Posted on 27 June 2016 by Brion Bonkowski

The Birth of Tern, Realizing the Cross-Border Opportunity

The Tern team comes from the international payment processing and technology space, consulting for some of the largest retail brands helping with their global expansion. Through years of enabling US retailers access to consumers outside of the US by offering local payment methods, the founders came across a rapidly growing segment of savvy shoppers using freight forwarders. By interviewing the top freight forwarders in the US, we realized these companies were responsible for a significant portion of cross-border eCommerce because international consumers want access to US goods and US prices. What was lacking was a payment instrument that would be accepted at US eCommerce retailers as locally issued cards are typically declined due to fraud. The top freight forwarders ship millions of packages each month, and they felt with a payment instrument guaranteed to work at US retailers, they could dramatically increase their package flow by a magnitude of 10 to 20 Xs.

Our team decided to make the investment in time and legal to thoroughly investigate the opportunity with regard to US regulatory environment, cross-border money movement, anti-money laundering (AML) regulation, and how to satisfy strict KYC (Know Your Customer) requirements. After years of research, we developed a program that satisfies all of the various regulatory body requirements to issue a US purchase instrument to non-US citizens. Next came marketing and distribution. We decided the best way to reach the largest market in the shortest amount of time was to rely on local regional partners for distribution rather. By targeting the local telecom carriers, kiosk and bill-pay solutions, and wallets, we set out to launch this unique product across the globe. The next order of business was to find an issuing bank and a card network to partner with to launch our card program.

After reviewing our program with multiple banks, processors, and networks, our team was introduced who at the time was our biggest competitor, US Unlocked;  and their incredibly impressive expat CEO, Linda Hemerik. After multiple follow-up meetings and joint strategy sessions, we decided to acquire US Unlocked and bring Linda on as our COO. Tern now operates the US Unlocked program as it’s consumer-facing virtual card program and has developed a modern API-driven platform to enable our growing list of global partners to white label our solutions locally.


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