A year of innovation in international money transfers
The past year has seen a wealth of innovation in the international money transfer space. Forward thinking currency businesses are using technology in a very impressive way to democratize a tired and opaque space, largely dominated by high street banks who tend to offer high margins and a poor customer experience.
Daniel Abrahams, Co-Founder of award winning comparison website MyCurrencyTransfer takes us through an eventful year in the international payment space.
Peer to peer foreign exchange
Investment backed Transferwise and CurrencyFair are two examples of how p2p (peer to peer) is helping to shape a more transparent & democratized international payment market. The concept is simple, yet incredibly powerful. Customer A who has pounds but needs dollars is matched on the tech platform with Customer B who has dollars but needs pounds. Think ‘‘online dating agency’’ for international money transfers. Where customers can’t be matched up immediately, there is no delay as you simply match with the foreign exchange company.
Technology orientated firms are helping to rebuild transparency in the currency exchange market. The Currency Cloud have emerged as a powerful player, enabling financial service and e-commerce firms build an international payment business. The firm champions transparency and introduces a concept I have been backing for a while: displaying both the customer rate & mid-market exchange rate on deal notifications. The FX automation platform built by a leading team of engineers and developers are helping to reduce the cost of cross-border transfers.
Non-bank foreign exchange companies
For those making large value transfers, non-bank foreign exchange companies continue to offer better-than-bank exchange rates and a ‘private banking’ style service accessible to the everyday man and SME. Some of the world’s largest currency brokers like Moneycorp and World First continue to build a vast array of innovative currency contracts & options to mitigate against the risk of adverse currency fluctuations. Recently, World First announced they executed the world’s fastest foreign exchange payment, transferring GBP to EUR in little under 7 minutes. Impressive.
In the past year, aggregator sites have played a key role in helping customers access a fairer, cheaper & more transparent currency deal. Customers who have previous comfort in comparing mainstream products like car insurance, are now using websites to compare money transfer offers. Our independent research has showed over 30% of UK SME’s have direct accounts with more than one non-bank foreign exchange specialist. Individuals and businesses are shopping around and forward thinking aggregators will continue to play a key role in creating a powerful & dynamic venue for currency comparison. Almost unanimously, foreign exchange companies are now embracing aggregators as a strong channel for new customer acquisition.
Social money transfers
It was only a matter of time before currency specialists tapped into some of the world’s leading social networks. Azimo have impressively been busy building Facebook integration into their international money transfer service. At the turn of the year, the company was reported to have raised an angel round of £300,000. The company claims their use of Facebook is the first attempt at trying to do so in the remittance space.
About the author: Daniel Abrahams is the Co-Founder of MyCurrencyTransfer, an award winning independent foreign exchange comparison website.
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