P2P Currency Exchange?
The P2P phenomenon which started with online communities and has now spread to lending money, couch surfing and music swapping has another possible application: currency exchange.
The reason I mention this is because of the highway robbery some currency exchange outlets are carrying out. To give you an example:
Last week I took a trip to Sydney. I bought some A$ at Christchurch airport through the BNZ. Their rates are always very good usually a spread of around 2-2.5%. Now that’s still pretty big but remember these rates are change maybe once a day max and the markets can be moving as much as that. I bought some US$ at 0.7929 knowing the market was actually trading at 0.7945 so i was getting an almost at market rate.
But when I arrived in Sydney I checked out the rates available at Travelex. These guys are offering outrageous prices (unfortunately they are at Auckland airport also).
Their spreads on A$ to NZ$, US$ and GBP were 20%, 15.6% and 22.4%.
Who are these guys kidding. In market vernacular I could drive a bus through that spread (more like a fleet of them).
So what to do? Well we have P2P lending now established in many commonwealth countries. So how about extending that to provide a currency service within the new distributed network.
It’s food for thought.
Tags: banking, currencies, forex, markets, microfinance, money, p2p, systems, web 3.0
April 19th, 2008 at 12:36 am
That would be an idea thats definately worth looking into and taken further as well.
At the moment a group of 50 or so Ni-Vans (from Vanuatu) are living in the lodge here in Alexandra and are charged atrocious fees for transfering their remittances back home.
A traveler passing through was also expected to pay $30 for transfering the same amount there through the Western Union Bank.
April 22nd, 2008 at 11:46 am
Hopefully peermint will facilitate lending between Australia, New Zealand and Canada. But I’m not sure how far away they are… perhaps it is something that Nexx.co.nz will consider, at least between NZ and Australia.
April 23rd, 2008 at 5:15 am
Yes I’m hoping P2P networks will provide this service. I am sure Nexx will be one of them and I have spoken to them about it.
The main issue will be around cash and how to hold it but there may be a way for a smartcard type approach.
There is another way also but I’m keeping that to myself for the moment
June 12th, 2008 at 2:04 pm
like most Europeans I use a bank card/credit card to obtain cash from an ATM when abroad. Typical fees for that range from 1% to 1.75% (varies depending on the fees of the bank that issued the card)
That is much cheaper than exchaning cash currencies