payments — whether we’re talking about business-to-consumer (B2C) or business-to-business (B2B) transactions.
“That’s why the time has never been better for advances that can help make cross-border payments faster, cheaper, more accessible and more transparent — as well as help drive interoperability across the far-flung central banks, payment system operators, providers and participants that make up the global cross-border payments ecosystem,” PYMNTS reported in April.
While cross-border payments have rebounded alongside global trade, businesses looking to enter foreign markets quickly find that traditional cross-border payment methods, such as wire transfers, are full of delays and complexities.
Faulty cross-border payments cost U.S. merchants at least $3.8 billion in sales just last year, according to the PYMNTS Intelligence report “Cross-Border Sales and the Challenge of Failed Payments,” which also showed that 70% of U.S. firms saw higher rates of failed payments in cross-border sales compared to domestic transactions.
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