If you’re regularly moving money between here and Australia or the Pacific Islands, or have customers there, you’ll know all about expense and frustration. Bank charges and exchange rate fluctuations can add 10 or even 20% to the cost of a transaction.
KlickEx (www.klickex.com) aims to change all that. It allows people and businesses to exchange currencies without transfer fees. Users bid the rate they want to exchange their currency at. Once an exchange occurs the money is instantly available in the other country, without the delay of waiting for banks to transfer funds. The exchanges are fast, easy to use, secure, and only cleared funds are used.
For SMEs, KlickEx adds protection from volatile exchange rates. "Our system is much faster,” says KlickEx Director Robert Bell. "It talks literally bank account to bank account at each end, and we don’t run any of that foreign exchange risk. You always get the market rate, and this helps your cash flow but also dissipates your risk. SMEs benefit from this because they can’t insulate themselves from those fees the way the bigger companies do because of the size of their transactions.”
KlickEx offers a cheaper and quicker alternative for people based in Australia, Samoa or Tonga to buy New Zealand currency (or vice versa), and for small businesses to trade in those countries. Credit cards, telegraphic transfers, and online payment services like PayPal all attract significant fees. Merchants can load KlickEx onto their website, and it will accept payments for goods and services.
KlickEx earns money from exploiting the ‘micro spread’ – the small fluctuations in currency trading. A few cents here, a few cents there: it all adds up.
For now, KlickEx works only in the New Zealand, Australian, Samoan and Tongan currencies, having impressed the banks in those countries that its web-based service is reliable and secure. The pound, the euro and the greenback are its next targets, although it has significant regulatory issues to work through in order to achieve those goals.
"Our little home domain here is a fantastic lab for currency exchange,” says KlickEx CEO Ross Peat. "We are 80% of the way down the track in terms of reaching out to any currency at this stage.”