It’s long been known that small businesses, feeling often overlooked by their banks, have increasingly turned to fintechs for a variety of services. Now fintechs are looking at FX trading as another avenue by which to attract small businesses. Reuters reports that Revolut and TransferWise have signed up thousands of new small business customers, with the promise of a slicker, digital interface and better rates for making FX trades.
“Small businesses don’t get any better prices than consumers,” Stuart Gregory, head of TransferWise for Business, is quoted as saying. That goes to the heart of the frustration many small businesses have with financial institutions — that they are treated, more or less, like a general consumer, as opposed to the services mid-to-large size business clients receive.
“Fintechs that focus directly on FX services in the B2B cross-border payments space are uniquely positioned to cater to the business needs of today’s small business,” adds Iain McNicoll, VP, Regional Head – Americas, SMB at Payoneer. “Legacy banks are hamstrung by their complex matrix organization, which can deprioritize small businesses; in contrast, fintech brokers have an in-depth understanding of modern small business models, which results in a more intuitive payments platform, better service, and lower rates for customers.”
Whether start-ups can continue to take a significant bite out of the $7-trillion-a-year FX market will be interesting to track.