Executive Interview: Daniel Abrahams Elaborates On Institutional FX, Bitcoins and Entrepreneurship

It has been a very interesting year of development for entrepreneur Daniel Abrahams, founder of FX rate comparison site MyCurrencyTransfer.com, with a variety of new initiatives having taken place, including a relocation of the firm's operations from London to Tel Aviv.

In this week's Executive Interview, Mr. Abrahams talks to Forex Magnates about the firm's future foray into institutional FX, the pros and cons of virtual currency and what he views as the necessity for attracting forward thinking talent to drive FX businesses forward.

As an introduction, please let us know some detail regarding your professional background, and what led you to start MyCurrencyTransfer.com.

I’m a British-Israeli entrepreneur. While I was studying International Management in Sydney, I received a very poor deal on my own foreign exchange. Whether it was the airport bureaus adding uncompetitive markups of 10% + or banks taking huge chunks out of my international Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, I felt this was a truly opaque and un-transparent marketplace. Travelling around Europe, our company’s co-founder Steven also felt the pain with dreadful deals on travel money. We started the business late 2010 to help visitors find fair and cheap international money transfer deals.

When starting MyCurrencyTransfer.com, what did you set out to achieve, and how do you differentiate from the competition. How did you go about achieving it.

We wanted to create what we envisaged at the time as a sort of kayak for currency. Our mission has remained the same: to help every visitor worldwide find cheap & transparent foreign exchange deals. We’re not a bank, broker or currency sales team. This sets us apart and builds a sense of trust among our visitor base.

There are lots of affiliate sites out there with extremely basic information and will purely promote companies that pay the most amount of money. Our goal was always to build a technology-based platform & trusted dynamic engine to aggregate the best value money transfer deals on the market.

Recently you relocated the office from London to Tel Aviv. What led that move, and are you looking to move away from affiliation/recommendation and into the Retail FX sector, as there are a lot of FX technology providers in Israel?

It was a talent acquisition move. The opportunities to develop further in the FX industry are hot in Israel. From the best digital marketers to the most astute data scientists, Israel has it all.

Naturally, for any new opportunity, we’d need to analyze the level of competition & our market penetration potential. We’ve built a pretty large database and a strong name in the deliverable foreign exchange space. At the moment, we have guys working on analyzing the data, number crunching and working out whether there is a strategic fit between deliverable & institutional FX. If it’s complimentary, great. If we have to start from ground zero, it can be an expensive game chasing new customers in an already mature market.

Why Israel? The UK, along with most of Western Europe has experienced economic downturns which have hampered technological development. Do you consider Britain to be technologically inferior to America and Israel?

Israel has more companies listed on NASDAQ than all of Europe combined, more startups per capita than anywhere else in the world. I could go on. It’s such a vibrant hub of entrepreneurship and from my experience, the entrepreneurs are more mature & goal driven than anywhere I have experienced across the world. I’m a firm believer in the role of the military helping massively with Israel’s ‘economic miracle.’

Our offices in London are in the heart of the ‘Silicon Roundabout’ and there are a whole host of initiatives to help breed a tech city here. The plan is to build two thriving offices and marry up the appropriate needs of the business with the best geographic talent.

In going into the institutional FX sector, will you white label an existing product, or will you go to a Prime Brokerage solution and connect the platform via a bridge so that you can tailor the offering. If so, what would you do and which market will you target?

We have aimed our services at accruing a reputation for being fair, independent and impartial. Sticking to these roots is very important. Whilst we have not worked out the exact direction we will take, I know for certain it won’t deviate too far away from a comparison or recommendation offering. We’re a brand & will never go down the affiliate route.

If we can offer quality product comparison, that's something to think about. Another route is to become more of a ‘generalist’ aggregator built from a solid engine and go into non forex type verticals. It’s very early days.

Today, the FX industry has very low spreads and by the time the IB/sales force has been paid, the regulatory capital has been set aside, the white label provider / Prime Broker / Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term solution has been paid, there has to be a huge amount of volume generated to make it viable. Do you see your business as more profitable than FX or do you think MyCurrencyTransfer can offer both side by side and still be a viable business?

You know Andrew, we already work on incredibly tight margins with our sister travel money comparison product, MyTravelMoney. Most thought we wouldn't be able to hit profitability as the FX rates and spreads are so tight. I’m a firm believer that if your product is valuable enough to solve real problems that exist in the world & the market is big enough, volume will come.

Will you offer the transfer and trading of virtual currencies such as Bitcoin at any time? Is Bitcoin credible or do you think it will go the way of Liberty Reserve?

Bitcoin is not on our radar at this moment, however it certainly is an interesting and credible movement. A couple of our deliverable fx providers previously used it as a method of payment, and it will be interesting to see if, how and when they start accepting them again.

We have heard about the Liberty Reserve shutdown, and we don’t believe the same fate awaits Bitcoin. Bitcoin is a lot bigger than any single exchange, and is made up of essentially code, so for a government to take that down would be very difficult. Should they decide to arrest some Bitcoin developers, like a game of whack-a-mole, more would inevitably spring up.

We do think that Bitcoin will need to be made easier to use, making it easy for laymen to grasp its concepts and methods of use. At the moment it’s all a bit overwhelming managing your wallet, and seeing exchanges being hacked and money stolen. But I suppose that is the sign of maturity, where the exchanges learn from their mistakes, or are weeded out. It’s certainly an exciting development, that over time we may want to be a part of.