Multi Currency Debit Cards – Should You Have One?

Some people like plastic, whilst others prefer cash. These two payment methods have been around for generations, and, until recently, there has been little to choose between them when it comes to choosing how to pay for goods and services.

Today, however, and particularly in the Western world, it seems that we are increasingly moving towards a “cashless” society, where debit and credit cards, or even mobile wallets, hold sway. But what about when we spend time overseas? Read more “Multi Currency Debit Cards – Should You Have One?”

Who Is Winning The Battle For India’s 1 Trillion Dollar Payments Market

At The Money Cloud we have kept a close eye on the Indian micro-payments market. It is fascinating for a number of reasons: firstly, it showcases some of the most advanced fintech being developed anywhere in the world; secondly, it is a model that it is likely to have a transformative effect on the way people pay for things, not just in India, but all over the world. Thirdly, it is a place where social media giants embrace finance, and lastly, it is an open field and nobody knows who will emerge triumphant from this fragmented and highly competitive market.

In the past, we have looked at Google payments app Tez, Paytm, WhatsApp Pay, and a range of services for sending money overseas, such as TerraPay, Instarem, Ria Money Transfer and more.

This week, an article in Bloomberg revealed that Warren Buffett had invested into Paytm, which demonstrates just how influential and lucrative the payments market in India looks set to become. According to Credit Suisse, the market will soon (by 2023) reach $1 trillion dollars, and stands at $200 billion today. But this volume accounts for just 30% of all payments, with the rest being made in cash. Compared with a market like China, where the mobile payments market is already worth $5 Trillion.

According to journalists Suritha Rai ad Anto Anthony, the major difference between the Chinese and Indian payments markets is that China is a closed shop to foreigners, whilst India’s government is welcoming international players to launch their services in the country. Hence, the world is looking on to see the future of the payments industry being incubated. India’s government is keen to move towards a cashless society, and has provided an enviable payments infrastructure to facilitate digital wallets, and domestic and international payments.

Looking at the numbers, however, it is Indian born services that are leading the way. Flipkart has generated more than 133m downloads, whilst Paytm leads the way with more than 150m. Google Tez apparently has 50m users, whilst another Indian firm, BHIM, has pulled in 32m customers.

What the Silicon Valley tech giants do have, however, is a colossal number of users who may well be tempted to switch their payments habits if the likes of Facebook, Google, and Apple can make their payments options more visible, effective, and a good cultural fit. In this regard, WhatsApp, which is phenomenally popular in India, is one to watch, but is yet to progress beyond the beta testing phase.

Google Tez has changed tack, and is now known as Google Pay, launching with a range of new services including splitting bill payments, and tap-tap-go style functionality that makes pinging rupees around as easy as messaging a friend.

And then there is Ant Financial, the Chinese fintech giant that commands huge volumes of transactions in the East, and is determined to break into markets including Africa, India, and the US, have narrowly missed out on the acquisition of MoneyGram last year.

Finally, could blockchain based payments apps make an impact on the market? Again, here, foreign players are on the charge, with Singapore based LaLa World has been making headlines, whilst online startup mag Inc42 lists no fewer than 13 new entrants, all with ambitions to be the everyday Indians preferred payments choice.

Warren Buffet et al should not expect to have things easy, but as things stand, it seems the Sage of Omaha has backed the right horse.

This content is sourced and brought to you by The Money Cloud – comparing the best rates for sending money overseas offered by hand-picked, regulated brokers and money transfer agencies.

3 Effective Ways Businesses & Individuals Can Hedge Against The Falling Pound

Over the weekend, news emerged that overseas footballers in the UK; of which there is a higher proportion than in any other international football league; have been attempting to hedge against further falls in the value of Sterling.

Sterling has fallen around 15% against both the euro and the dollar since Britain voted to leave the EU, dropping 3% in the past 3 months, and creating problems for businesses and individuals alike. In the case of the Premierships’ multi-millionaire footballers, many are asking to be paid in Euros, a request which football clubs, even those as rich as Manchester United, are struggling to accede to, due to the fact they do not hold sufficient foreign currency reserves.

Currency hedging can be a tricky business; knowing when to buy or sell a currency is an instinct that the best FX currency traders, for example, possess, but not even they can get it right every time. So what are the best options for individuals and businesses with financial commitments overseas? Let’s look at 3 strategies that might help to protect against unexpected, unplanned for losses.


Take control of your risk with financial projections

If you are a seasoned entrepreneur, business owner, or traveller, you may feel that you have an understanding of how currency movements play out, and what can be done to hedge against them. But experience alone is not enough; to ultimately make the right choices, planning ahead is essential.

All businesses, and even most domestic households, create budgets to try to plan for the future. In order to plan a currency hedging strategy effectively, it can be useful to plot different scenarios; a best case, worst case, and most likely case, for example, is a good start.

By plugging in different currency fluctuation scenarios into your budget, it should be possible to calculate when, for example, a sale and delivery of goods overseas becomes unprofitable, a holiday or spell abroad becomes prohibitively expensive, or, alternatively, when it becomes attractive to spend in the short term for longer term financial gain.

There is no guarantee that your scenarios will play out in real life, but they can certainly provide an effective way to manage your currency risk. It is up to a business, or individual, to decide how much appetite they have for risk – but before doing that, it is essential to have a clear picture of what kinds of problems and issues different attitudes towards currency risk will throw up. Fail to prepare,prepare to fail, as they say.


Consult a professional broker

If you are do not feel confident about which strategy is best for you, your family or your business, then it may be worth reaching out for professional help.

International currency brokers naturally charge a fee for their work, so it’s important to decide if the level of risk you are exposed to justifies the extra cost. Sometimes, currency related losses are simply unavoidable due to market, or political forces; witness the current situation in Venezuela, for example, where the government has been forced to launch its own Petrodollar cryptocurrency, a hedge against the Venezuelan Bolivar, which has simply spiralled out of control owing to uncontrollable levels of inflation.

If your currency risk exposure is long term and consistent, however, i.e. you are making regular overseas payments or regularly selling goods overseas, then a broker can help. They are likely to have a superior knowledge of how the markets may move, and not only that, they have access to vast, cheap, quantities of foreign exchange, giving them a significant advantage in the marketplace.

Interacting with a broker on a regular basis will improve your own knowledge of the FX markets, so you may not need to consult directly with your broker over every transaction, but if you have a significant foreign currency exposure, working with an FX broker represents a no-brainer.


Open a self-managed account

Thanks to the rise of disruptive technology, there is a great deal more transparency around the FX markets than there once was. Most brokerages, and a growing number of fintech startups, provide the means for you to run your own currency hedging service. There is no shortage of newsflow, either.

Comparison sites like The Money Cloud can give you an instant overview of the rates, fees, and transaction times offered by a range of MTOs (Money Transfer Operators), and even provide a digital dashboard that helps you quickly negotiate AML (anti-money-laundering) and KYC (know your customer) checks, store all of your transaction history for future reference, and even use techniques such as AI and machine learning to help guide your decision making process.

Brexit has created huge disruption in the value of Sterling, and the instability shows no signs of abating. Within the EU, nothing is guaranteed, as trade wars with the US and differing political agendas create uncertainty, whilst the US, China, Russia, Africa, the subcontinent, Asia and Australasia all have a role to play in sudden and unexpected foreign exchange fluctuations.

As discussed above, there are many different strategies that you can use to protect your own interests, whatever they may be; the one thing you can’t do, in the current environment, is do nothing. Other than that, it is up to you; whether you are an entrepreneur, traveller, or pro-footballer; to decide how best to hedge your currency exposure.

How To Send Money To Russia – Soon To Become A $68 Billion Remittance Market?

Russia’s market for international remittances is set to grow to $68 billion by the year 2021, according to research, with the fastest growing sector being bill payments made by companies, which looks set to double in size over this period. Read more “How To Send Money To Russia – Soon To Become A $68 Billion Remittance Market?”

How International Trade Secretary Liam Fox Plans To Turn Britain Into A “21st Century Exporting Superpower”

400,000 British businesses believe they have the capability to export goods, but are not doing so, whilst at the same time, international demand for British goods is growing, the government revealed yesterday.

Dr Liam Fox, the International Trade Secretary has used these figures; and the news that British overseas exports have grown by £26 billion year on year; to reinforce his belief that British exports can meet his target of contributing 35% to UK GDP, after the UK leaves the EU at the end of March next year.

Last year British companies sold some £620 billion worth of goods to overseas buyers, which accounted for 30% of GDP; a record high, according to the Department for International Trade. The government is keen to build on this recent success, and has responded to calls from businesses with a new Export Strategy that will look to encourage and inspire more businesses to export, place “increased focus on amplifying the voice of existing exporters”, “facilitate peer-to-peer learning, and “inform businesses by providing information, advice and practical assistance on exporting.”

The government will work on converting its website into a one-stop-shop for exporters, helping to connect UK based businesses with overseas clients, working with larger companies to build the capability of supply lines, providing financial incentives, and supporting SMEs as they enter new markets.

The Department for International Trade also wants to launch an awareness campaign to alert British businesses to an estimated £50 billion of export finance and insurance support available from the UK Export Finance organisation, as well as 250 International Trade Advisors based all over the UK who support what the government refer to as “Export Champions”, and invite more companies to join the nationwide network of exporters, using the slogan “if we can, you can”.

Dr Fox told reporters in a speech that “as we leave the EU, we must set our sights high and that is just what this Export Strategy will help us achieve”, adding that “UK businesses are superbly placed to capitalise on the rapid changes in the global economic environment and I believe the UK has the potential to be a 21st century exporting superpower.

Baroness Fairhead, Minister of State for Trade and Export Promotion at the Department of International Trade, also commented that “As the world’s sixth largest exporter, we do punch above our weight, however, we also punch below our potential. This Export Strategy sets out to change that and to increase exports as a proportion of GDP from 30% to 35%, taking us from the middle of the G7 to near the top. This is ambitious, but achievable.”

From a currency perspective, the Brexit effect has been nothing short of disastrous, with the pound dropping nearly 30% against the euro and the dollar since the referendum on 23rd June 2016. All the more reason for always looking to get the best deal when you are making transfers of money overseas. Using The Money Cloud to discover the best rates offered by leading brokers and money transfer agencies could save you as much as 80% on fees, per transaction. Aimed at businesses and individuals, it’s easy to use and guarantees you get all the facts before making a decision that can save you a substantial sum.

3 London Based Fintech Firms Pick Up Funding In Rounds Led by Augmentum Providing Boost For Disruptive SMEs & Startups

Augmentum, a specialist VC firm that focuses on promising fintech opportunities, made 2 investments last week into early stage, London based companies focused on the SME payments market, as well as a third investment into Duedil, which compiles information on unlisted early stage companies. Read more “3 London Based Fintech Firms Pick Up Funding In Rounds Led by Augmentum Providing Boost For Disruptive SMEs & Startups”

Are Brexit Woes Boosting Britain’s Luxury Goods Market?

This week the pound has hit new lows for the year against both the Dollar and the Euro. Upbeat trade news from the US coupled with rising inflation rates in the UK has seen the pound drop as low as $1.27 against the dollar, whilst weak retail sales figures and the looming threat of a no-deal Brexit caused a drop against the euro to €1.12. Read more “Are Brexit Woes Boosting Britain’s Luxury Goods Market?”

New Zealand Takes Surprising Step To Ban Foreigners From Buying Property In The Country

In a bid to calm an explosive domestic property market and create affordable housing for local residents, the New Zealand government has taken the unprecedented step of banning the sale of the country’s existing homes to foreign buyers. Read more “New Zealand Takes Surprising Step To Ban Foreigners From Buying Property In The Country”

From Vienna To Damascus? The World’s Ten Most, & Least, Liveable Cities In 2018 Announced

Every six months, the Economist Intelligence Unit publishes its liveability survey – a comprehensive attempt to rank the world’s cities in terms of their safety and stability, healthcare systems, levels of culture and environmental health, standards of education and strength of infrastructure. Read more “From Vienna To Damascus? The World’s Ten Most, & Least, Liveable Cities In 2018 Announced”

$60bn Medical Tourism Industry Is Thriving; But Watch Out For Exchange Rate Fluctuations

Have you ever considered getting your medical treatment abroad? This increasingly popular industry caters for a variety of treatments, from dentistry, to fertility treatment, to cosmetic surgery, to orthopaedics, and is driven by a surprising disparity in the costs of the same treatments in different parts of the world, and the quicker availability of treatments in some countries as opposed to others. Read more “$60bn Medical Tourism Industry Is Thriving; But Watch Out For Exchange Rate Fluctuations”

More UK Citizens Living Overseas Than Any Nation In EU, WEF Reveals

Brexit backlash may have damaged the UK’s reputation for cosmopolitanism, with the referendum result blamed in some quarters on an anti-immigration agenda, but surprisingly, it is Britain that leads the way when it comes to migrating overseas, according to data from the World Economic forum. Read more “More UK Citizens Living Overseas Than Any Nation In EU, WEF Reveals”

How To Cope With An International Trade War; The Small Business Strategist’s Guide

Now that Donald Trump has got his feet well and truly under the table at The White House, it is not surprising that there are trade wars been wagered all over the world. Trump seems to thrive on controversy, and he has certainly created plenty of it on the global stage, but perhaps more so than ever when it comes to trade.

In the past few months, he has threatened tariffs against Chinese, European, Canadian, and Mexican goods imported into the US, with China targeted the most. If he gets his way, assorted Chinese goods will be subject to some $250 billion worth of tariffs. The POTUS recently used Twitter, seemingly his preferred method of communication, to declare that:

“Tariffs are working big time. Every country on earth wants to take wealth out of the U.S., always to our detriment. I say, as they come, tax them. If they don’t want to be taxed, let them make or build the product in the U.S. In either event, it means jobs and great wealth.”

Is Trump right, and how does this affect the global trade prospects of the average small-to-medium sized business that wants to do trade with business partners overseas? Are there lessons to be learned, or is a policy of damage limitation a better strategy in these turbulent times?

Read our 3 point guide below and let us know your thoughts.


1/ Is Trump right or wrong about tariffs? Is his strategy worth trying?

One thing to bear in mind about the POTUS is that he is a businessman who plans ahead and often says things to cause a stir and create panic in the short term. Then, when he later softens his stance and makes a deal instead, he hopes to be acclaimed for being statesman-like and saving the world from another global crisis – but don’t forget, he created that crisis in the first place!

The situation with America and its global trading partners is complex, and it’s possible that Trump has a point when he claims that the US has made some bad trade deals in the past and needs to be more protectionist in its outlook. On the other hand, no other President has adopted this attitude and he risks a great deal each time he declares trade war on another country. Is it worth it?

As a strategy, it appears to be high risk and one that only works if you are supremely confident in your own abilities, and wield a great deal of power within your organisation. Most business leaders and entrepreneurs prefer to keep relations with their trade partners on a more even keel, and respect the rules and regulations more.

If you are planning to “go full POTUS” remember that you are placing not just your own, but your colleagues welfare in danger. Brexit is the kind of avoidable crisis that seems to have been pulled right out of the Trump playbook – if it ends in disaster, its perpetrators will have only themselves to blame. In short, if you conduct business like Trump, you may not win any popularity contests. You may win big, or you may end up with egg on your face.


2/ Do Trump’s Protectionist Policies affect global trade winds for SMEs and entrepreneurs

It seems unlikely. Most business leaders are beholden to their shareholders, business partners and colleagues, so proceed cautiously. Admittedly, the time to indulge in a “free-hit”, or emboldened trade strategy, is immediately after receiving a vote of confidence – in Trump’s case, being elected – when you are at your most powerful, and have the most amount of time to repair things if they go wrong.

But very few business leaders can affect global trade patterns on their own, and more often than not, trade policies will be chiefly decided by two things. The macro level considerations, and the micro level ones.

For example, your trade policies at the micro level will be dictated by circumstances such as whether you have a surplus of a particular product, the state of your current relationships with particular trade partners, your budget, and your long term business plan.

At the macro level, occasionally an opportunity might arise that results in a business going against its instincts for a short term gain. A good example would be the plunge in value in the pound after the Brexit referendum. Whilst most of us panicked, smart business leaders may have sensed an opportunity to make more sales, offload slow selling products, or look to import goods from the UK at a higher volume than usual, taking advantage of the weak pound.

To summarise, the global trade war is of course of crucial importance to the future of global trade, but it should not cause anybody to abandon their trading principles, unless an unusual and advantageous opportunity rears its head, that outweighs everyday micro-level trade concerns, Even then, it will have to be a carefully considered judgement call.


3/ What does the response from Trump’s targets teach us about trade policy?

It would be foolish to only consider what Trump is doing – what about the targets of his aggressive policies? Of course, China, Europe, Mexico and Canada have their own agendas to pursue, and these too will sometimes clash with global trade policies.

But Canada, Mexico, China and Europe have all found ways to reach a general consensus about acceptable business practices, and have shown a willingness to play by the rules. Whilst Trump is trying to pull the US out of trade deals, other countries seem content with the deals they have in place.

SME owners and entrepreneurs ought to note that, as the old saying goes, it is better to be “inside the tent p*ssing out”, than “outside the tent p*ssing in.” Consistently maintaining good relations with your trade partners, through regular, non-confrontational negotiations, is surely preferable to the energy-sapping and dramatic conflicts that Trump stages seemingly randomly.

Trump’s is a high-octane strategy that is extremely demanding. A shock-and-awe approach that most people find unsavoury, not to mention unnecessary. The only justification for such a policy, in fact, is if it gets results. A marginal gain is surely not worth the trouble, but if it is a complete reversal of fortune you are seeking within your organisation, if your very existence is under threat, if there is not other option but to “go full POTUS”, then at least you won’t die wondering.

If you are looking to send money abroad and would like to use a comparison service that gives you all the facts, including fees, exchange rates and transaction times, try The Money Cloud. We work exclusively with regulated money transfer brokers and use API’s to display real-time rates that you can compare for a wide range of currencies in just a few clicks.

Seen A Spanish Property You Love & Hoping To Make An Offer? First Add 15% To The Price. Here’s Why

The spike in temperature here in the UK will provide food for thought for anybody who has been considering relocating, or acquiring a property in Spain. There are two ways to look at it. Read more “Seen A Spanish Property You Love & Hoping To Make An Offer? First Add 15% To The Price. Here’s Why”

FCA Announces Plans To Stop Foreign Exchange Firms Enticing Customers By Promising “Unachievable” Exchange Rates

The FCA plans to take action against firms offering misleading exchange rates to potential customers, such as offering the “interbank” rate, only to switch to an alternative, less competitive rate once the customer is at a more advanced stage of the transaction.

Besides the offering of “unachievable” exchange rates, the FCA wants to stop firms making unsubstantiated claims about how much rival services charge, “unless the comparison is fair and balanced and the firm can prove that the claims made are true.”

The FCA revealed that the UK currency exchange transfer market for outbound services is worth approximately £60bn per annum, with remittances; sending money overseas regularly to support family or friends; responsible for roughly £18bn of that figure.

The new rules will be aimed at protecting “consumers who are individuals acting outside their trade, business or profession, micro-businesses and charities with an annual income of less than £1 million”, who are perceived to be most vulnerable due to having less experience of foreign currency exchange markets and what the precise costs of making a transaction ought to be. The FCA will insist that: “where providers compare the costs of their service with other providers, they do so in ways which are meaningful, fair and balanced, and capable of being substantiated.”

The main concern is the way in which a foreign exchange company may communicate a promotion offering a particular rate to win a customer’s business, only to offer a less competitive rate once the customer has all but committed to using the firms services. In the FCA’s view, the misleading offer has prevented the customer from visiting other sites or using a comparison service to compare real time or achievable rates offered by other service providers.

As much as possible the FCA wants to make sure that customers are getting all the facts and that there are no hidden charges or fees that are applied at a later stage, making a seemingly inexpensive transaction more costly than advertised, and giving the service provider an unfair advantage over competitors who are more transparent about their pricing and provide information about additional charges up front.

The FCA says that “research and evidence collected on market practices, as well as customer behavioural trends, indicate that customers face challenges in understanding the total cost of a currency exchange transaction”, and that misleading advertising “could lead to losses for consumers and SMEs.”

The second Payment Services Directive (PSD2) which came into effect EU-wide in January this year has introduced new legislation designed to curb misleading advertising practices within the international money transfer industry, and covering “disclosure of information, cost and charges for currency conversions”. The FCA also plans to take into account directives from the European Commission “designed to increase transparency of charges for payments that involve currency exchanges and to increase the comparability of the options available for payment service users.”

The FCA is inviting feedback from firms and interested parties before it decides what specific action to take. The public consultation closes in November, with new rules and guidelines expected to be released published early in 2019.

If you are looking to send money abroad and would like to use a comparison service that gives you all the facts, including fees, exchange rates and transaction times, try The Money Cloud. We work exclusively with regulated money transfer brokers and use API’s to display real-time rates that you can compare for a wide range of currencies in just a few clicks.

Santander Trade Barometer Suggests UK Businesses Growing In Confidence as They Step Up Brexit Planning

Hard or soft; divisive or united; Brexit is coming – or is it? – but British businesses seem to be ok with the prospect, according to research carried out by Santander.

The Spanish headquartered bank that has significant interests in the UK regularly keeps tabs on the state of British SMEs via its “Trade Barometer”; a research report based on interviews with thousands of business owners who have one thing in common; they possess the “size, scale or ambition to trade internationally or expand beyond the domestic market.”

In the latest update to the report, covering the start of the summer months, Santander says that more than 73% of businesses questioned expect to grow in the next three years – up from a figure of 65% for the previous quarter – and that the most optimistic businesses of all were those that plan to enter overseas markets.

This optimism is in part due, the report says, to a combination of firms ability to find new clients to trade with (51% mentioned this) and an expectation that the economy was improving (40% referred to this).

Inevitably, businesses are wary of the threat Brexit poses: 43% of businesses listed Brexit as a “future risk”, whilst 43% were also concerned about an economic slowdown, and just over 35% saw currency fluctuation as an issue. Yet, despite the chaos, it seems firms are responding proactively to the challenges they may face. Nearly one third of respondents indicated they would look to set up an overseas bank account (up from just over 25% in the last quarter), whilst 28% expect to freeze headcount, or reduce it.

Freezing headcount reflects fears that firms dealing internationally have about geo-political factors affecting their ability to trade successfully: 77% of firms felt these threats could restrict their ability to hire new staff, while 76% say they could hinder expansion into foreign markets.

According to Santander’s data, however, companies that want to trade internationally are more ambitious than any other types of businesses. 90% plan to make new hires, whilst 61% of businesses reported improvements over the past year.

85% of businesses that aspire to do business overseas were confident or very confident of growth, and 85% planned to invest in product development. Santander points out that there are caveats for any businesses planning to do business overseas, suggesting perhaps that businesses can be overconfident about their prospects.

Confidence and enthusiasm have an important part to play in the success of any business, domestic or foreign, but perhaps what’s most important about the data is that it shows that firms are taking the threat of Brexit seriously, and trying to understand the opportunities that a new trading environment will present.

From a currency perspective, the Brexit effect has been nothing short of disastrous, with the pound dropping nearly 30% against the euro and the dollar since the referendum on 23rd June 2016. All the more reason for always looking to get the best deal when you are making transfers of money overseas. Using The Money Cloud to discover the best rates offered by leading brokers and money transfer agencies could save you as much as 80% on fees, per transaction. It’s easy to use and guarantees you get all the facts before making a decision that can save you a substantial sum.