The Malaysian Insider :: Features
The Malaysian Insider :: Features |
| Skype-type money swaps bad news for banks? Posted: 15 Feb 2014 10:00 PM PST Irked by high bank fees on international money transfers, two Estonian IT whizzes who helped engineer Skype and Paypal have hatched Transferwise, a global Internet platform coordinating currency swaps between individuals. "Hey, hidden fees. Your secret's out," taunts the site founded by Taavet Hinrikus, 32, and partner Kristo Kaarmann, 33. Transferwise has been giving banks a run for their money since its 2011 launch, even attracting applause from tycoon Richard Branson, who sings its praises as a low cost business tool for start-ups. "They are dramatically lowering the cost of transferring money overseas, by effectively matching people and companies in different countries who want the opposite currency," the Virgin billionaire said in a recent blog post. The marriage of IT ingenuity and financial savvy also garnered a prestigious 2013 World Summit Award (WSA), a United Nations-backed prize for outstanding web-based business innovations. Transferwise offers international money transfers for a fee of just one British pound (RM5.40) for all transfers under £200 and 0.5% for everything above – a tenth of what banks typically charge. At that price, business is booming with the company processing around £1 million per day. While European rules specify that euro to euro transfers must be free of charge, banks fees on international money transfers between currencies range between three and six percent with exchange rates that routinely favour banks. The new platform boasts customers from across Europe and is most popular in Britain, France and Spain, mostly among working or retired expats plus small and medium-sized businesses looking to cut operating costs. It's also eyeing expansion in Asia, Africa and the US, offering services for the Indian rupee, South African rand as well as US, Australian, Hong Kong and Singapore dollars. Co-founder, Hinrikus was Skype's director of strategy until 2008, where he joined as the first employee. Kaarmann worked as a consultant for banks with Deloitte and PricewaterhouseCoopers before setting up TransferWise. Cashing-in on algorithms The idea took shape when Hinrikus found himself living in London and spending in pounds, but earning euros at his job with Skype at its headquarters in his native Estonia. Kaarmann, meanwhile was earning pounds in London, but paying a mortgage for his home in the Estonian capital Tallinn in euros. "We found that we had the opposite currency requirements, so we started to exchange it among ourselves at the actual mid-market rate – that's the exchange rate you see in the papers, not the inflated rate you'll be offered by your bank," Hinrikus told AFP. "Soon we realised we had saved a fortune by not moving the money across borders and that perhaps it could be a big business idea. A few years later TransferWise was born," he added. A few algorithms later, they had come up with the programming to connect people with complementary currency needs. Hinrikus explains that a customer in Britain who wants to send money home to Estonia can put their pounds on a TransferWise account. The company then spots a customer in Estonia who wants to send an equivalent amount of money to the UK. Rather than actually sending the money across borders, TransferWise then simply pays it out to the desired recipient in each country, for the minimal fee. While concerns have been raised over the potential abuse of the system to launder money, TransferWise spokeswoman Huggins points out the service is certified by Britain's Financial Conduct Authority (FCA). "This means that the business is subject to the same rules as commercial banks in the UK," she explained. The half-dozen TransferWise investors read like a who's who of IT venture capitalists. PayPal founder and Facebook's first financier Peter Thiel is among them via his Valar Ventures company as is Xavier Niel, the founder of French communications provider Free. – AFP, February 16, 2014. |
| Still much to be done in post-Haiyan Philippines Posted: 15 Feb 2014 09:24 PM PST However, at a nearby cemetery, weeping individuals were placing flowers and teddy bears on the graves of their loved ones, their lives claimed by the devastating super typhoon Haiyan that had ripped through the town on November 8, 2013. "It was so touching. While we celebrated Christmas with joy and presents, those family members were crying. And, it was raining," said Malaysian Yew Hee Cheah, who was in Tacloban in the Philippines for about three months, from November 18 to January 25, to help manage logistical support and humanitarian aid for Unicef. Yew, 38, the administrative and finance officer for Unicef in Malaysia, was recounting his experience in the Philippines after Haiyan tore across the central islands on Nov 8, killing 6,200 people and leaving nearly 2,000 others missing. The super typhoon also destroyed or severely damaged 1.1 million houses, leaving more than four million people homeless. Yee said that Haiyan had left 124,000 children in the central Philippines to be dependent on donated attire and to study in makeshift tents that served as temporary classrooms. The tents were provided with school-in-a-box kits that contain stationery and basic teaching tools, he said. Unicef had established 1,244 temporary learning spaces or makeshift tents for children to have access to education, and 420,496 pre-school and school-age children were provided with learning materials and supplies, he said. "After 100 days since Haiyan hit, there remains a lot to be done, especially in terms of schools, sanitation, vaccination for children and clean water supply," he told Bernama. Yew said that generally the situation in the affected areas was improving and Unicef, with its partners, was doing its best to put the children's livelihood back to normal. He said some of the Tacloban schools reopened in January, but classrooms still leaked rain. Some schools had suffered structural damage due to the storm and Unicef had built tents at schools to serve as temporary classrooms. According to Unicef's Philippines Humanitarian Situation Report issued on February 7, a total of 925,626 people now had access to safe water through distribution of water kits, water treatment products, bladders and home-storage containers. The report said more than 78,000 children (of six to 59 months of age) were immunised against measles, 97,000 children under five were screened for malnutrition and 13,576 children were being reached with psycho-social support in 79 Unicef-supported 'child-friendly spaces' in the affected region. Meanwhile, the Unicef representative in Malaysia, Wivina Belmonte, said the people in Malaysia had generously donated US$933,173 (about RM3.08 million) for the Haiyan victims in the Philippines. "Thanks to the generous and rapid response of donors in Malaysia, and globally, Unicef and its partners in the Philippines have been able to provide quick and crucial frontline emergency relief," she said. – Bernama, February 16, 2014. |
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