Target Mart x Verto: Unlocking Commercial Growth through Optimised Cross-Border Payment Operations

Challenge

Initially operating as importers of beauty and FMCG products into Kenya, Target Mart swiftly evolved into exporters of these products to neighbouring African countries such as Uganda, Burundi and Tanzania. This business expansion added layers of complexity necessitating the need for an alternative cross border payment partner for pricing efficiency and operational effectiveness.

Target Mart faced a trifecta of cross-border payment challenges in their operations–exorbitant foreign exchange rates, hidden fees and a bureaucratic documentation process. 

‘The forex rate charged by local commercial banks was exorbitant’, says Derrick Lwatati, Commercial Director at Target Mart. ‘There were also a lot of hidden fees. The banks would give you a marked up rate, where their profits have been considered. You will also be charged other commission and fees associated with you remitting the funds out of the country to the beneficiary. We also struggled with the problem of documentation with the local banks.'

These challenges disrupted Target Mart’s operations with delayed payments resulting in late consignment delivery affecting their ability to fulfil customer orders promptly. As Derrick recounts, ‘I remember a time where we kept clients waiting for two weeks for us to receive cargo not because the goods were unavailable but because we couldn’t access dollars to pay our suppliers’. 

These challenges underscored the critical need for a financial partner capable of navigating the intricacies of cross-border transactions seamlessly.

How we helped

What excited Derrick about Verto was the idea that he could perform foreign transactions from the comfort of his office. ‘One of the biggest challenges I had was anytime I needed to do a foreign exchange transaction, I’ll have to find time to go to the bank and this could take at least an hour of my time’. Derrick says.

Derrick highlights revenue generation as one of the benefits for TargetMart. He says, ‘We are beginning to realise a bit of revenue because we’re managing costs and saving on fees and commissions that would otherwise have been charged by the banks.’ 

The ability to book transactions effortlessly and access foreign currency promptly provided a substantial advantage over traditional banking methods. 

‘One of the greatest advantages for Target Mart that has been made possible by Verto is the peace of mind that I can book a transaction at 7pm the night before and wake up the next morning and everything has been sorted. Before, I’d have had to call the bank two days in advance for them to start sourcing dollars for me.’ Derrick says. ‘Sometimes I’ll call them and request for $30,000 or $40,000 to be sent and the bank would refuse saying they can only give me $15,000 a day because of the government directive on foreign currency. I’ve never had that kind of challenge with Verto. The funds are always available and the process is seamless’. 

Outcome

Foreign exchange and access to liquidity is a fundamental aspect of the supply chain/distribution business. Manufacturers, suppliers and transporters in the global marketplace want to be paid in foreign currency. African businesses who want to operate in the global market must find a way to access foreign currency at the best prices in a way that is efficient and easily movable between the countries they do business with.

Verto enables fast global payments at a low cost to up to 49 currencies across 200 destinations. Target Mart utilises this capability to manage its cross-border payment processes faster and more efficiently. Verto's consistent and readily available funds mitigated the challenges Target Mart faced with traditional banks, where limitations on amounts and government directives on foreign currency often disrupted transactions. With Verto, Target Mart can send payments for goods between Kenya and countries like China in less time and at a cheaper rate than it would have cost with local banks. 

Exorbitant foreign exchange rate and hidden fees that once obscured Target Mart’s transactions have been replaced by a streamlined, transparent and cost-effective solution. Verto's seamless transaction process, accessible from the convenience of Target Mart's office, not only saves time but also eliminates the bureaucratic documentation hurdles that often accompanied dealings with traditional banks.