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Another P2P Payments system

With the general frustration folks appear to have with bank fees – not sure why as banking has to cost something, doesn't it? – I just got wind of the new Currency Exchange for P2P transactions.  Here's how it works:

Or, if you prefer, in text form:

"CurrencyFair is the people's exchange."

For example, "Jim is an Aussie living in London. He still has a flat in Sydney and he rents it out. The rent he gets he has to exchange into pounds to help finance his flat in London.  But while he is trying to change dollars into pounds, Shirley wants to turn her pounds into dollars. She's retired but wants to help out her son-in-law who has just started a business in Brisbane. We bring Jim and Shirley together …

"You can browse and choose the deal you want because it's a market. That means if anyone does try to charge above the odds for their Pounds or their Zloty or whatever, they'll never sell them. It's as simple as that."

Or, if you prefer, here's how it works in picture form:

Currency Fair 

To secure everything, Currency Fair works with Bank of America.  As they say:

"We're no friend of the banks. Except one.  We are a friend of Bank of America. All your money is held in segregated client accounts with Bank of America, the largest bank holding company in the United States by assets. That's bank speak for your cash is safeguarded by being held separately to ours."

Interesting choice of Bank of America, although BoA did have a 'vision' unit – they used to publish the Future Banking Blog – and that could be the reason why.

The only downside of Currency Fair appears to be that it has been created by a bunch of Irish, Welsh and Ozzie ex-banking backpackers – that must be the reason for the sheep in the picture above – but hey, you can't win 'em all.

Postscript: American Express exchange rates at Heathrow Airport …

Currency

Hattip to @thebankchannell and @ashdonaldson

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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This quote If you’re getting something for free, you are the product has been floating …

  • Interesting idea, but I’m not sure how much traffic it will get. You’ve still got the classic problem of getting funds in and out of the system, which can take two days on both ends. With traditional currency exchange, you get the money immediately. Also, it seems unlikely that you’d be able to get exactly the amount you want unless you underprice it so that dealers will buy it. Finally, you need a foreign currency account to put the money in, so you couldn’t use this, say, to fund an upcoming trip.

  • Interesting idea, but I’m not sure how much traffic it will get. You’ve still got the classic problem of getting funds in and out of the system, which can take two days on both ends. With traditional currency exchange, you get the money immediately. Also, it seems unlikely that you’d be able to get exactly the amount you want unless you underprice it so that dealers will buy it. Finally, you need a foreign currency account to put the money in, so you couldn’t use this, say, to fund an upcoming trip.

  • Interesting idea, but I’m not sure how much traffic it will get. You’ve still got the classic problem of getting funds in and out of the system, which can take two days on both ends. With traditional currency exchange, you get the money immediately. Also, it seems unlikely that you’d be able to get exactly the amount you want unless you underprice it so that dealers will buy it. Finally, you need a foreign currency account to put the money in, so you couldn’t use this, say, to fund an upcoming trip.

  • Interesting idea, but I’m not sure how much traffic it will get. You’ve still got the classic problem of getting funds in and out of the system, which can take two days on both ends. With traditional currency exchange, you get the money immediately. Also, it seems unlikely that you’d be able to get exactly the amount you want unless you underprice it so that dealers will buy it. Finally, you need a foreign currency account to put the money in, so you couldn’t use this, say, to fund an upcoming trip.

  • Interesting idea, but I’m not sure how much traffic it will get. You’ve still got the classic problem of getting funds in and out of the system, which can take two days on both ends. With traditional currency exchange, you get the money immediately. Also, it seems unlikely that you’d be able to get exactly the amount you want unless you underprice it so that dealers will buy it. Finally, you need a foreign currency account to put the money in, so you couldn’t use this, say, to fund an upcoming trip.

  • Interesting idea, but I’m not sure how much traffic it will get. You’ve still got the classic problem of getting funds in and out of the system, which can take two days on both ends. With traditional currency exchange, you get the money immediately. Also, it seems unlikely that you’d be able to get exactly the amount you want unless you underprice it so that dealers will buy it. Finally, you need a foreign currency account to put the money in, so you couldn’t use this, say, to fund an upcoming trip.

  • Chris Skinner

    Methinks you’ve missed the way this works Aaron as my interpretation, based upon the video, is that I can put £’s into the hands of the Aussie in the UK, who puts A$’s into the hands of the Brit down under, e.g. there is no currency transfer, just local transfers … or that’s the way I saw it.
    Chris

  • Priya

    I am not sure about the AML implications this may have

  • Chris Skinner

    I guess it’s like money movements with prepaid cards or Hawala Priya, but unlike Hawala this will leave an audit trail and I’m sure that any unusual activities will be monitored and reported (bearing in mind the founders are ex-bankers) …

  • Joe

    The video is misleading in comparing this to the rates available from bureaux de change, as they offer physical delivery of foreign currency notes.
    For this system to work, the users need bank accounts in both currencies, which is a completely different scenario!

  • Chris Skinner

    True Joe
    This is a critical difference in that it does not need users to have accounts in both currencies, but assumes that the user wants to deliver money to someone who has an account in the destination country, e.g. a relation or friend.
    Chris

  • Ajay Kumar

    I checked the rate and this is what I found, if I exchange my €1000 into GBP, I get £846.50 @0.8465 if I convert back the GBP into Euro, I get only €989 @1.1683, so I still lose 1.1%, which certainly is lower than the normal consumer rate, but still has some commission applied on the transaction.