October 17, 2011
Remember the good old days days of overseas travel when you would look for a bank to get a fistful of the local currency before you even checked into your hotel? The worst part was knowing that you were getting ripped off one way or another. You were being charged for the foreign currency transaction by both your bank at home and this bank in London, Munich, or Tokyo – and there was probably a bank around the corner with a better exchange rate. And if you needed cash on a Sunday, you were SOL (this happened to my family in 1997 when we were in Austria – not fun).
We have certainly come a long way since then (thanks to credit cards, mostly), but the Ireland-based startup CurrencyFair wants to really improve the foreign exchange process. They are the worlds first peer to peer foreign exchange marketplace, looking to totally overturn the profitable stranglehold on foreign exchange transactions that banks still enjoy. Since launching in May 2010, their customers have saved over €1 million when you compare their rates with typical bank exchange rates.
Here’s how it works: Register – the boring part, as they say right on their home page – deposit funds for exchanging, exchange with someone – a real person, not a bank – who is offering a rate that looks good to you, and transfer your funds quickly, safely, and cheaply. Done. The exchange rate you pay is the same rate paid by multinationals and money market professionals dealing in millions.
Three of the 4 founders are ex-bankers, which they apologize for and which I found very charming, so they know what they are doing – to the point that they raised €1.7 million in funding and last month raised a second round of €670,000.
If you are planning to travel overseas soon (wish I was!), try them out before you go and let us know what you think by leaving a comment below.
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