CurrencyFair Money Transfer Interview

So how did the idea of building CurrencyFair come about, and what problems did you solve initially?

Ben: Sure. It does sound a little bit like a joke. You have a couple of Australians and Irish men and British person walk in to a bar, and come up with a brilliant idea which was resolving around a frustration. A frustration was God the banks ripped us off when sending money abroad. We work with banks and we are not against them. It’s not us versus them or anything like that, but it is a case of they were losing money when they were sending money to another country. So they said if we need this problem resolved, maybe others do it too. Typically what happens is that banks who are the providers who charge 3, 4, 5% margin on top, when sending money to another country. And so the way it’s been structured on average its 0.35%

Paul: So it a huge savings.

Ben: Oh yeah big time.

Ben: The magic. Yeah I mean if I start with the way it used to work, so you’d never tell that I’m Australian. Back in Australia the first time I ever did an International money transfer, I remembered I rushed out of the office at lunch time and ran out to try and beat the queues. Sure enough there was the queue and half an hour wait, for the one bank teller because they had all gone off on break. Finally get to the front of the queue; I need to send money to another country. Oh I’m not sure how to do that; I’ll go and ask Gerald at the back. Gerald having his sandwich and everyone is conferring and all this sort of thing, and eventually they worked it out after phoning head office. They charged me a fortune, it was a horrible experience. The way CurrencyFair works is it bypasses that slow expensive system, and what we do is two local bank to bank transfers. So you put your money in one country, you exchange it to the currency that you wish, and out it pops at the other end. The way that we can keep it at a low cost is we are matching people moving in the opposite direction.

Paul: I see.

Ben: So we manage to trickle those cost away and it’s fast. The weird thing that, when I say weird I just love it because yes cost and saving money is wonderful, but the control is something I really enjoyed the first time I used it as a customer. So it was a rare experience.

Ben: Sure. On the personal side expats, someone working in another country. Then you’ve got a large group of people who have retired abroad, so heading off to Spain, France, and they are getting their pension pay. They just set up an automatic monthly recurring payment service so it just comes.

Paul: They get it automated.

Ben: Exactly. They get an amazing rate, so they getting more money in their bank account. They can spend on fine wine somewhere, student subsidy. Then on the other side on the business side you’ve got the SME’s. Our biggest group is the personal customer.
But I remember the first ever transaction for CurrencyFair was $400,000 Euro from a business that needed to save a lot of money. So we have been expanding gradually into the SME, the business market as well.

Ben: Yeah. It’s usually important to communicate what you bring to people, as against the value proposition if you like. But for me it’s not so much the messaging and the angel you take, to try and communicate with people, it’s more around education. Because the vast majority of people don’t realise that they are getting stung. So just walking to a discussion today I went passed several currency exchange shops, and you see them on the streets. You got the big sign that says 0% percent commission, or commission free. Well you know they are not in it for love, they are obviously making money and there is a commission there.

Paul: It’s just what you call it

Ben: Exactly, exactly. Some companies try to hide that with they show interbank, the rate that you see when you Google exchange rate that’s the interbank. There’s no mark up or anything. So for me and for CurrencyFair, it’s about educating people that in fact there is a cost. So when I talk about 3, 4, 5% exchange rate mark-up it means that that’s 3-5 pounds for every 100 that you send. Or $3-$5 for every 100 that you send. With us on average that’s $0.35 cents out of every 100, so every 100 that you send it does add up quite substantial. I mean in terms of education a quite generic sort of phrase or whatever, but I heard of a case recently where someone used us to buy a house back in their own country. By using us to do that they saved enough money to do a whole new kitchen. Another one of my favourites was a guy who used us to buy a Harley Davidson, because he’s always had a dream of riding around the edge of Scotland, the beautiful coast line.

Paul: Mid-life crisis.

Ben: Maybe who knows? But yeah with the savings from that he had the cost for the fuel, mechanic and all that kind of stuff covered just by using simple transaction. Yeah its good fun.

Ben: I have to say from the start I think they are an amazing company; they’ve done a great job really impressive.

Paul: Amazing marketing.

Ben: Oh yeah. I love saving people money but you’re never going to catch me running around in my underpants. Let me just say that now on air if you like, but I think it’s a great company. I think any person who would need to be sending money; they should look at different options other than the banks, so ask Transfer Wise. I do think we are probably different in some ways; we are different geographies in some instances. They are probably better on the small amounts than CurrencyFair, but at the end of the day once you get a certain amount a couple grand upwards, I think we could be beaten on price and services and stuff like that. Of course I’m going to say that but generally I think we’re a very strong proposition.

Ben: Yeah sure. Well I did look up last month of all the people who use the market place option. I think that 14% beat the interbank rate. What that means when you go on to Google and you type in GPD to USD or AUD to Euro or something like that, the number that shows up on Google is the interbank. That’s pure zero rate right. With us if you’re not in a hurry, you can chose to use our market place option. Which means I see a rate which doesn’t even exist yet, but I’m going to choose that rate.
If someone matches me it may happen instantaneously, it might take a day or two but if the rate moves and so on and someone matches you in the opposite direction, you can actually achieve that rate that doesn’t even exist which is better than the interbank. Yeah and about 14% of people did. The first time I ever did I went this is just crazy. So I talked about control before, but it’s a little bit of fun as well.

Paul: Yeah, yeah. Do you get a good take up of clients using that option, because it sounds pretty unique?

Ben: Yeah I’m pretty sure we’re the only company in the world that can offer that. Yeah like I said about 14% achieved it, and I think as the word gets out that will probably grow.

Paul: It sounds similar to a limit order or a price target.

Ben: Yeah.

Paul: Being reliant on the other side of the market effectively matching off your requirements is probably where the special source comes in.

Ben: Exactly.

Ben: The majority of people still just say I just want to do this right now, and they still get an amazing rate you can’t get anywhere else, but it’s pretty amazing to have this other options where you can do even better.

Ben: Sure. Obviously we are fully regulated in every environment in which we operate. In terms of Europe you got the payment services directives that govern how everything is run and managed. The big element to that is segregation of funds. So when people use us to transfer into a different currency, we can’t touch that. We can’t just go speculating and buy property around the world, on that sort of money. It is segregated, it is your own money. I’ve seen in other countries like Australia ASIC which is the main governing body there, but it’s always around segregation and having enough capital to operate and all that sort of thing. It’s fully audited constantly by the different international European bodies.

Paul: Good. Doing things right no matter where you are in the world.

Ben: Yeah it’s just play it safe and if we did something wrong then other business would fail, we need to make sure we do things properly so that people trust us because that’s probably the biggest element to all of this, is about trust.

Ben: Yeah. Well it’s going well. I always like it when people spread the word about us, because in the early days and still very strong people has told others to come and use CurencyFair. For us as a business it’s more around growing, the market is just huge in terms of people using banks verses not. So when we talk about other companies, I genuinely have no concerns with Transfer Wise and other companies being in the space because it is just so huge. So for us its expanding our reaches to those different geographies, and also expanding the business side of things because a lot of business saves a lot of money by using us. So were going to develop further and making it just a lot smoother and efficient for everyone, user friendly.

Ben: Sure couple of things. I mean the world has evolved from when I did my first money transfer, and having to queue up and miss my sandwich, through to I can do it online with the app on my phone. That’s just in the money transfer space. There’s loans and all these other areas of Fintech developing. The next stage in the money transfer side of things would be I think it’s called the PSD2. They are the payment directive 2.0 let’s call it. Whereby API’s and banks are going to becoming a lot more into the fore, so banks being sort of segregated. Maybe companies like us and others have talked about banks being the bad guys, they are still going to be around. So there’s going to be a lot more integration I think, which is a fantastic thing for the consumers. So you can just have everything as you wish easy, accessible, the level of control will be within your decision anyway. On the Fintech entrepreneur side of things, I think the big one is around the product market fit. So make sure that whatever you are developing, it fits what people want and need to the point that it delights them. Where they then will be saying to themselves and to others, I’m so glad I found this site. I’m so glad I found this service. Because you can talk about the bells and whistles I don’t know, the product, elements and features but you just want them to be absolutely delighted. I know for instance my first ever time when I used CurrencyFair at the very end I went, I just beat the bank literally just beat their rate.

Paul: Did you tweet it?

Ben: I wasn’t on Twitter then, but absolutely if I could take back time. But that’s what I think every Fintech business and every general technology start up, should be focusing on getting that moment delight, because that’s where those referrals.

Paul: That’s where referality comes from.

Ben: Exactly.

Paul: I’m so pleased. I do want to Tweet and tell everyone effectively, you’re mad not to use these guys because these guys are awesome.

Ben: Yeah, yeah exactly right. That’s what we are hoping forward to continue in our business, and we’ll support everyone else in that mission.