CurrencyFair - www.currencyfair.com - the world's first online person-to-person foreign exchange marketplace, that lets people cut out the banks and get a better deal, today launches its service in New Zealand.
CurrencyFair is a unique, fully regulated, internet-based marketplace, where users from around the world can exchange currencies with each other, at rates only otherwise available to multinationals and international money market professionals. It hands back power to the people who want to change Kiwi Dollars for Pound Sterling, or Aussie Dollars, or any one of the fifteen leading currencies currently available with more planned.
It's the perfect solution for expatriates, foreign homeowners, international students and small businesses. In fact anyone who needs to buy or sell foreign currencies and is tired of being fleeced by the banks, which routinely rip out huge percentages on foreign exchange deals.
"None of these groups are anywhere near big enough to qualify for the best rates with the banks," says Brett Meyers, CurrencyFair's managing director.
"With CurrencyFair they can get the best rates plus the assurance that there are no hidden charges or spreads to worry about."
CurrencyFair works by matching two people with complementary currency exchange needs, putting the two together, anonymously, over cyberspace. And makes sure the transaction is safe and secure.
Although the matching algorithms are fiendishly complex the concept itself is simple.
Take this example. Customer A has Pound Sterling (GBP) and wants to convert them to Kiwi Dollars (NZD). Customer B is in the opposite situation and has Kiwi but needs GBP. If both go to their banks, each side will typically pay at least 3% more than the interbank exchange rate. But if both join CurrencyFair, they can swap their currencies at close to the same rate that the banks themselves get when dealing in millions. And with CurrencyFair's commission being incorporated into that rate and no hidden charges, it really is a case of what you see is what you get. It's even possible to get a better rate than the interbank, which until now was completely unheard of.
"We've all seen how the peer-to-peer model has revolutionised betting. Now, after several years of work, we've applied that same concept to currencies," says Meyers. "But, of course, here there is no gambling and the only organisations that risk losing are the banks and internet forex providers. CurrencyFair is a challenge to their lucrative profiteering."
The average CurrencyFair customer, regardless of transaction size, pays approximately 0.3 to 0.55% of the amount exchanged plus NZD5 per transfer in fee. This as opposed to a typical 3% from banks plus NZD45 per transfer, and specialist brokers who will normally charge 1-1.5% plus NZD30 per transfer.
CurrencyFair's low, flat rate transfer fee (NZD5) is a bonus, especially on smaller transactions. A customer exchanging NZD 2,000 will save around NZD50 on the rate and NZD40 on the transfer fee (compared to bank charges) resulting in about NZD100 saving. An exchange of around NZD 10,000 will see the customer saving about NZD300.
CurrencyFair has created a marketplace anyone can access and because it's person-to-person. You only exchange when you get a fair price, not one generated by a take it or leave it bank.
The company’s press release claims that CurrencyFair is also doing its bit to reduce bankers' bonuses. “In less than 12 months, they have deprived the banks of over NZD 1.54 million in potential profits, which are now in the back pockets of CurrencyFair Customers,” according to the press release.
Meyers says: "If you can find a better deal than CurrencyFair at a bank or a specialist online forex dealer then grab it with both hands. But I bet it won't happen. CurrencyFair was set up to offer fair rates to both sides of the transaction and cut out the banks and other middlemen. It's a concept whose time is now - thanks to the power of the internet and its near universal take-up."