An Alternative May Exist for the High Interest Rates while Exchanging Foreign Currencies
Kristo Kaarmann and Taavet Hinrikus may well have invented a system, which can put serious threat to renowned banks when it comes to foreign exchange. Owing to a bank’s high fees, the duo invented a simple and traditional alternative to financial exchange.
The concept of money is transforming every day. Gone are those when cheques were used. In the mobile age, most financial transactions happen through either tablet or a smart phone. Reputed market research firm, Forrester is predicting the death of liquid cash very soon.
With an array of paying platforms available on a consumer’s fingertip, the advent of Internet and its growing penetration across the globe is surely highlighting the end of cash some time soon. With more and more innovation at the technological front, the consumer psyche is changing drastically.
One such company who is a front runner for technological innovation is called the TransferWise. The company has devised a simple mechanism through which foreign exchange is not only cheap, but extremely convenient at the same time. The concept is known as Peer-To-Peer Transfer.
Instead of involving a bank to exchange the money, this company matches the requirement of one person with another. A simple example of this system is, suppose a person is looking to exchange Dollar for Euro and another person is looking to exchange Euro for Dollar. TransferWise would do a straight swap between these two individuals making sure that the money never crosses the border of the two countries.
The advantage of this system is the fact that you will get the actual rate of return as you would see at Reuters or Bloomberg. You will escape the bank’s extremely high charges and shoddy rates.
The two friends got the idea when they became expats in London and were confronted with the shocking rate of interest bank charges their customers for foreign exchange.
Taveet used to work for Skype and had to pay in Euros while Kristo had a mortgage and had to pay in Pound. Co-incidentally, both of them had bank accounts in both the countries. What they decided is to put the exact amount they required in each other’s bank account based on the exchange rate. This solved both their problems. Within months they had saved thousands of Pounds and realised the need of thousands of other customers out there. Thus, started the journey of the company!
The company has been cheered by the market for the deployment of top notch technology and fairness. It has made the whole affair of exchange simple.
Any bank’s word is not the final word anymore. The company has been authorised by bodies like Financial Conducting Authority (FCA) too.
The company is already functional and now renders its services to as many as 40 countries. So far, the company has helped customers transact worth a total of a massive $3 billion and have managed to save $135 million for them. It is now planning to roll out its services to the US.
Foreign exchange in the future will not require you to go to the banks anymore!