Currency exchange marketplace helps increase SME profit margins

Shrewd British SMEs are optimising turnover by around 5% by avoiding bank charges and unfavourable exchange rates, according to customers of CurrencyFair - the world's first ever peer to peer online foreign exchange marketplace.

With nearly 50% of UK exporters citing fluctuating exchange rates and foreign currency as their most common challenges the advantages of this revolutionary system are clear, especially given the increasingly global outlook for many SMEs.

CurrencyFair enables business customers to find a better deal through individual buyers and sellers of currency rather than the Banks and provides SMEs with access to rates which were historically only available to the big corporates.

One SME which has experienced significant savings through CurrencyFair is Optimal Photochromic, which buys and sells materials for spectacle lenses. Operating across four continents, the London-based company estimates to have saved around £10,000 in bank fees and exchange rates over the last year.

Dan Hancu, Managing Director of Optimal Photochromic, said: “Given that our turnover last year was £250,000, this represents a serious saving for us. Our suppliers based in China, Brazil, Mexico and South Africa routinely set their prices in US dollars or Euros so we have to sell on in the same currency in order not to lose out.”

Brett Meyers, CurrencyFair founder said: “Since we launched in May 2010 we have saved our customers more than £1 million when comparing their rates against typical bank exchange rates. Just like Betfair and eBay we’re changing the way people are able to do business by bringing them together in their own marketplace.

“This finally gives business customers a viable alternative to the traditional banking model. Only last week Business Secretary, Vince Cable, described competition as the ‘best antidote’ to the current culture in the UK banking system and we’re certainly providing that.”

CurrencyFair’s business customers are able to exchange currency instantaneously with others, or place their own trade on the marketplace and wait to see if someone matches the rate. This unique business model enables CurrencyFair to offer compelling value for business customers.

“Banks and brokers usually require telephone or branch orders and will price discriminate,” added Brett. “Our customers are exchanging at rates which are usually only available to multinationals and money market professionals dealing in millions. In some cases our customers have even been getting a better rate than the Interbank midpoint.”

Philip King, Chief Executive of the Institute of Credit Management, said: “In challenging conditions, small businesses need to be constantly reviewing credit management products and services – whether from public bodies or private businesses – that can help them manage their cashflow better, and as such anything that may help improve an SME's position should we welcomed in the current climate."

For more information, visit currencyfair.com.