If it’s not transparent, it’s not fintech!

Posted on the 31st May 2016 by Hamish Anderson in Founders' blog

If it’s not transparent, it’s not fintech!

Whenever I’m asked to talk about Money Mover’s international payments platform, cutting costs is normally the last thing that I mention. Why? Because telling a small business that you’re going to charge them less is easy, but without knowledge and information it’s really hard for the SME to know whether they’re actually getting a better deal or not.

For us, the defining characteristic of fintech has always been finding ways to use technology to improve the way that financial services are delivered. It’s about building a web application that optimises the way that our customers make their international payments, and there’s so much more to it than simply cutting costs.

We know, because our users tell us, that the legion of brokers and currency dealers operating in this space lead on price. They promise to reduce the margin a business pays to purchase or sell a particular currency, and indeed they may do (for a while, anyway, until that price starts creeping back up).  Are they generally cheaper than using a high street bank to make an international payment or exchange funds between two currency accounts? Yes, but that’s not terribly hard given the high margins that banks charge SMEs (research into SME cross-border payments that we commissioned earlier this year from Accourt, showed that one high street bank charged SMEs fees in excess of 3.5%, and the average was in excess of 2.4%).

What the banks and the broker community seem to fear above all else is transparency – which we describe as giving customers the information they need to make an informed decision. In the case of an international payment this means showing your customer not just the effective exchange rate they will be receiving, but the mid-market rate as well. While you’re at it, why not show them the cost, in pounds and pence (or dollars and cents!) of the payment, so that they can put it into context. Tell them exactly how much of their home currency a foreign currency payment will cost, not just an indication with a foot note informing them that they won’t get a final figure until they’ve confirmed the payment.

Transparency is not just about the numbers. As we’re coming to expect with the leading courier firms, the technology exists to tell international payment makers exactly what’s happening with their money and when it’s going to reach their recipient. So why not make this information available via a dashboard, and email it for good measure? Funds really don’t need to disappear into the ether for a week while you worry about when an important payment will reach a supplier.

When we talk to the SMEs who use Money Mover it’s this level of transparency they really appreciate and why they choose Money Mover over other providers.  Obviously, they enjoy the benefit of reducing their transaction fees and currency charges and are making significant savings.   However as Denise Cadd, Finance Director at Business Logic Systems said in a recent case study. “With Money Mover everything is transparent you see what Money Mover gets and you see the savings against the bank. For me transparency is essential, it helps build trust. We know we are being treated fairly and that’s essential for any business relationship.  Plus, we always get the best deal whether it’s for BLS or our suppliers”.

Read the full case study here.

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