CurrencyTransfer.com aims to make business foreign exchange as simple and easy as searching for a plane ticket online.
The company has built a marketplace that matches businesses with multiple foreign exchange quotes and offers instant trade execution ability. Think Expedia for business payments.
TechRadar Pro talks to CurrencyTransfer.com co-founders Daniel Abrahams and Stevan Litobac to find out more.
TechRadar Pro: Why did you set up your business – what problem were you trying to solve?
Daniel Abrahams: Over the past three years, my co-founder Stevan and I have witnessed the way our $21 trillion per annum cross-border payment industry is broken. As expats living in Australia and Europe and further yet as business owners, we've felt the pain of making cross-border payments firsthand.
Whether you need to import goods, pay overseas offices or trade internationally for whatever reason, we think it's a scandal that most customers don't truly know the cost of a simple currency conversion.
As for our background, we actually met in a funny way. We both wanted to start an online business and met online. No kidding! It was on a 'Find your Co-Founder' style website, matching tech and commercial talent.
TRP: Why isn't the current system working?
DA: Sadly, most businesses are losing out with their existing suppliers. Banks, who have nearly a 90% market share, apply hidden of up to 4% on the amount you are transferring. If you're smart, you may ring up a couple of currency brokers for quotes.
However, this takes a LONG time and provides inefficient rate comparison, given the markets are moving each second. Not to mention, you're also at the mercy of currency salesman who may offer you a great rate on day one, only to widen and widen the spreads offered over time. In our industry, we call this ''honeymoon rates''.
Too often, implicit fees built into the rate and explicit transaction charges bundled together strike panic, confusion and inefficiency.
Stevan Litobac: Our goal with CurrencyTransfer is to focus on three core areas to solve this issue. We aim to give control to the SME, improve transparency when understanding the costs of international payments, and create a competitive marketplace where businesses don't have to jump through hoops to get the best rate, when they need it.
TRP: Who are your target customers?
DA: On the CurrencyTransfer marketplace, we're targeting SMEs and large corporates who make cross-border international payments. Over the past few months, we've spoken daily to finance directors and owners building fantastic businesses in a range of industries, including manufacturing, clothing, shipping, removals and professional services.
One customer I spoke to the other day told me upfront, ''I know I'm getting screwed by the bank, but I have no choice!'' Educating and empowering our target customers will be key.
We want to let SMEs worldwide know that they absolutely DO have a choice over who their firm makes a currency payment with and place the power in their hands. Via our own 'Expedia for Business Payments,' we truly want to be at the forefront of a very powerful paradigm shift of control back in the customer's hands.
TRP: What has been your biggest success to date?
Over the past three years, the reputation, trust and relationships built with regulated currency brokers globally have given us the confidence to build our latest and very disruptive business foreign exchange marketplace and booking platform, CurrencyTransfer.com.
We've also taken great joy in opening our first international office in the heart of Tel Aviv, Israel. The 'Start-up Nation' boasts more start-ups per capita than anywhere in the world.
Over the past few months, my co-founder Stevan has worked closely with our Israeli-based development team to launch our first version for CurrencyTransfer. The talent in Israel is staggering and I'm not surprised in the slightest it boasts so many tech achievements.
TRP: What have been the key milestones in financing your company?
DA: The business has been totally self funded over the past three years, which has worked superbly well for us, thankfully. We were profitable from the third month of being in business, back in December 2010. Since then transaction volume has grown year on year and since last year has allowed us to scale our team across two offices internationally, namely London and Tel Aviv.
SL: Yes, and with CurrencyTransfer, our B2B offering, we understand that there is only so much that you can achieve with your own resources. So we will be engaging in discussions with relevant VCs who we believe are a good fit and could help us along on this journey in securing every business a fairer and cheaper deal on currency.
TRP: Where do you see your company in five years' time?
DA: We'd love to be known as the trusted friend of SMEs and large corporates internationally. As an independent marketplace streaming live rates from multiple currency suppliers, we're truly on the side of the customer. On a product level, we want to continually build new features beyond just rate comparison, making CurrencyTransfer.com your de facto dashboard for your FX.
The benefits of being a marketplace will let us grow internationally quickly. We've identified the US, Australia, Canada and Germany as core targets over the next 24 months. The US will be a little tricky, as currency brokers need to be licensed on a state by state basis. Looking further afield, there's an enormous opportunity for us in Latin America and Asia.
SL: There's a lot of room for integration and collaboration in the FinTech products space, and the start-up space in general. We think interoperability will be a key for future new products and their ability to play nicely with the tools people are already used to. So we're working hard at keeping ourselves aligned to opportunities in this area.
TRP: Where would you like to see your industry in five years' time?
DA: Great question, and for me, it totally centres around price transparency. If you go to a market, there is a clear and explicit price for apples, pears and a bunch of grapes. You know what it's costing your bottom line.
Unfortunately, international payments are one of the last areas of financial services where customers really don't know what a transaction is costing them. I truly believe it's important that customers see the ''real rate'' and the ''sell rate'' side by side, a core feature of the CurrencyTransfer.com marketplace.
Linked to this point, I'd love to see a total ban of those gimmicky marketing slogans, boasting how ''we offer 0% commission.'' The team at CurrencyTransfer ran a survey a while back and shockingly found that over 68% of respondents felt 0% commission actually meant free currency exchange!
Many businesses believe that this offer actually means free money transfers, but there are in fact a number of hidden fees and mark-ups. The industry needs to move from one of total opaqueness to full price transparency. In 2014, individuals and businesses deserve to know the true cost of simple currency transfers.