Every transaction that moves in and out of South Africa is funnelled through the banks. There’s virtually no risk to the banks, which rake in more than R15 billion a year collectively from forex.
It’s a business model begging for competition, and that competition has arrived in the form of fintechs like Future Forex offering to slash 30% to 50% off the costs of forex transactions.
“It’s way past time for more competition in the forex market. The banks have been raking it in at the expense of customers for far too long, and it’s a message that is resonating with clients,” says Harry Scherzer, CEO of Future Forex.
Scherzer says banks are hiding the true cost of forex by burying their fees in the spread – the difference between the price of buying and selling US dollars, euros, pounds or other currencies.
For example, if the spot rate to the US dollar is R18 to $1 but the bank charges R18.36, you’re paying a spread of R0.36c for every dollar purchased, which equates to 2% of the transaction value.
For a transaction of R1 million, that means you’re being charged R20 000 extra in fees.
That’s not counting SWIFT fees of R500 to R1 000, as well as ‘commissions’ and ‘communication fees’ that some banks charge on top of everything else.
These costs come straight off the bottom line for companies involved in international trade, and for individuals investing abroad it impacts the amount of capital in the market – which in turn reduces the compounding effect that investors count on.
“Listed companies involved in large forex transactions are able to secure better rates, but SMEs and individuals are left to bear the burden,” says Scherzer.
“We are able to slash the costs of forex in virtually all cases because we combine cutting edge technology with our economies of scale, and we pass those savings directly on to the customer.”
Future Forex’s mobile app, available on the Apple and Google Play app stores, offers clients a seamless and convenient solution to send or receive international payments.
“There’s a common misconception that when you deal with a third party forex provider like Future Forex you are being charged twice – once by the provider and again by the bank. However, there is no double-charging for forex, and we are completely transparent in our costs. There are no hidden fees, and the customer has total visibility of all charges, including the spread,” adds Scherzer.
Personalised service
Future Forex goes a step further by allocating a single point of contact to each client so there’s no need to spend hours on the phone trying to query transactions through a call centre or impersonal chat service.
“Our platform is easy to use, seamless and cost-effective. What puts us ahead of the competition in our opinion is that we allocate a dedicated account manager to each client so they receive personalised guidance at every step, from compliance assistance to tracking the status of their transactions.”
Transacting in forex can be tricky, particularly when it comes to selecting the right BOP (balance of payments) code required by the South African Reserve Bank (Sarb), for example. Future Forex’s dedicated forex team is on hand to guide clients through these regulatory steps so no mistakes are made.
An added benefit is that Future Forex ensures that clients are fully compliant with forex regulations monitored by the South African Revenue Service (Sars) and the Sarb. This includes Sarb approvals, APN numbers, and Approval of International Transfer (AIT) applications (required for individuals sending amounts larger than R1 million abroad), all of which are provided at no extra cost to the client.
Contact
Future Forex can be contacted via email or by phone at 021 518 0558. For more information go to Personal Forex or Business Forex.
Brought to you by Future Forex.
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