Travel much? Currency exchange is getting easier
We’ve seen it first hand in many estates situations: families with property and assets in different countries. In the estate administration process, this can present a host of problems if proper planning hasn’t been done.
But just dealing with foreign property day-to-day has its challenges. And banking and currency issues are front and centre. Do you need to open a local bank account? What’s the best way to transfer money in different currencies? Is there an easy way to pay ongoing bills and taxes in your foreign country of choice?
Banks have had a lucrative monopoly over money transfers and foreign currency transactions for some time – and costs are high. If there was an area of banking that was ripe for innovation, this was one of them.
Enter TransferWise – a UK-based fintech company that has turned the currency conversion and transfer process on its head. The key innovation is that TransferWise doesn’t move money across borders. The system works on a peer-to-peer basis – if someone wants to convert their Canadian dollars to euros, TransferWise finds someone who wants to transfer money in the opposite direction (euros into Canadian dollars). As a result, Canadian dollars stay in Canada and euros stay in their euro country.
There are no fees hidden in the exchange. You get the mid-market exchange rate – the one you’ll find in the financial press. TransferWise then adds its fee to each transaction. The fee is clearly disclosed, so you know exactly what you’re paying. More importantly, the cost of the transfer is far less than what you’d get with one of the banks, the company claims up to 8 times less. You can find the Canadian site here.
International debit card coming
TransferWise just announced the next stage in its evolution – with the Canadian launch next year of a borderless debit MasterCard. The card will let you hold and spend a balance in multiple currencies, and, again, with lower fees than traditional banks.
TransferWise is just one of several innovative companies that are changing traditional banking in different parts of the world – but its focus on Canada sets it apart, at least for now. So, if you travel widely, or have assets abroad, you will soon have a new option for money management.