Ruben Salazar, former Global Head of Visa Direct, has been appointed President of infrastructure-focused cross-border payments player TerraPay.
The move sees Salazar take up the role from today, and comes at a time when TerraPay is looking to expand beyond its core markets, having already established a strong business in areas including P2P payments infrastructure.
“I have great admiration for what the founders and management of TerraPay have been building over the last 10 years,” says Ruben Salazar, President of TerraPay, in an interview conducted shortly before he began the role.
“From the business architecture point of view, from the cultural match point of view, everything was incredibly attractive for me to join forces with them and continue to grow this business.”
Salazar joins as TerraPay is looking to scale its business beyond P2P payments, where it built a business partnering with key players including Western Union and MoneyGram. This will see it increasingly harnessing its network to cater to the wider cross-border payments industry, representing a significantly larger total addressable market (TAM). Market sizing data from my own company, FXC Intelligence, shows that while consumer-to-consumer cross-border payments are set to have a TAM of $3.3tn by 2030, the B2B cross-border payments market will reach a TAM of $56.1tn by the same date.
“That’s what we want to go after now, and we’ve been building our infrastructure out for that,” adds Ambar Sur, Founder and CEO of TerraPay.
“With Ruben’s expertise in this market, we can now address some of the larger players. Now is the time to really shift gears, go after other lines of business and establish use cases in all of them.”
Targeting scale through agnostic solutions
Over the past 10 years, TerraPay’s network has grown to cover 140 countries and 60 wallets, and covers acquiring, money transfers and pay-outs, as well as wallet enablement and virtual cards. It now serves over 7.5 billion bank accounts and more than 2 billion mobile wallets.
However, Salazar’s appointment comes as TerraPay is looking to step up the number of transactions it handles by an order of magnitude. “We’re in the millions, we want to get to the billions,” explains Ani Sane, Co-Founder and Chief Business Officer of TerraPay.
Here, Salazar has some experience. During his almost three-year stint as Global Head of Visa Direct, he saw the company pass 7 billion transactions and he sees an agnostic approach as key to reaching these numbers at TerraPay.
“The industry is at an inflection point, and consumers and our partners and clients are demanding better agnostic rails,” he explains.
Here, Sur says that the company wants to address “four or five verticals”, including areas such as travel and other B2B use cases. “Gig workers, entertainment, all of it are addressable at this point,” he says.
While such verticals do have different challenges, the company sees a universal need for “better money movement capabilities”, according to Salazar, who adds that the payments industry’s level of fragmentation creates opportunities to address this.
“There are fintechs focused on improving the user experience and user interface, and there are very interesting fintechs like TerraPay who are focused on infrastructure. That infrastructure is key to developing better agnostic networks over the next couple of years.”
TerraPay’s differentiators: Compliance and beyond
TerraPay says it has been profitable for the last two years, according to Sur, meaning the company is “not under pressure to have to deliver the next level of funding or growth”. However, reaching the scale it is looking to target will see the company face fresh challenges that come with managing larger flows.
“When you’re small, nobody notices you, but when you start sending 20, 30, 40% of their foreign remittances into the country, regulators will take notice,” he says, adding that TerraPay has “a few” countries where it is handling more than 10% of inbound remittances.
The company is already mindful of this, however, and is actively adding to its c. 30 licenses and regulatory approvals.
“We are actively speaking to multiple banking regulators for multiple banking licenses, be it in Asia, Africa, Latin America,” says Sane, arguing that compliance is a vital foundational part of the company’s cross-border offering, as well as easing access to liquidity.
“Cross-border money movement is actually a business of compliance,” he adds. “If you get the compliance piece right, everything will fall into place.”
Salazar agrees, saying the company needs to “not only protect the quality of the transaction, but continue to operate in the compliance environment we want”.
“That compliance needs to be valid for one million transactions or one billion transactions,” he says. “How we’re going to continue to be known for being a very robust compliance short, regardless of transaction numbers, that’s the challenge for us.”
Building on Ruben Salazar’s Visa Direct experience
Salazar takes on this challenge with significant experience bringing scale to Visa Direct, which he says grew 40% year-on-year under his lead. The company has also built close ties with TerraPay, with Visa becoming a strategic investor and partner with the company in May 2023.
Reflecting on his time at the company, he says that he is most proud of the fact that his team “made Visa Direct to operate at scale”, although reflects that reaching its current scale took time.
“It took some time for us to diversify the number of use cases that we were operating in; it took some time for us to create the proper conditions for the platform to grow,” he explains. “It took significant amounts of effort inside Visa to operate at scale.”
He joins TerraPay at a point where it has some way to go to match Visa Direct’s scale, although he does argue that the company is comparatively strong on wallets. “Wallets are an amazing infrastructure: only TerraPay offers 2.1 billion endpoints of connectivity,” he says.
By contrast, Visa Direct initially developed strength in card-based endpoints, adding account with the acquisition of Earthport, and has built its wallet connectivity out largely through partnerships with companies including TerraPay.
“That’s a multi-rail infrastructure,” he adds. “I think it took significant amounts of effort to make Visa Direct operate at that level of transactionality.”
A changing cross-border payments landscape
As TerraPay embarks on its next steps in scaling, it does so at a time when the cross-border payments industry is undergoing considerable transformation. “It’s early days for money movement in many ways,” says Salazar.
As a result, Salazar sees the next few years hosting a “dramatic inflection point” for the industry, and crucially how it will develop in the following decade. Newer markets are emerging with increased flows, including in Latin America and Africa, and this is shifting the dynamic in terms of dominant payment instruments.
“We believe accounts and wallets and other instruments will be critical,” says Salazar, pointing to their high levels of use in fast-growing markets, compared to traditional Western markets. “It’s easier for a business sitting in Europe and the US to deliver these funds into a digital wallet in places like India, Pakistan, or some other places.”
Related to this is the increasing global nature of small and medium-sized businesses (SMBs), which he argues become “de-facto multinationals” through their digital wallets connected to TerraPay’s network – creating a significant and growing opportunity for the company. “It allows them to compete in a digital economy that is far richer than the domestic environment.”