Brett Meyers explains the CurrencyFair model live on CNBC (Tuesday, March 29th)!
Despite Volkswagen’s impressive Q1 Operating profits dominating the screen-space, Brett discusses the basics of the CurrencyFair marketplace, Facebook payments and a whole lot in between. We’ve transcribed the dialogue below for your perusal.
He still refuses to wear a tie though, despite our best efforts here in HQ.
CurrencyFair CEO Brett Meyers on CNBC
I mean, how do you work then? How does this-
It’s basically exactly as they say on the idea that, in the major currencies that we deal in, people are sending money in both directions, so if we can match these people off before they actually have to go through what I’d consider to be quite a clumsy and expensive international bank.
Yes, we can catch them before they do that. We actually don’t need to send the money internationally, so really CurrencyFair works as an order driven marketplace similar to the stock market but instead of the price of stocks, you’re looking at the exchange rates, so if I’m sending money to Australia, I can say, “Right, I’ve got £2,000 and I want Aussie Dollars” and I can say, “Right, what’s the rate at the moment on the market” and I can either take that instantly or I can say, “No, actually I’m going to ask for a higher rate”, leave my order on the market and someone going the other way with Aussie Dollars can match that off.
So, you’re presumably getting a much better bit off the spread than if you were going to a regular bank or anybody else?
Yes, exactly, and banks typically charge about 3% in the exchange rate, certainly European banks. Australian banks are even worse. At the moment, they’re on around 5.5% from the research we’ve done. We chose 0.25-0.3% when customers match each other and on top of that, you actually bypass all the fixed charges involved in a swift payment; receiving bank, correspondent bank, because we only send money locally, you know. I’ll send my Sterling into CurrencyFair’s client account in London, someone else sends money into the account in Sydney, we match off. I now own some Aussie Dollars and they’re already in Sydney, so they stay in the local banking system so it’s actually faster as well.
Okay, because you’re not going cross band. Now, you talk about tapping into a market that you call digital nomads, right?
What is this class of person that you think there is?
Well, you see, we try to tap into all the different flows around the world of people moving so, for example, one that we have a lot of business in at the moment is Irish people who’ve moved down to Australia. We look at trying to work out what it is these people need and focus on, how can we reach these people, because we find that once a few people within that community know about the product then they tell other people. So, it’s really about capturing all those different flows of people because these days, a lot more people are moving around, you know.
It puts you into the small payments business. I mean, you say this is going to be a business that… when we talk about small payments and you were saying nought to what, 500 dollars or something?
You say, this is a business that Facebook, Apple, Amazon, Google are all going to take over from the banks, why?
I mean, you look at Facebook announcing a move and I think they will stay in the small payments space so I think our sweet spot with CurrencyFair is, sort of anything from 1,000 up. We do smaller payments but that’s where we’re unbeatable. I think to consider using Facebook to move 100,000 to pay for a house, I think certainly; not at the moment. People are not looking for that kind of thing, so I think in small payments, the reason Facebook have a good chance of being successful is that they just have all these users already, you know, so they have a channel to market straight away. I’m not actually convinced they’re going to do necessarily a very good job. I think payments for Facebook is more about monetisation than innovation.