Ireland, the U.K., and Australia, chief operating officer Michael O’Donovan says. Customers include expatriates working or living abroad, business owners, international students, and people purchasing property overseas.
One of O’Donovan’s friends, for example, recently needed to import 20,000 euros worth of furniture for his business, which supplies furniture for daycare centers, but he needed to pay for it in British pounds. He paid 800 euros, or 4 percent of the transaction, in currency exchange fees, O’Donovan says.
The fees would have been 90 percent less had he used CurrencyFair, O’Donovan says. “Effectively, that’s his profit. It’s straight to the bottom line,” he says. That businessman is now a CurrencyFair customer, he adds.
CurrencyFair isn’t the only online peer-to-peer money transfer company out there. London-based TransferWise offers a similar service and has raised money from high-profile backers since launching in 2011—reportedly $33 million from the likes of Richard Branson and Valar Ventures, which was co-founded by Peter Thiel. Other related startups include Boston-based peerTransfer, which focuses on international tuition payments and has raised more than $20 million from Spark Capital, Maveron, and other investors.
Yet in these early days of peer-to-peer online money transfers, CurrencyFair and its competitors are still dwarfed in the marketplace by banks and traditional foreign exchange brokers. “We’re just trying to build up” the industry of alternative currency exchange and payments companies, CurrencyFair head of online Brian Monaghan says.
CurrencyFair’s short-term to-do list includes developing a mobile app and adding new product features, Meyers says. The company also plans to continue to expand to more countries, including the U.S., Meyers says.
CurrencyFair can currently transfer funds to and from the U.S., but only for customers who live outside the U.S., and only via domestic wire transactions that can result in a small receiving fee on top of CurrencyFair’s charges, O’Donovan says. Many of its current transactions involving U.S. dollars are made by American citizens living abroad who want to send money back home. The company will seek regulatory approval to serve U.S. residents and to make automated clearing house (ACH) transfers that would mean zero receiving fees, he says.
Winning U.S. approval will likely be a long, potentially expensive endeavor because each state has its own licensing requirements for money services businesses. CurrencyFair is raising more funds that would partly be used to expand to the U.S., Meyers says.
Over the long term, Meyers is curious to see how the financial services sector evolves as more tech startups continue to challenge the status quo. “It’s a lot of specialist people basically chipping away at the banks,” he says.
In response to lost revenue, many banks have started corporate venture arms to “work more closely with innovators” and “make acquisitions down the line,” Meyers says. “But big companies like Apple are entering the game as well,” he adds.
It’s a chess match to see who will “own the customer in the long run,” Meyers says.
“Are banks just going to become the plumbing?” he says. “It’s fascinating how payments are evolving.”
