A FinTech startup in the UK is looking to innovate the travel sector by taking the ‘nuisance factor’ out of a traditional traveller pain point – the currency exchange.
Established in 2011, by a former trader Jared Jesner and a one-time corporate finance advisor Simon Sacerdoti, WeSwap went live in 2013 and promises to be what its founders call, “the future of travel money.”
Using an app, members get a person-to-person currency swap for a 1% flat fee by matching outbound travellers with inbound ones.
This week, Jesner and Sacerdoti announced that $8.4 million was raised in their latest funding round.
Eliminating the need for traditional service providers like exchange points and banks, WeSwap’s registered customers are provided with a Mastercard, which can be loaded with as many as 10 different currencies.
Their website sums up the appeal for the user: “No fake exchange rates, hidden fees or shocks when you get home.”
Users get their money through an ATM, or they can pay for purchases using their WeSwap Mastercard.
Clearly a challenge to traditional financial service models – in the UK, bricks-and-mortar banks can charge as much as 5% for exchanging money – WeSwap already has rivals.
Based in London, Revolut enables travellers to load a pre-paid Mastercard from their bank account via the app and operates with 90 currencies.
Revolut offers the service at the interbank rate – an exchange that has no fees – and one that consumers do not routinely have access to.
A year ago, UK banks and traditional players began experimenting with innovating their travel money options including Sainsbury Bank and Travelex who introduced a Supercard, which offers a similar deal.
In Australia this week, Melbourne startup Airwallex announced that they are ready to launch their innovative low-cost currency exchange after raising $5 million in their latest funding round.
Amongst the investors is the investment manager of ecommerce giant Alibaba, Hong Kong’s Gobi Partners.
Operating a unique algorithm, Airwallex allows users to complete international transactions in real-time at the interbank rate in their own currency.
Marketed especially to contractors, investors, service providers, and international students, Airwallex has already secured regulatory approval to operate in Hong Kong and China.
The company expects to attain its Australian Financial Services License (AFSL), necessary to open shop here, in the next few months.