shane mcquillan

I am a web developer currently living in Bangkok, Thailand. My interests range from technology to innovation. I am also interested in web development, programming, and entrepreneurship.

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Low Cost Transfers
We have lived in a world in which the banks have controlled the amounts of money we must pay in order to facilitate a money transfer and you are most likely wondering why I am referring to this in the past tense. Well there is a very specific reason for me to be referring to this in the past tense. In recent years we have seen the advent of Fintech, which is Financial Technology to those of you who are not in the know of current terms. So if we look at money transfers, we have seen a number of applications and services come into being which offer low cost transfers and this is causing disruption to the traditional methods in which the banks control the transfer markets. That is a key word there, “disruption”
Cost of Money Transfers
Though it has not reached a level where the banking sector as a whole will feel it, the beginning of major disruptions are in place through a number of new and not so new service providers who are utilizing new techniques and technologies to bring the cost of money transfers down from the sky high prices we have been paying and enabling low cost transfers. But for those of you who are not familiar with the pricing structures and costs associated with money transfers, let’s take a quick look at how the banks have been and are still making money.

A money transfer spread is a basically the buy and sell prices which is wrapped around the mid-market rate of the currency instrument you are looking to buy or sell. This in effect, gives the bank and immediate profit, you would think, but then you really do not know the currency markets. The currency markets are some of the most volatile markets in the world and thus, there has to be a spread to cover market movements which happen before settlement, or well, that is what they want you to think. In reality, the bank will take large hedging positions and will look at its net exposures with regards to the underlying currencies and match off buyers and sellers with each other to enable a win win situation for the bank. They have been at this for years and they know exactly what they are doing.
Money Transfer Fees
So the bank is immediately making money and then they are going to make sure you pay a fee as well. Now there are two ways in which yo