CurrencyFair targeting €1 million in savings by June 2011
CurrencyFair, the world’s first person to person currency exchange marketplace, has reported saving its customers nearly €230,000 in bank and transfer fees since it launched six months ago and aims to reach €1 million by June next year. CurrencyFair was able to do this because it cuts out the banks and other intermediaries from currency exchange and place the consumer in control of the transaction, handing them the power to accept a rate on offer from other CurrencyFair customers or set their own. This way customers are getting access to rates that are normally only available to money market professionals.
Brett Meyers, CurrencyFair's MD, said “Currency exchange is easy money for the banks and CurrencyFair was set up to put the banks’ profits in this lucrative sector back in the pockets of the customer”.
Recent events surrounding the collapse of Crown Currency Exchange mean it’s not just the rates that are important. However, CurrencyFair customers can be assured that their cash is safe as well.
Meyers, said: “The rules covering foreign exchange deals can be complicated and customers with some firms may not have as much protection as they might expect.”
Foreign exchange (or Forex) firms in Europe are regulated by their appropriate local body (for example the FSA in the UK) under the European Communities (Payments Services) Regulations 2009 but it distinguishes between smaller and bigger firms. Small firms are known as “registered payments institutions” (or RPIs) while bigger ones are called “authorised payments institutions” (APIs).
Regulation of RPIs basically checks the firm exists and isn’t run by someone previously convicted of financial crime. These firms don’t have to prove to the FSA that they have enough capital to keep the business going. However, a lot more checks are carried out on APIs and this type of foreign exchange firm is subject to a lot more rules.
The key one is that the customers’ money has to be kept in a segregated client account as opposed to the bank account the firm uses to run its business. This arrangement protects the customer’s money in the unlikely event that the firm goes bust. CurrencyFair is an API and maintains its client accounts with a global banking provider rated A by S&P and with a market capitalisation of over $100 billion.
Crown Currency Exchange was an RPI and didn’t have a separate client account – that’s why customers lost their money when the firm went under.
Meyers is also keen to expose the lack of transparency in the market. “Lots of firms offer ‘commission-free’ deals but these deals aren’t always as good as they sound. In most cases the rate will be hiked up to make up for the fact that there’s no commission charge. The key to working out the best deal is to look at the total cost of exchanging your money. So you need to sit down with a calculator and work out how much £1000, for example, will cost you with firms X, Y and Z once you’ve taken the rate and any commission charge into account.”
Meyers also warns consumers to be wary of currency exchange comparison sites. “Sites like sendmoneyhome.org stress their independence but are funded by the providers they list on their site.”
Customer feedback has been overwhelmingly positive. John Traynor had this to say; “The rate I was offered by my bank to convert $ to £ was dreadful when I compared it to the rate shown on CurrencyFair’s website. There were no hidden costs and the process was fast and efficient, whilst the customer service was outstanding.”
ENDS
For interviews contact Brett Meyers on +353 (0)1 244 9585 or brettmeyers@currencyfair.com. Download high res photos and further information including fact sheets, user stories and pre-recorded interviews here: www.currencyfair.com/media-centre.
About CurrencyFair
CurrencyFair is the world's first peer-to-peer foreign exchange marketplace. CurrencyFair customers are able to exchange funds and transfer them overseas at a fraction of the cost of traditional banks or brokers, due to its unique and innovative p2p model. CurrencyFair was incorporated in April 2009, and went live online at the start of May 2010. Since then, thousands of customers have been served, saving them millions of Euros in bank fees and exchange rate charges.
Based in Dublin, Ireland, CurrencyFair is regulated by the Central Bank of Ireland under the European Communities Payment Services Regulations 2009. CurrencyFair Australia is regulated by ASIC, the Australian Securities and Investments Commission.
