Plane tickets and hotels aren’t the only things that cost money when travelling abroad – it can be surprisingly expensive to access your own money from other countries. Or at least that’s how it used to be. Now, a new generation of fintech startups are creating increasingly more products and services that won’t penalise you for having an international outlook.
Trust is still an issue for fintech startups: a High Street bank may be more expensive, but you don’t have to worry about losing your hard-earned cash. But as the newcomers are become more established, this is changing. A person who frequently transfers cash to family back home is highly motivated to look for a better rate, and someone who travel often can certainly be tempted to move over to a bank offering a debit card that won’t sting you with a quid charge every time you use it.
Britain’s fintech innovation hub has a generally international flavour that mirrors the fact that this country is full of people with ties to other countries. This flies in the face of what Theresa May said last year at the Tory party conference: “If you believe you’re a citizen of the world, you’re a citizen of nowhere.” For several of the UK’s tech startups, their business models are rooted in the fact that this country is full of people whose lives are not contained within these borders.
Here are five London fintech startups that should be on the radar for every proud citizen of the world:
Not charging people for using bank cards abroad was the opening salvo from Revolut when it first launched in 2014, but a lot has happened since then. When we spoke last year, CEO Nikolay Storonsky said about 15% of Revolut users are using the product as a peer-to-peer transfer service, which is charged at interbank fees. Then there’s the fact that transfers between users is essentially instant, because Revolut holds client money in a pooled account. In February, Revolut made another big leap by launching current accounts, starting off by issuing UK IBAN numbers at first, and with IBANs in EUR and USD to follow.
Usually, the only way to get a great rate on sending money abroad is to make a big transaction. Azimo, however, takes a more democratic approach: the London-Krakow fintech startup charges the same of everyone, whether they have £50,000 or £50. “It’s about being a fair, sustainable business where people trust we’re going to do the right thing for them,” co-founder Marta Krupinska said when we met last year. “We believe that migrants are building their lives in the belief that it’s going to be better in the new country, and they want to give a better life to their families back home.”
People have all sorts of reasons to join a challenger bank – the travel-friendly elements are only one them. Not charging people for using their bank cards abroad are one feature of next generation bank Monzo, which is still in Beta and provides customers with pre-paid debit cards only. Other perks offered to travellers is that Monzo avoids many unnecessary fraud blocks by tapping into your phone’s geolocation services – this means they can determine if you are indeed in the same location as your card.
London-Madrid startup ETFMatic charges just 0.5% to run personalised ETF funds for its customers. But since November, ETFMatic has started offering portfolios in in three currencies: Pound Sterling, Euro, and US Dollars. This means their customers can now diversify their investments in order to protect themselves against currency fluctuations, without having to pay extra for the privilege.
TransferWise is a London fintech startup success story, known for its low-cost international money transfer rates. The way that TransferWise manages to do this very clever: the money never actually leaves the country of origin. TransferWise makes this possible by having accounts in each of the countries where it operates, so it can collect on one end and pay out on the other without actually have to move the cash. For the customer this doesn’t make much difference – except that TransferWise can claim to be around eight to ten times cheaper, and five times faster, than transferring money with a High Street bank.