What can marketers learn from P2P Fintech FX?
Like most of the finance sector, the foreign exchange marketplace is under significant pressure from agile FinTech startups. By combining scalable technology and social networking functionalities, there is a new breed of providers springing up that cut out traditional banking intermediaries.
Learning from WeSwap model
Turning the traditional foreign exchange model on its head, WeSwap connects individuals across the world, through a common platform. Armed with a traditional payment card and an app (or the WeSwap website), members are able to trade currency direct.
For instance, James is travelling from London to Warsaw for a week-long holiday. He logs onto WeSwap a week before his flight leaves and arranges to swap £500 GBP into the Polish Zloty equivalent.
At the same time, Agnieszka is travelling from Wroclaw to visit family working in London. She uses WeSwap to exchange 2200 PLN into pounds sterling ready for her arrival in the UK.
The WeSwap platform then automatically links Agnieszka and James, arranging the necessary transfer from bank accounts to perform the necessary currency exchange. When they arrive at their respective destinations, both will be able to spend in the local currency using their WeSwap debit card.
By avoiding traditional foreign exchange platforms and connecting individuals, WeSwap’s conversion costs are much lower, ensuring their users get more currency for their money.
The question of fees
Travellers and holidaymakers have got used to banks offering a “0% commission” rate for foreign exchange transactions. But in order to make a profit, the bank needs to adjust the actual conversion rate, giving buyers less currency for their money.
WeSwap takes what might be seen as a backward step, charging a commission for each transaction. However, the actual conversion rate offered by WeSwap is geared in the buyer’s favour. Were James to buy his Zloty from Lloyds Bank at 0% commission, he would get 5.13 PLN to the pound; even with 1% commission, WeSwap will give James 5.60 PLN.
What does this have to do with marketers?
Although WeSwap (and other FinTech FX providers) are clearly biased in favour of the buyer, the headline 0% commission rate from traditional providers is powerfully attractive to consumers. P2P FX exchanges face an uphill battle then, as consumers have been trained to assume that commission is more expensive.
But clearly WeSwap, Revolut and others are doing something right. P2P foreign exchange leads the way in the FinTech sector – at least for consumers.
As you would expect, FinTech marketers play down the commission angle, instead focusing on the ease with which people can get hold of foreign currency. The automated transfer of funds to a universally accepted debit card saves service users the hassle of visiting banks to place orders and collect currency.
Once the customer has been sold on the time-saving benefits of a currency exchange service, marketers can then begin discussing potential cost-savings. Once all of the benefits have been explained and understood, marketers can finally move onto the thorny issue of commission fees.
Mirroring the inbound marketing process
This gradual progression closely follows the inbound marketing cycle. At the ‘learn’ stage, when consumers are still shopping around for foreign currency options, they are introduced to the simplicity of buying from home using a P2P FX app. This may be through a paid display ad, a blog post, or an article posted on a site visited by your target audience.
Applicable to all foreign exchange FinTech start-ups
Regardless of exactly how your foreign exchange FinTech start-up works, the same inbound marketing cycle can be used. Working with a skilled inbound marketing agency like Bias Digital, we can help you identify the right content for your prospects and the right time at which to present it to them.
Get in touch today and let us show you how to build an inbound marketing cycle that can change mindsets and boost sales. Because if We Share can do it, so can you.