[kictanet] Forex market disrupted by technology?

[Paul Kukubo ICT Board]

Listers

This is worth observing from the perspective of what technology can do. 

TransferWise launches its online currency exchange today, which hopes to give the banks a run for their money, along with disrupting the consumer-end of the money exchange market as a whole. The headline proposition is that the platform gives anyone access to the same mid-market exchange rates that banks get on their interbank market, with TransferWise charging a flat fee of £1 for each transaction regardless of the amount being exchanged. That’s potentially a big deal.

But what’s equally notable is the company’s founders, which includes Skype employee number one Taavet Hinrikus.

He spent 7 years at the VoIP company, most recently as Director of Strategy, as well as being an Angel investor in a number of other prominent and upcoming startups including TweetDeck, Mendeley, wikimart.ru, and blip.tv. TransferWise’s other founder is Kristo Käärmann who has a direct financial services background with Deloitte and PricewaterhouseCoopers.

Naturally, Hinrikus says he wants TransferWise to “do to currency exchange what Skype did to telecommunications.” It’s a nice line but in this case there appears to be meat on the bone. Traditionally, consumers pay between 3-6% for foreign currency payments at through their bank. In other markets that have moved online, cutting out the middle person (for the most part) has “brought down costs almost everywhere you look”, notes Hinrikus.

To that end, TransferWise, which is licensed by the UK Financial Services Authority (registered as Exchange Solutions Ltd.), facilitates money transfers at “global mid-market rates” as reported by Bloomberg, XE and others. At launch, the company enables exchanges between the British Pound and Euro, with more currencies to follow.

TransferWise’s direct and indirect competitors include Moneybookers and PayPal at the low-end, or for larger amounts currency brokers like HiFX, as well as other upstarts such as CurrencyFair, and the banks of course. The company remains self-funded by Hinrikus and Käärmann.

get widgetminimize
TransferWise

Website:	transferwise.com
Founded:	March, 2010
TransferWise is an online currency exchange service that allows people to exchange currency using mid-market rates for a flat fee. Learn More
Information provided by CrunchBase
get widgetminimize
Taavet Hinrikus
Companies:	TransferWise
Information provided by CrunchBase
Sent from my iPad
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.kictanet.or.ke/pipermail/kictanet/attachments/20110124/fb52174f/attachment.htm>