A bank-beating foreign exchange proposition

The Irish Times International Money Transfer Service partner, moneycorp, has seen its Irish business grow quite spectacularly since establishing here in 2013. Originally founded in London in 1979, the foreign exchange specialist turns over €20 billion in transactions annually.

"We came to Ireland to offer competitive rates and to provide clients with an alternative to the banks", says managing director, Bryan McSharry. "We beat the banks on exchange rates, we have a better online trading platform, and our fees are lower. We also offer superior client management service."

The company offers exchange rates that are significantly better than those offered by the banks, and transaction fees as low as €5. In addition, each client is assigned their own personal account manager who is available by phone, and takes the time to understand their specific requirements and talk them through the transfer process providing expert guidance around the vagaries of the currency markets.

“We beat the banks because we are a one trick pony”, McSharry explains. “The banks started out as savings and loan institutions hundreds of years ago and then branched into multiple product lines. We focus exclusively on foreign exchange and beat the banks because our cost base is so much lower than theirs. Furthermore, the banks have traditionally charged too much for foreign exchange. Our technology platform is also dramatically better and allows for same day trades. If a customer walks into a bank branch in Galway or Waterford or Dublin and asks to buy £10,000, the manager will give them the rate that they were given by their head office first thing that morning. That’s effectively yesterday’s rate. We offer real-time trading and our customers get the rate as it is at the precise moment of the trade – this enables us to give our customers the best rate available all the time.”

Irish clients have been quick to take advantage of the moneycorp offering. “Business is absolutely flying in Ireland”, says McSharry. In reality we are a high growth fintech business. Our proposition is based on technology, customer service and competitive rates, and that is very compelling.”

The company’s customer base is divided between corporate clients and private individuals with relatively large foreign exchange needs. “We are now attracting a lot of major companies as corporate clients”, McSharry notes. “We are getting a lot of enquiries from companies who are exporting or importing products or paying staff internationally or even buying machinery abroad. If you are a food company and you are selling to Tesco UK you need to hedge against potential currency changes. It’s the same if you are selling into the US. If you are importing from China the price is fixed now in US dollars and you have to pay on delivery in six months’ time or later. The best way to hedge against that risk is to buy forward in dollars by maybe six months. We can offer rates to our customers to buy or sell up to 24 months out.”

He points out that foreign exchange means different things to different clients and the moneycorp service can frequently make a major contribution to the bottom line. “If you are a software company trading on margins of 30 per cent it might not matter so much, but if you are a food company trying to survive on 2 per cent or less it matters a lot. Our experience shows that once we have established a relationship with a corporate client we get almost all of their foreign exchange business. We have definitely seen an upturn in this side of our business since the Brexit referendum. Of course, extreme volatility isn’t good for anyone, but we advise our customers on how to deal with that as best they can.”

The private client side is also important. "We have clients who might be buying or selling a property overseas", says moneycorp dealer, Andrew McGonigle. "If you have been living and working in London or Sydney and are moving back home you might be selling a property and want to bring the money back to Ireland. On the other hand, if you are moving abroad you might want to buy a property and move money from here to fund the purchase. We also have clients who have overseas inheritances and need to convert US dollars or other currencies at competitive rates."

Modern employment situations also lead to people availing of moneycorp’s competitive rates and low fees. “There is now a situation where a lot of people live in Ireland at the weekends but commute to the UK to work during the week”, McGonigle explains. “This can be as simple as someone driving across the border to Northern Ireland for work or they might have a job in the City of London and might fly in and out every week because they have family here. This requires a large amount of currency transactions and our rates make a big difference.

“More than 200,000 people in Ireland work for overseas multinationals and many of them receive shares and share options as part of their overall remuneration”, he adds. “They are building up assets in dollars, or other currencies, and are coming to us to convert the dollars into euro when they cash them in.”

McSharry points out that there is also a significant cohort of Irish people working in the Middle East, and other emerging markets, where the currencies might be prone to sudden falls in value. “They have accounts with moneycorp and are able to convert their currency to euro on an ongoing basis - these are our regular clients. We also have clients who might just have a once off need such as buying a car in the UK or paying college fees for a child in a university in Britain or the US. Anyone with a foreign exchange need who wants to beat the rates and fees charged by the banks should come and talk to us.”

[ www.irishtimes.com/sponsored/money-transfer-service ]