With the recent stampede of newer companies entering the foreign exchange market, it is quickly becoming a battle for a share of the sector. While companies such as TransferWise are garnering the majority of headlines, international currency provider FAIRFX are emerging as a solid alternative. Patrick Brusnahan reports
After winning three awards (Best Corporate Travel Prepaid Card, Best USD Travel Prepaid Card and Best Prepaid Card Website) at the latest Prepaid365 Awards, as well as a huge television marketing campaign, attention is garnering around FAIRFX.
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Founded in 2007, the company offers a cloud-based peer-to-peer payments platform for multi-currency payments, either direct to bank accounts or at over 30 million merchants and over 30 million ATMs in more than 210 countries.
This is as well as utilising mobile apps, the internet, SMS, wire transfers and MasterCard or Visa cards. It also offers a FAIRFX Currency prepaid card.
While FX is a packed space in the financial sector, with newer entrants coming into the market, such as TransferWise, and old heads still in the industry, such as Western Union, CEO of FAIRFX Ian Strafford-Taylor believes that his company offers something different.
When speaking to EPI, he says: "Where we differentiate ourselves from other prepaid travel card providers is the depth of our technology.
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By GlobalData"We build everything a lot deeper. That means we can be far more nimble and have better apps.
"We’re far more in control of our own destiny in terms of how quickly we can adjust to our customers’ needs. I think that’s really the difference."
Excellent time for exchanges
Strafford-Taylor considers now to be a very good time to be in the business. He puts this down to three reasons.
He says: "First, the marketplace for FX as a whole, or what we call deliverable FX, is a huge market and it’s growing.
"Secondly, you see an increasing preponderance of people prepared to do financial service transactions on mobiles and apps. The banks are also doing a lot of that.
"Thirdly, you’re seeing a lot of business going away from the banks so we’re in the right place at the right time with a fintech type product differentiated from a bank with a lot of cool, clever stuff on mobile and apps for people to use. We’re in the sweet spot right now."
A crucial advantage that FAIRFX has is the absence of a massively hindering legacy system.
With this absent, decisions don’t need to go through several levels of administration, never mind fitting digital changes into a dated non-digital system.
Strafford-Taylor says: "We’re very nimble. Decisions are very easily made. I meet with all my senior staff once a week and we prioritise together so we can make decisions on the fly.
"It’s much easier for us. I used to work in large banks, so I know how hard it is to get stuff done in places like that. It’s a definite advantage."
Increasing awareness
Due to this prime moment, FAIRFX has been focusing on marketing for the last couple of years.
The first push was in 2013 and business grew by 50%. The same thing happened the next year.
This year, efforts include a TV commercial starting in June and sponsorship of Sky Sports F1. However, there’s still a struggle to make people aware of its solutions.
Strafford-Taylor says: "[People] are stuck in their ways and also, candidly, people tend to glaze over a bit when it comes to FX. It’s complicated.
"The price is not stamped on. FX prices are moving every second with speed. It’s hard to get around what it is really costing you.
"There’s almost double levels of ‘default programming’ in people here. They’ve done things a certain way forever compounded by the fact that it’s quite hard to understand."
Strafford-Taylor says the trick is not only to acquire customers, but to keep them. He says: "The total key is acquiring customers and making them stay with you.
"We’ve got almost 450,000 retail customers now. It’s hard to answer how many are active because how do you define it? How many transactions a year? You might go on holiday this year in July and in August the next, so that’s no transactions for a year.
"Suffice to say, a lot of those 450,000 are active. With the majority, we see a lot of repeat business. We see a lot of strong retention when cards come to expiry; we receive a lot of renewals.
"We believe that once someone becomes a FAIRFX customer, they stay one."
Security concerns
With the current trend of making financial transactions easier and more frictionless, not only in FX and remittances, but in all financial transactions, security becomes a major talking point.
The balance between accessiblity, good customer experience and strong security becomes an ever thinner tightrope as each year goes by. If it’s easy to use, is it easy to misuse?
However Strafford-Taylor has no such concerns. He says: "Security is a concern, but our record in fraud is amazing. Our fraud percentage is ten times better than any of our competition. The typical bank fraud percentage is 0.3% and we’re at 0.03%.
"Within our database, we have a number of additional fraud checks as well as the standard ones.
"There are checks there that exist in any payment provider or any merchant, but we felt we needed to add our own.
"We give every customer a score and depending on how that score changes, we’ll give them a security call to check. What we don’t do is just block someone’s card. It is a differentiator."
Run and push
Things are looking good for FAIRFX. In the CEO’s words, he wants to ‘run as fast as I can’ and ‘push as hard as I can’.
Strafford-Taylor concludes: "Clearly, we expect to grow and grow. We don’t have an exit strategy in mind. We’re not doing this to sell in a year’s time.
"Basically, we believe in the product. Why would you want to get out? It doesn’t make any sense at all and we’re enjoying what we’re doing and seeing it grow."
