6 ms·

"We always convert your money at the live rate: the rate on Google." But this is a lie - I checked. At time of writing, you claim 100k GBP is equal to 131390 U

by Youden 5y ago

"We always convert your money at the live rate: the rate on Google." But this is a lie - I checked. At time of writing, you claim 100k GBP is equal to 131390 USD, while Google claims it's 131620 USD, a difference of nearly $300! Even saying "the live rate" is a lie. There is no one "live rate" (and therefore no "the" live rate). The price depends on your liquidity providers. IBKR shows "the live rate". Revolut shows "the live rate". Wise shows "the live rate". Google shows "the live rate". Despite all of them showing "the live rate", all of them have subtly different prices because all of them are part of slightly different markets. Claiming otherwise is a lie. It'd be more honest to say "we pass on the prices from our partners without markup" or something like that. You should also make clear which rate you're talking about. The market has a spread, how do you handle it? Do you give clients the mid-price or do you just pass through the bid/ask? The "Learn more" next to the rate info doesn't actually tell me anything more as well. I'd expect it to show me a page with more detailed information about your liquidity and how you determine the price. The box I already saw at the top of the page isn't "more".

YetAnotherNick 5y ago
It would be fine if the other side transfer rate is the same. 0.18% difference between exchanges could happen.
- throwaway4good 5y ago
  0.18% difference for USD to GBP sounds like a lot.
  - MikeDelta 5y ago
    That is about 24 pips, if you can find that price difference on exchanges it'd be arbitraged for sure.
pkavanagh 5y ago
Hi and thanks for your interest! We use the interbank rate from global exchanges. Both being from fintech, we are aware that it is easy to mislead (and to be misled) in money transfer and its a reason why we built this product in the first place. We have worked hard not to have any middle-men that mark up rates in our liquidity provision, and are quite certain that our rates are fair and extremely competitive. I do think that the takeaway from your comment is that we could build out a part of our page that allows a customer to dig deeper to validate this themselves. We understand the sentiment as there is still a lot of mistrust given the opaque nature of the market, and we need customers to believe that we are truly 3 GBP to succeed. Our core thesis in building this product is that we will win with a fixed fee on larger transactions, given the variable fee nature of the current industry incumbents(either transparently disclosed, or embedded in the FX spread).
- hutzlibu 5y ago
  "I do think that the takeaway from your comment is that we could build out a part of our page that allows a customer to dig deeper to validate this themselves." Or you could remove or change this statement, if it is indeed misleading. (But I have not checked this personally). "We always convert your money at the live rate: the rate on Google." Trust is important and the right wording does matter a lot. So if people read this on your website and then check for themself on google and see it is wrong - well sure, expect people to not trust your service. My first question (with only reading your text here) would be: why and how are you cheaper than the competition? Right now my takeaway would be: because there are possible dark patterns and hidden fees like suboptimal conversion rates included.
  - adhoc_slime 5y ago
    I absolutely agree with you, unless their whole strategy hinges on the fact their prices match google (which their prices literally don't), just change the damned copy on the site. I think this is actually a good shakeup for Money Transfer, they don't even need to rely on putting Googles name in their marketing to sell the product as so many new startups seem to want to do as an appeal to authority or try to present more stability in their marketing.
    - wdaareg 5y ago
      We appreciate the critical feedback - keep it coming. It's good to talk about these topics in the open. We'll be sure to work on this to make sure there is clarity around this part of our offering.
- kasey_junk 5y ago
  What global exchanges? FX is all OTC.
  - wdaareg 5y ago
    Check out CBOE FX (https://fx.cboe.com/ https://fx.cboe.com/) and EBS (https://www.cmegroup.com/trading/market-tech-and-data-services/ebs/access-methods.html https://www.cmegroup.com/trading/market-tech-and-data-servic...). Settlement and trading of FX may often be OTC, but that doesn't mean there aren't exchanges or aggregated marketplaces.
raverbashing 5y ago
The important thing here is: the live rate is not the live rate It is the avg. of the "live rate for buy" and the "live rate for sell" This is what google shows But every provider has a spread. As tiny as it might be (Not to mention volatility, difference between exchanges, etc)
- mccorrinall 5y ago
  Google shows the last price which an asset was traded for.
  - blunte 5y ago
    On which exchange? And if an average of prices on different exchanges, which exchanges are included in the average? How do you know how Google is doing it?
    - mccorrinall 5y ago
      Morningstar for all currency pairs which are not BTC, ETH, LTC or BCash. https://www.google.com/googlefinance/disclaimer/ https://www.google.com/googlefinance/disclaimer/
ttoinou 5y ago
That's because the law of one price is purely theoretical and never applies in real life https://en.wikipedia.org/wiki/Law_of_one_price https://en.wikipedia.org/wiki/Law_of_one_price There is no such thing as a "live rate" or "market price"
- Youden 5y ago
  I'm not talking about the law of one price here, just the fact that the global currency exchange trade is decentralised. There's no one exchange that aggregates everything and can give you a single authoritative price. In other assets, like equities, there often is a single central exchange. If you want to buy CURI for example, it's only listed on NASDAQ, so the price on NASDAQ is The One True Price as far as a normal person is concerned. There's no such central exchange for currencies.
  - kasey_junk 5y ago
    It’s not even true (anymore) that CURI is only listed on NASDAQ. It’s traded at lots of venues but there is at least a benchmark bid/ask based on US securities law. In fx it’s the law of whoever has the most information because there is no benchmark market at all. It’s why fx pricing is so hard to do right.
    - wdaareg 5y ago
      Based on our experience speaking with a number of institutional players, including traders and banks, what we found is that the institutional rates are unbelievably efficient, but the situation immediately gets worse as you move away from these centers of liquidity. If you talk to 3rd party institutional FX providers, they'll immediately mark up rates because its how they make all of their money.
  - 323 5y ago
    What you say doesn't really apply to currencies, at least not to major ones. All currency exchanges track each other extremely closely, because it's extremely easy to arbitrage between them.
WinterMount223 5y ago
It’s not a lie. It’s that it’s more complex than can be expressed in simple terms. Getting overly technical can be counterproductive.
- Youden 5y ago
  Im assuming you're talking about "the live rate", since the Google claim is verified to be false. I'd agree with you if it were unavoidable but I don't think that's the case here. There's no need to make a statement that there's a single rate. For example: "we give you the best price we can find on the international market, without markup". It still states the goal without raising the falsehood of a single price.

by Youden 5y ago

YetAnotherNick 5y ago

It would be fine if the other side transfer rate is the same. 0.18% difference between exchanges could happen.

throwaway4good 5y ago
0.18% difference for USD to GBP sounds like a lot.
- MikeDelta 5y ago
  That is about 24 pips, if you can find that price difference on exchanges it'd be arbitraged for sure.

pkavanagh 5y ago

Hi and thanks for your interest! We use the interbank rate from global exchanges. Both being from fintech, we are aware that it is easy to mislead (and to be misled) in money transfer and its a reason why we built this product in the first place. We have worked hard not to have any middle-men that mark up rates in our liquidity provision, and are quite certain that our rates are fair and extremely competitive. I do think that the takeaway from your comment is that we could build out a part of our page that allows a customer to dig deeper to validate this themselves. We understand the sentiment as there is still a lot of mistrust given the opaque nature of the market, and we need customers to believe that we are truly 3 GBP to succeed. Our core thesis in building this product is that we will win with a fixed fee on larger transactions, given the variable fee nature of the current industry incumbents(either transparently disclosed, or embedded in the FX spread).

hutzlibu 5y ago
"I do think that the takeaway from your comment is that we could build out a part of our page that allows a customer to dig deeper to validate this themselves." Or you could remove or change this statement, if it is indeed misleading. (But I have not checked this personally). "We always convert your money at the live rate: the rate on Google." Trust is important and the right wording does matter a lot. So if people read this on your website and then check for themself on google and see it is wrong - well sure, expect people to not trust your service. My first question (with only reading your text here) would be: why and how are you cheaper than the competition? Right now my takeaway would be: because there are possible dark patterns and hidden fees like suboptimal conversion rates included.
- adhoc_slime 5y ago
  I absolutely agree with you, unless their whole strategy hinges on the fact their prices match google (which their prices literally don't), just change the damned copy on the site. I think this is actually a good shakeup for Money Transfer, they don't even need to rely on putting Googles name in their marketing to sell the product as so many new startups seem to want to do as an appeal to authority or try to present more stability in their marketing.
  - wdaareg 5y ago
    We appreciate the critical feedback - keep it coming. It's good to talk about these topics in the open. We'll be sure to work on this to make sure there is clarity around this part of our offering.
kasey_junk 5y ago
What global exchanges? FX is all OTC.
- wdaareg 5y ago
  Check out CBOE FX (https://fx.cboe.com/ https://fx.cboe.com/) and EBS (https://www.cmegroup.com/trading/market-tech-and-data-services/ebs/access-methods.html https://www.cmegroup.com/trading/market-tech-and-data-servic...). Settlement and trading of FX may often be OTC, but that doesn't mean there aren't exchanges or aggregated marketplaces.

raverbashing 5y ago

The important thing here is: the live rate is not the live rate It is the avg. of the "live rate for buy" and the "live rate for sell" This is what google shows But every provider has a spread. As tiny as it might be (Not to mention volatility, difference between exchanges, etc)

mccorrinall 5y ago
Google shows the last price which an asset was traded for.
- blunte 5y ago
  On which exchange? And if an average of prices on different exchanges, which exchanges are included in the average? How do you know how Google is doing it?
  - mccorrinall 5y ago
    Morningstar for all currency pairs which are not BTC, ETH, LTC or BCash. https://www.google.com/googlefinance/disclaimer/ https://www.google.com/googlefinance/disclaimer/

ttoinou 5y ago

That's because the law of one price is purely theoretical and never applies in real life https://en.wikipedia.org/wiki/Law_of_one_price https://en.wikipedia.org/wiki/Law_of_one_price There is no such thing as a "live rate" or "market price"

Youden 5y ago
I'm not talking about the law of one price here, just the fact that the global currency exchange trade is decentralised. There's no one exchange that aggregates everything and can give you a single authoritative price. In other assets, like equities, there often is a single central exchange. If you want to buy CURI for example, it's only listed on NASDAQ, so the price on NASDAQ is The One True Price as far as a normal person is concerned. There's no such central exchange for currencies.
- kasey_junk 5y ago
  It’s not even true (anymore) that CURI is only listed on NASDAQ. It’s traded at lots of venues but there is at least a benchmark bid/ask based on US securities law. In fx it’s the law of whoever has the most information because there is no benchmark market at all. It’s why fx pricing is so hard to do right.
  - wdaareg 5y ago
    Based on our experience speaking with a number of institutional players, including traders and banks, what we found is that the institutional rates are unbelievably efficient, but the situation immediately gets worse as you move away from these centers of liquidity. If you talk to 3rd party institutional FX providers, they'll immediately mark up rates because its how they make all of their money.
- 323 5y ago
  What you say doesn't really apply to currencies, at least not to major ones. All currency exchanges track each other extremely closely, because it's extremely easy to arbitrage between them.

WinterMount223 5y ago

It’s not a lie. It’s that it’s more complex than can be expressed in simple terms. Getting overly technical can be counterproductive.

Youden 5y ago
Im assuming you're talking about "the live rate", since the Google claim is verified to be false. I'd agree with you if it were unavoidable but I don't think that's the case here. There's no need to make a statement that there's a single rate. For example: "we give you the best price we can find on the international market, without markup". It still states the goal without raising the falsehood of a single price.