Saving Money Abroad A new online peer-to-peer trading platform will allow customers to buy foreign currency, cutting out the middle man and putting a dent in the profits of large financial institutions which previously benefitted By Emma Inglis
Oliver Muller, CEO of Peer Dealer
he frustration of feeling ripped off by high street foreign exchange dealers, banks and brokers could soon be a thing of the past. Plans are underway to launch the world’s first peer-to-peer market place for foreign exchange – Peer Dealer – which will offer users a dealing platform free of the egregious spreads and commissions charged by middle men such as banks, brokers and high street dealers. “We want to remove banks and brokers from the equation and offer trading for free,” explains Oliver Muller, chief executive of Peer Dealer. “There will be no spreads, no fees and no commissions.” If successful, Peer Dealer promises to place a large dent in the profits reported by financial institutions as their commission, fees and spread profits from providing foreign exchange to the retail market go into free fall. In fact, Muller is keen to draw parallels with the music sharing platform, Napster, and mobile app car service, Uber - both of which took their respective industries by storm - by suggesting Peer Dealer could have a similarly disruptive impact on the financial industry. Whether you are a day trader seeking the tightest spreads and lowest cost for foreign exchange or simply someone needing foreign currency for a holiday or an asset purchase abroad, Peer Dealer holds the promise that soon anyone will be able to access the low cost and tight spreads enjoyed today only by an elite
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group of large financial institutions. Muller, an ex-currency dealer, believes banks and brokers today play a role that is surplus to requirements when it comes to foreign currency dealing: “The technology is now available for these services to be provided for free.” Technology can also offer other appealing aspects to the business of foreign exchange. Peer Dealer’s browser-based application will encourage users to upload photos, trading details and other information. This open platform will enable customers to see exactly who they are dealing with. “We aim to make things completely transparent,” says Muller. Of course, the key to Peer Dealer’s success will be to garner enough customers to provide a liquid and efficient market. The group has back-up provided by German bank Varengold who will provide extra liquidity at the start of launch. As volume grows, Varengold will step back. The business model being adopted by the new venture is to attract enough customers to start to offer paid-for, value-added services while also offering the platform to advertisers interested in a targeted demographic. If the market becomes large enough, the dealership is also contemplating a small subscription fee. For now, the focus is simply to attract users with the promise of zero cost, fees and commissions. Still in soft-launch phase, interest in Peer Dealer is high, with investors already on board.