Money is a pretty simple concept when you look at it from a distance. It’s a representation of value. Rather than having to barter and trade one thing for another thing, like in olden times, you can your thing for a small, portable representation of its value. Money itself, the physical bills and coins we carry in our pockets, are just stand-ins for ideas. With the rise of Bitcoins and other digital currencies, the physical attributes of money are starting to fade in importance. Borders, boundaries, and billfolds are no longer the strictures that determine currency’s worth, at least in the world of tech. But in the world of nations, physical currencies are alive and well. But they’re more fluid than ever before, thanks in no small part to the currency transfer industry.
If you don’t travel much, or you are from the United States, you likely haven’t thought much about foreign currency transfer. That’s because more people move to the United States than move out of it. The US is also a single country. In other continents, nations are smaller, with more unique languages and money systems found just miles from one another. That’s why the ability to trade money quickly and reliably has been innovated and improved in England, not the United States.
America’s two most famous currency transfer services are Western Union and Moneygram. They’re also the most hated companies in the entire industry, using antiquated models to move money around in a very unreliable fashion. But there’s a whole new breed of companies, mostly from the UK, that allows users to transfer money internationally much faster and with far lower fees than have ever been available in the US market. This is by necessity, because in the UK people at every wealth level need to transfer money to other countries.
These people may be poor immigrants, who are working in the UK but need to send money home, a process known as remittance. The World Bank estimates that this form of currency transfer alone moves more than $500 billion around the globe every year. Wealthier individuals are sending children to Universities in other nations and need to get the tuition paid without losing hundreds of pounds in transfer costs. Others are buying property or making other investments overseas. At the highest level, government treasury clients are making financial exchanges on an enormous scale, and need to take advantage of the same new currency transfer companies that have popped up during the past decade.
How the FCA regulates currency and forex brokers has managed to promote further innovation, a phenomena that has not been replicated in the United States. Perhaps this is because the US is concerned about securing its borders, not making them more permeable through promotion of the easy change of currency. But other companies around the world are doing it in the US’s stead. Further competition will improve exchange rates and lower fees, even on the smallest transfers. Independent companies like these are already able to drastically undercut bank exchange rates.
The end result is that everything from national borders to international banking systems to the integrity of long-held currencies are all being softened. It is easy to imagine a one-world currency being adopted within the next generation or two, if Bitcoin isn’t the de facto representative of this concept already. Whatever the case, currency transfer innovation is changing the world, and it will be perhaps the fastest driver of wealth movement on an international scale in the coming years.