The Money Cloud Joins The French Chamber of Great Britain – A Good Time To Reflect On How Far We & The Industry Have Come

We’re delighted to have become members of the French Chamber of Great Britain. As a fintech startup that specialises in providing the best overseas money transfer price comparison, we look forward to exploring synergies with businesses in both Britain and France, building long lasting relationships, and taking advantage of the excellent events and resources on offer. 

We cater for all types of money transfer, but what may be of particular interest to our fellow members of the French Chamber of Great Britain is our ability to offer best in class money transfer solutions to businesses and high net worth clients looking to make international transfers of a significant size.

These are the kinds of deals where businesses and individuals stand to lose the most, therefore finding a broker you can trust and with whom you can enjoy a fruitful and longstanding relationship is essential.

So please feel free to contact one of the team at any time and we will make it a priority to arrange a meeting or a call and go over the details with you. It’s the least we can do.

The early years of money transfer

12 years ago, when Huw, my co-founder at The Money Cloud and I first began working in the overseas money transfer or “remittance” industry, the world was a very different place.

We were not the super-connected world that we are today. There was no such thing as an iPhone, social media, mobile payments or the blockchain. We were still heavily reliant on manual processes to get things done, and when it came to transferring money, the fees were high, and the wait was long.

When we started, Donald Trump was still a Real Estate developer! Tony Blair and the Labour party had just been returned for a second term in the UK, and in France, Jacques Chirac had recently defeated far right leader Jean-Marie Le Pen of Le Front National, by a landslide, to engender a more tolerant, pro-European France.

Plus ca change, as they say. Of course, much has changed – we are approaching iPhone number 8, and Britain appears to be on its way out of the EU – I know which event I am looking forward to more – but it’s also true that many things have remained the same. This dichotomy applies very much to the remittance industry.

Whilst the industry has taken huge strides forward – and nowhere more so than in France – the only nation in the G20 to have hit targets set to reduce the average cost of sending money abroad by at least one percentage point every year for five years – there is still so much that can be done.

Let’s start with the positives

Overall, the costs of sending remittances overseas by migrants to support their families, friends, or to buy property, pay for school fees, make mortgage payments or for any other reason, have come down – from around 9.7% of the total transaction cost, according to the World Bank, who first started tracking prices in Q1 2009, to around 7.5% today.

Steady, but slow, progress.

But there is also another measure, known as the “Smart Remitter Target”, which aims to reflect the cost that a “savvy consumer with access to sufficiently complete information” pays to make an overseas transfer, and this figure currently stands at just 5.72%. That’s more like it!

The number of alternative ways of sending money overseas that bypass the hefty fees and uncompetitive exchange rates offered by banks, and money transfer agencies we won’t name here (but they, and we know who they are) has increased exponentially.

The channels through which we can make these transfers have also diversified significantly; peer-to-peer, mobile to mobile, bank account to bank account, via the blockchain; and transactions can be initiated using mobiles, laptops, wearables – even using voice activation and gesture control.

Remittance has benefitted considerably from the tech disruption of the past decade, and the industry is so much the better for it. Now the business world is also beginning to realise how much money they can save by using a broker or a disruptive money transfer service as opposed to a bank or a wire transfer agency.

Now for the bad news

Alternative, disruptive firms offering money transfer services are struggling to achieve the market penetration they deserve – 85% of overseas transfers, be they business or personal, are still made through banks or high street money transfer agencies.

We feel that this is unacceptable. Banks are simply not set up to provide effective international money transfer. For banks, the service is an afterthought which relies on creaking legacy systems, incurs large fees dues to its not being a core service, and uses uncompetitive exchange rates because they do not have ready access to foreign currency.

High street money transfer agencies have traditionally relied on opportunism to stay profitable; capitalising on sender’s ignorance of the alternatives and often their desperation for the transaction simply to go through. This has meant charges to customers at both ends of the transaction, and barely credible exchange rates.

The solution?

At The Money Cloud we have made it our mission to give our customers the full range of options when it comes to moving money overseas. We have partnered with some of the UK’s best currency and foreign exchange brokers, all of whom are authorised by the Financial Conduct Authority, and some of the most progressive money transfer agencies, such as peer-to-peer site TransferWise.

By giving consumers the facts, and enabling them to see the full range of across one easy to use platform, we believe we are taking a huge stride towards creating a fairer, more visible and better way to make remittance payments.

But we are not stopping there.

Soon, across the whole of Europe, the second Payment Services Directive will be implemented, allowing fintech startups such as ourselves, with the customers’ consent, to carry out transaction on behalf of consumers, using API’s that link directly to customers bank accounts.

And that is exactly what we intend to do.

The next stage in the development of The Money Cloud will be to create a holistic, secure and private financial dashboard that gives customers a comprehensive view of their finances, and stores their information for them securely.

This means that we can negotiate bottlenecks such as Know Your Customer or Anti-Money Laundering checks with brokers independently, allowing users to make their transactions inside the platform in just a few clicks, and in a matter of minutes, at the best prices available.

Our platform is the culmination of 12 years studying the remittance industry and trying to find ways to make it a cheaper, fairer place.

Who knows what the world will be like in 12 years’ time. But whether its blockchain, mobile, AI or wearable driven, or most probably all 4, we know we’ll be ready for it, and so will our clients.