Exclusive: ‘For FX Sake’ – James Lynn and Craig Goulding, Currensea in “The Paytech Magazine”

Frustration at having to pay dearly for using their bank accounts abroad led Currensea’s founders James Lynn and Craig Goulding to launch their own ‘decoupled’ debit card – and (despite you know what) it’s flying!

In late 2017, old friends and colleagues James Lynn and Craig Goulding were chewing the fat over a few beers and found themselves bemoaning the onerous banking fees they were being charged after family holidays abroad.

Why, they asked, were their banks levying such draconian rates for purchases and ATM withdrawals while on foreign trips? And why should you need to manage a separate account or top up a prepaid card in order to avoid them?

Good question and the answer, they decided, was to create a paytech based on a Mastercard debit card that’s decoupled from a user’s bank but linked to their account. They launched Currensea in the UK earlier this year. Yup, that’s right, two months before the world of travel came to a grinding halt. So, the fact that the card has been successfully used in 115 countries already, despite a global pandemic, means there must have been some pretty big pent-up demand for such a solution: one that allows holders to spend money overseas with no foreign exchange purchase or transaction fees.

“After those beers in the pub, we spoke to our friends and it became obvious that this was a common problem, particularly among the over-35s,” says Goulding. “In this age group you’ve got pretty complicated lives, you’ve probably got a longstanding relationship with your high street bank and want to continue using them. You just don’t want to pay those fees.

“The need for ease of use, combined with the fact that banks were charging between three and four per cent of the [overseas] transaction, screamed pretty loudly that there was a gap for something new. We saw the problem and wanted to solve it.”

With Lynn and Goulding’s background in financial services, they knew that open banking was the key. This was not to be another foreign exchange (FX) card, or a facilitator to move money around. Instead, Currensea has delivered something they say is unique – the world’s first debit card that’s powered by open banking.

“There are challenger banks out there, there are prepaid cards out there, but they have one thing in common, which is that you do need to maintain that separate pot of cash, transfer money across, pre-pay, and all that is quite inconvenient,” says Lynn.

“We wanted something different; we wanted something really convenient, which offers value as well. Years ago, Travelex tried to do this with a product called the Supercard but it failed because open banking wasn’t around back then. We are in a position and have a model that allows us to pare back the complexity. Our clients simply log on to currensea.com, provide a little information and select their high street bank from the options provided. That navigates over to their internet banking, where they log in as normal. They don’t share any credentials with us, it’s entirely between them and the bank. The customer then gets prompted to give consent to connect Currensea up to their account, and that’s it. All done.

“By pressing that button they now own a debit card that they can use around the world, which is linked to their account but doesn’t have the same charges or fees.”

The pricing plan is, indeed, simple. For £2.50 per month or £25 per year, consumers benefit from an exchange rate that’s zero per cent above wholesale. In addition, they can withdraw up to £500 a month, fee-free from an ATM (one per cent after that). A subscription-free option gives customers an exchange rate 0.5 per cent over wholesale, with no ATM withdrawal fee up to £500 per month with two per cent charged thereafter.

Lynn and Goulding attribute much of the ability to provide keen rates to Currensea’s small and lean backend.

Goulding says: “We’ve done everything in the Cloud and tried to automate as much as possible, making everything self-healing so that we don’t have an army of people fixing things. We employ a small, tight team of developers who pulled this whole thing together – very good, smart, experienced guys. We’ve done all the integrations with all of the high street banks, all the FX integration, we’ve built artificial intelligence (AI) engines… basically built this whole thing with a handful of people.”

While the Currensea consumer debit card has already seen surprising success, given the challenges the startup has faced this year, the obvious implications of the COVID crisis have seen a shift in emphasis in recent months. There was already a demand from consumer customers for a business debit card but COVID, and the significant reduction in consumer travel, brought forward its arrival to November.

“The consumer card was fairly focussed on travel, but the SME offering we’ve launched is more focussed on goods and services abroad, which is a really big market,” says Goulding. “It sort of diversifies our risk.

“At its core, the business card connects to the underlying bank account of the SME. The vast majority of business current accounts in the UK are concentrated in the big four banks, so in spite of a lot of challengers, they still dominate. And it’s actually really hard to change bank accounts. So, again, our proposition means you get a Currensea card, link it to your bank account and just use it as you would your normal bank debit card, but eliminating all your FX costs.

“One of the beauties of this is that there is basically no process change, in terms of your accounting package integration. When you do a Currensea transaction, it just appears on your normal bank statement. So, because you’ve already got the integration between your bank and your accounting package, everything just happens seamlessly. To all intents and purposes, the SMEs are just changing the card number they are paying with.”

Groundswell of support

An interesting aspect of the Currensea model is the way in which it has been funded. A combination of private investors and crowdfunding via the Seedrs platform (three rounds) has meant the business is, by all accounts, on solid footing. But Goulding says it is the crowd-funding element that speaks to the ethos behind the company.

“The thing about crowdfunding is that you are able to offer small shares to a large number of people. And, because our offering was so good, we had an incredible amount of interest. Each one of those people, I think it was 700 or 800, didn’t just become investors, they became our ambassadors. We’ve got some great brand advocates now, who are really interested in our progress and updates – the kind of people who give you ideas and really want to contribute. It’s fantastic to be sharing our journey with them.”

Again, as with the ‘moan over a few beers at the Duke’s Head in Putney’, the inspiration for the SME business card can be sourced to first-hand experience.

“At Currensea, a lot of our costs are in US dollars, as that’s how we pay for all our infrastructure,” explains Goulding. “And it was very frustrating for us because we were using our normal bank debit card, and every month we were getting hit by these awful charges. It was almost physically painful! So we swapped our bank debit card for a Currensea card, and just updated the card number. We’ve basically saved three to four per cent of our technology costs, just by changing one card number.”

“Yeah, we were our own good case study,” laughs Lynn. “There are clearly alternatives – we could’ve tried to open up a second account, or some sort of prepaid product, but actually, it is such a hassle that we didn’t do it. So I can imagine, if we didn’t do it, then a lot of people would be in the same boat.

“Our business product came from our own need, pretty much like the need we had as individuals for the consumer card,” adds Lynn. “And, with all the pain and uncertainty around COVID and Brexit, if we can save small businesses more than three per cent on every single foreign exchange transaction they make using our card, then that can only be a good thing.”

This article was published in The Paytech Magazine #07, Page 49-50