If you’re running a business which trades internationally and imports or exports on a regular basis, exchanging one currency for another should be quick, simple and cheap. However, in practice, foreign exchange has been a minefield of hidden costs and charges, with British SMEs losing £2.8bn and Irish SMEs losing over €430m annually to hidden and unnecessary high FX fees. This is not just a number. This represents dreams, growth opportunities, and hard-earned money being unfairly taken from businesses striving to expand and succeed internationally.
The last decade has seen a first wave of ’fintech’ providers who have taken the fight against banks for lower and more transparent FX fees, and things have definitely changed for the better. Businesses today do have a better choice, and are able to find cheaper FX service providers who are transparent in terms of mark-up or spread. This development is welcomed and we stand alongside and support these companies. In fact, many of these are probably our strategic partners who use our platform to make a difference to their clients (banks included).
The market has still not gone far enough. You can save more cash
Getting the best deal is still not as simple as it could be, and you’re probably paying too much for an inefficient service. Most of the new FX service providers use aggressive marketing which say that your are being charged the interbank exchange rate, but then you get charged a fixed “spread” or “mark-up” of 0.4% / 0.5% for using their self-service platform, or you get hounded by emails trying to up-sell you subscription fees.
On top of that, you might find that what seemed like a good deal is just a “teaser” or introductory offer that only applies for a limited time or for certain currencies. Just because a provider was the cheapest last time you needed a foreign exchange service, it doesn’t mean they’ll be the cheapest next time. Even the cheaper providers, who have been very vocal about how much banks charge, are probably overcharging for their services and haven’t gone far enough in bringing down fees.
We just don’t believe this is disruptive enough. While you as a busy business owner handling company finances might be willing to pay the prices you pay today, it’s important to know that you can still save dramatically more on currency exchange. At ALT21, we’re committed to generate the maximum possible consumer surplus for your business, transparently and in perpetuity.
There is a better, more affordable and transparent way
At ALT21, we’re on a mission to democratise foreign exchange and save businesses both time and money. We’ve invested heavily in technology so we can provide foreign exchange at ultra-competitive prices, even for the smallest businesses. You can exchange currency at the market rate – the rate that banks pay – and pay one of the smallest, if not the smallest fixed fees on the market, on top. To keep things simple, it’s the same fee of 0.04%, for all currencies, all the time, with no hidden or subscription fees on top. That’s a total cost of just £40 for every £100,000 you exchange.
We think this is a fair price, and we’re so confident that we can offer this sustainably in the long-term, that we’ve decided to show you how much we’re making for ourselves, before you make any cross-currency transaction with us. We have implemented a fully transparent commission ticket, consistent across all products we offer (FX spot, and FX hedging such as forwards and options), for any currency pair.
We open up our business model to you, by letting you know pre-transaction how much we’ll make from each operation in real-time, on top of the inherent transaction costs. We do this because we are committed to providing you with the best possible prices for all products and services – not just for spot transactions, but also for hedging solutions. Equally, we do this because we are confident that our multi-year investment in our state-of-the-art, fully automated technology platform gives us the operational leverage to sustainably bring down costs for your international financial operations, in a way that no other service provider is willing or able to match us. After all, who would want to show you how much money they make from your business, if that cost is unjustifiably high?
How does that compare? We picked one day in May and looked at the cost to change £100,000 into Euros and US dollars with some of the leading providers. As the table shows, ALT21 is many times cheaper than digital fintech providers and as much as 90 times cheaper than the average high street bank. For a business with a million pound import or export turnover, switching from a high street bank to ALT21 could save you tens of thousands of pounds. This is just a snapshot, but our simple pricing model means that, whenever you trade, whatever the day or currency, you’ll pay the same and you’ll always know in advance.
Of course, a final priority for any business is reducing uncertainty. At ALT21, we don’t just offer spot foreign exchange. In our next blog, we will explore how, through our user-friendly, self-service platform, you can also protect your revenues and profits against currency volatility, by accessing simple hedging solutions to minimise risks.
At ALT21, we’re on a mission to bring down the costs of foreign exchange even further, across all types of currency operations and hedging products. Our technological advantage and operational leverage puts us in pole position to be able to do this uniquely better than the current market offering, and the more your business works with us, the more we generate economies of scale advantages that allows us to continuously save costs and protect profits for your business.
Get in touch to find out more or open an account with ALT21 today.
