Welcome to a new era in international payments

Contributed by Suzi Dixon and Daniel Abrahams, 25 October, 2013

The past 12 months has seen very exciting innovation in the world of international payments. New startups are popping up left, right and centre, all trying to innovate in what was previously a largely opaque space. This is great news for expats, overseas property buyers and businesses who need to transfer money internationally. 

Daniel Abrahams, Co-Founder of foreign exchange comparison website MyCurrencyTransfer.com takes us through some of the exciting events we are seeing. 

Peer to peer foreign exchange  

The peer to peer concept is revolutionising the way we send money abroad, and forward thinking businesses are matching Customer A who has pounds but needs euros with Customer B who has euros but needs pounds. Think AirBNB for currency. 

We've put together the following guide to peer to peer foreign exchange: http://www.mycurrencytransfer.com/blog/2013/10/what-is-peer-to-peer-p2p-mon

Showing wholesale rates plus markup

It's often very hard when currencies are involved to know the true cost of a foreign exchange transaction. When you go to a market, there is a clear price for apples, bananas and pears. However, when you are offered a rate of: GBP EURO 1.15654, it's often very hard to calculate exactly how much this has cost you as an end consumer. Expats can now trade through a new wave of currency brokers who will let you know precisely the cost of your FX transaction by time stamping the deal notification with the 'wholesale rate, plus markup.' This is all part of a new wave in foreign exchange transparancy

Non-bank foreign exchange companies  

Using an FCA authorised and regulated currency broker often produces quotes up to 85% cheaper than the banks. In the past 10 years, these companies have hugely disrupted the industry by offering better-than-bank exchange rates and substantially reducing the cost of making an international payment. As a golden rule, always make sure your company segregates funds in client accounts & is appropriately regulated by the FCA and registered with HMRC as an authorised payment institution. 

Aggregators  

No longer do you need to settle for the first deal you stumble across. In the past year, there has been more exposure and use of specialist money transfer comparison sites that let you aggregate live international payment deals. The key is to shop around for a better deal, and if you are super frugal, open an account with more than one foreign exchange company. This way, you can compare quotes side by side. Ultimately, more bids equal a better saving. 

Transfers via Facebook & Mobile Money Transfers 

We all have Facebook & Twitter! Across the globe, currency startups are trying to build connectivity into social networks, allowing you to send money abroad via platforms that are built around Facebook. This is an exciting development & it is representative of an industry that is ripe for disruption. 

In our opinion, technology is going to change the way we think about transferring money abroad. Bring it on! 

About the author: Daniel Abrahams is the Co-Founder of MyCurrencyTransfer, an award-winning independent foreign exchange comparison website. 

Tags: business | currency | Expats | Money Transfers | Currency | trade |

 

 





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