PeerFX.com a p2p currency exchange that wants do to away with high margins and fees banks charge when exchanging currencies, announced to launch on August, 1st. Users will be able to change US and Canadian Dollars directly (USD, CAD).
Watch a video of the funding. The founders Robert Dunlop and Florence Leung gave away a 51% percent stake of the company for 250,000 CAN$ seed funding.
Personally, I am not convinced by the business model. For consumers there are less and less needs to actually exchange currencies in advance. You can nearly always pay with plastic. In Europe the realm of the Euro is expanding. And several European banks allow their account holders to withdraw cash from any ATM (of any bank) worldwide fee-free.
But maybe the situation is different between the US and Canada. What is your opinion on this, dear reader?
Really, of all the currency pairs, CAD-USD seems the most useless. My bank already lets me exchange between the two fee-free. Of course, there’s still spread – I believe 2% – but I’m sure this business must make money somehow, too.
CAD-EUR or GBP would also seem more useful. I can’t exchange between the two without paying a $5 transaction fee, plus the spread. It’s the same whether it’s cash at the bank, or taking it out of a European ATM. Minor currencies usually have a 1% higher spread, and while credit card purchases are fee-free in all currencies, they also take 1% more in spread – that annoying, hidden fee – than withdrawing cash, so it adds up to the same thing.
I’ll be interested to see exactly how this model works, and whether it can actually save a person money.
Well the whole point of this is to do away with that 2% spread. For those of us who exchange large amounts between CAD and USD that 2% can take a huge cut and with many Canadians hopping the border to buy cheaper American goods, myself included, this might just come in handy.
“You can nearly always pay with plastic”. I don’t know anyone but Americans who do this when travelling abroad.