Getting tech companies that are also financial services companies into new markets isn’t easy.
The two sectors are among the most regulated by trade and domestic laws, but the mobile payments company Square faces the same imperative every US company does: It needs to tap into the huge portion of the world’s growth that is happening outside American borders.
That’s why Square scooped up the acting US trade representative, Demetrios Marantis, making him its top executive managing international government relations. The San Franciso-based company, started by Twitter creator Jack Dorsey, has built a distributed payments network that allows anyone to turn a smartphone into a credit-card processor or digital wallet.
“Trying to get banking and financial services regulations to embrace a new product, a new way of doing business, is always tricky in any environment, [but] particularly post-financial crisis,” said Hal Shapiro, a trade lawyer at Akin Gump who has known Marantis since he was a young lawyer. “There are certain areas that have been deregulated for many years, and you don’t need nearly as much brainpower and bandwidth as Demetrios Marantis.”
Marantis, a Harvard-educated attorney and the Obama administration’s deputy trade representative since 2009, was considered a potential replacement for outgoing trade representative Ron Kirk. But international finance veteran (and Obama law school classmate) Michael Froman was nominated for the top job, which is expected to take on new importance as the US ramps up efforts to conclude new trade pacts in Asia and Europe.
While Marantis was wooed to stay on, colleagues say he could have wound up at any number of top law firms or blue chip corporates. When Square announced Marantis’ hiring less than a week after Froman’s nomination, it was a bit of a surprise.
Square’s first international expansion, into Canada, has been fruitful, rewarding the company with 90% higher per capita payments volume than it reached at the same stage in its US business.
An experienced trade lawyer, Marantis worked in Brussels, Hanoi, and for the top trade policymaker in the Senate, Finance Committee chairman Max Baucus. As a US trade negotiator, Marantis helped concluded the US-South Korea free trade agreement that went into effect last year, and helped promote the opening of Myanmar.
Marantis’ experience in emerging markets could be especially key for Square: A mobile payments company will thrive where mobile is growing fast—places like South Asia and Africa. Square’s got the proven technology and the business plan. Now it just needs some help getting in the door, and that’s what Marantis’ primary job is likely to be.