Cross border currency exchange startups have emerged as one of the hottest sectors in the payments and overall fintech sector, with companies such as TransferWise, Kantox and Azimo raising multi-million funding rounds. Merging digital platforms with currency transfer, these startup firms are providing efficient and low cost transactions to compete against traditional remittance companies such as Travelex and Western Union as well as banks.
With a growing list of startups targeting both the consumer and business slices of the money transfer pie, competition is now evolving from being only against banks and remittance firms, to each other. Proving that trend is the launch of SettlePay, a UK based money transfer firm created by Whites Group.
Like other payment startups, SettlePay provides an easy to use dashboard to enter desired transfer amounts to generate a quick quote. Being added though an ‘audit’ feature which is the ability for users to also enter terms of previous money transfers to receive what SettlePay describes as letting you see how much you have been overcharged by your current providers.
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Cost comparison tools are far from a new feature in the payment industry, with several sites aggregating transaction details from their affiliated partners. As for companies adding comparison tools to compare themselves to their peers, this phenomenon is a more recent trend, but one that can be expected to continue as startups face more competition from other fintech startups. In this regard, a similar model was launched by Wealthfront in January. In that example, Wealthfront allows their users to connect asset management accounts from competitors to evaluate their fees.
There’s a lot of noise made around the complexity of foreign exchange
Similar to Wealthfront, SettlePay’s goal is that more disclosure about foreign exchange transfer costs will raise awareness about fees and lead customers to lower cost players. On this, SettlePay Managing Director, George Thomas stated: “There’s a lot of noise made around the complexity of foreign exchange. This is made worse for UK businesses by major banks and even many new ‘disruptors’ in the forex space being non-transparent and, in some cases, blatantly misleading, with their charges. The truth is, every provider in the industry can buy foreign currency at the same rate at the same time. The difference comes in how much they then sell it on to their customers for. We’re very proud of the disruptive nature of SettlePay and fully expect it to lead to a significant amount of awkward conversations between SMEs and their current Forex providers once the lid is lifted on charges they’ve incurred.”