Financial Technology Startups Makes U.K. – Ireland Trade Easier

The United Kingdom and the Republic of Ireland share strong cultural and economic ties. To the surprise of many people outside of Europe, the two are sovereign countries, separated by a 499 km (310 mile) long border. Citizens of each country enjoy a special status in the other that extends way beyond what is given to European Union members.

The United Kingdom uses the British pound sterling while Ireland calls the euro its local currency. This implies hundreds of millions of euros and pounds are unnecessarily erased from entrepreneurs from currency fluctuations and exorbitant bank fees.

Thankfully, entrepreneurs on each side of the border can save money through UK-based Currencies Direct.

Key Statistics

The United Kingdom exported £35.1 billion (39.2 billion euro) worth of goods and services to Ireland in 2018. During the same period, the United Kingdom imported £21.6 billion (24.12 billion euro) worth of goods from Ireland.

Ireland was the UK’s fifth-largest export market and the tenth-largest source of imports. Trade between the two supports thousands of jobs and it is in everyone’s economic interest to expand trade and make it more efficient for all.

Main Hindrance To Trade

Tens of billions of euros flow through each side of the border each year, as do tens of billions of pounds. High-street banks are notorious for offering poor rates on top of a fixed fee. Sure, the convenience factor of working with a mega-banks has some advantages but many entrepreneurs would gladly exchange the benefits for more cash in their pockets.

For these entrepreneurs, all that is needed is to leave their bank and embrace financial technology (fintech) startups to handle their foreign exchange needs.

And there are many new technology-first focused companies entering the scene.

Perhaps the most recent of which to make a name for themselves is a London-based fintech startup called Ebury. The company secured in late 2019 £350 million (about €400 million) worth of financing.

Ebury provides multiple foreign exchange-related services, including making and receiving foreign currency payments, finance imports, and perhaps most important, hedge against currency risk.

Winning Through Superior Rates

It may not seem like a lot at first glance, but reducing foreign exchange fees by half a point can make a large difference. This is especially true for companies that operate with already thin margins and no room for error.

It’s worth repeating that banks aren’t known to build their business models on the notion of saving people money. On the other hand, this is where tech startups excel. Consider Currencies Direct as an example. The money exchange platform offers a plethora of tech-first innovative ideas to help users save money.

For example, a user can define the price they want to conduct an exchange and the platform will automatically fulfil the order, day or night. The platform can also automatically convert currencies when the account balance reaches a certain level or as soon as new funds come into the account.

Did You Know Tech-Focused Companies Can Do This?

Businesses on either side of the border can lose a lot of money in a very short time due to currency fluctuations. Most notably, the pound lost 10% immediately following the Brexit vote.  Entrepreneurs who found themselves on the losing side of the pound’s post-Brexit decline could have protected themselves through forward contracts.

Ebury is one of multiple fintech and money exchange platforms that offer a vital service for businesses and individuals to protect themselves against exchange rate fluctuations.

The way a forward contract works is quite simple. A business or individual enters into an agreement with a counterparty to buy or sell a fixed amount of a currency at a fixed exchange rate established today.

Unfortunately, many people are unaware such a service exists in the first place. After all, it sounds difficult to understand how a financial product protects against unfavourable currency swings, be it 1%, 5%, or even 20%.

Of course, a forward contract comes with one important caveat. If the individual or business is on the winning side of the currency move, they won’t be able to benefit. But for the vast majority of entrepreneurs, this is a reasonable proposition.

After all, an exporter of Irish crackers to the United Kingdom has no interest in taking on a part-time side job as a currency speculator.

Granted, there won’t be another swift and unexpected move in the pound. But who is to say a 10% decline in the currency won’t take place over a six-month or one-year period? No one can predict with 100% certainty what will happen in the future — especially the world’s best hedge fund traders.

The Bottom Line: Get With The Times

The era of relying on high-street banks is losing appeal as each day passes. The younger and more tech-savvy entrepreneurs are experts at selecting the best technological tools that will save their business money.

This isn’t to say that money saving solutions can’t be used by anyone. Quite the contrary, it can. For some, it may be a daunting journey by breaking with decades of tradition.

The sooner that individuals and businesses part with the old, the sooner they can save money. Perhaps the extra savings can be allocated to specific projects that were scrapped due to budget constraints.

All that is needed is to make a simple switch. Some online money exchange firms offer a helping hand over the phone.

It’s time to start doing what’s best for yourself and your business and save money today. It’s never too late to start.