As the world鈥檚 first underground passenger railway,听London鈥檚 Tube network was once the听envy听of the world.听
These days it is noisy, overcrowded 鈥� or was, pre-COVID-19 鈥� and frequently breaks down. Anyone who has听used听certain underground networks in other cities,听such as听in parts of听Asia, will acknowledge that the experience there听bears听little resemblance to the UK capital.听
There are,听according to听Currensea听co-founder James Lynn,听parallels听to be found with technology platforms.听
鈥泪f you want to go from 5,000 to 10,000, 20,000, 100,000 then 200,000 users, you can’t keep patching over things with 鈥�sellotape听and听paper鈥�,鈥� he tells听老九品茶Cloud. 鈥泪f you do,听you just do not have a scalable path.听听
鈥淎nyone who’s not building听their platform听for the future is just creating a debt for themselves, which听is going to get really,听really painful听when they begin to scale.听听
鈥�It’s like the London Underground:听we all see how expensive that is to fix, because it’s got things running through it, it’s very slow.听It听breaks down听frequently.听听
鈥�[Similarly,] once you’ve got lots of flow going through听a platform, it becomes harder and harder to tweak things and fix things if you haven’t built it right in the first place.听听
鈥�The Singapore train network runs unbelievably smoothly听鈥� it is always on time,听very slick. And London’s very different.鈥�听
Founded in 2018听by听Lynn (pictured, left) and Craig Golding (right), launched its听consumer听overseas payments card听in January of this year.听Impressively, it听has been听used in more than 120 countries despite severe limitations on international travel due to COVID-19.听
鈥�奥别鈥檝别听been able to take on customers incredibly quickly听because he built for the future from the start,鈥� continues Lynn.听
鈥�We听built the听whole platform from the ground up to be as automated as possible,听so COVID hasn’t really changed our approach at all.听听
鈥淯ltimately, the way to scale a business is through technology:听people are expensive, and people don’t scale; but people听can add real value elsewhere.鈥�听
The concept was born in 2017, when Lynn and Goulding caught up over a drink after听returning听from respective family summer holidays.听鈥淲e were both moaning like hell about our bank statements, just in terms of the fees we’d incurred,鈥� recounts Lynn.听
As experienced technologists working within banks including JP Morgan, Barclays and Lloyds, they听felt they could build a better service for consumers.听鈥泪n Italy [on another occasion] I鈥檇 had a pre-paid card declined in a restaurant because there was no money on it,鈥� he adds.听听
鈥淣either of us were that excited by any product we’d听tested,听whether it was a challenger bank or pre-pay.听They all had the same听difficulty,听which was having to pre-pay, top up, keep track of a separate balance, figure out what to do with the money on there when we got back home 鈥� it was just a lot of hassle.听
鈥淲e put our heads together and听thought:听what we really want is a debit card works with our existing bank account but loses the fees.听
鈥泪t was a combination of open banking and our knowledge around payments FX that enabled this.鈥�听
A debit card which connects directly to your existing bank account, it does away with foreign exchange charges 鈥� the average bank charges 3.25% 鈥� and includes a zero ATM withdrawal fee up to 拢500/month.听
Like digital bank Starling, the start-up is targeting an older demographic of customers. 鈥�Millennials听are听well–served听by the likes of听Revolut, Monzo听and Starling,鈥� Lynn admits.听鈥淭hat demographic听is听happier听to jump through hoops听and听have lots of accounts.听
“People听aged听34–plus do 73% of trips abroad.听Yet听the penetration in that demographic of challenger banks and pre–paid cards is really limited;听and outside London, it听falls off a cliff.听We’re pushing on quite an open door there.听听
鈥淧eople don’t听want听to switch their bank account: they’ve got too much of a vested interest in the security of their own bank听to take听their听salary payments or savings and move them into a challenger bank.听听
鈥�It’s听high risk, so听it doesn’t happen that often. The perceived inconvenience versus a perceived benefit is relatively limited.听
鈥�We found that if we can offer that demographic and听really easy听solution, where we can give them incredible rates, then it goes down well.听We鈥檝e focused on that demographic听very, very tightly.鈥�听听
With听80% of SaaS products now听dollar-based,听Currensea听is turning its attention to the business market. The London FinTech, which featured third on our 100 FinTech Disrupters ranking for 2020, has recently released a debit Mastercard for SMEs.听
Completely free, it allows businesses to pay for services in dollars without incurring fees.听听
鈥�There was a demand from the听non–travel听market for buying goods and services abroad.听Huge numbers of start-ups and SMEs use听Amazon Web Services,听for听example,听or US-based CRM tools,鈥� says Lynn.听听
“There is a听huge potential market on that听for us.听We think the sweet spot on the card side is probably under听拢10,000 in terms of spend…听over that, people will still do money transfer.听
鈥�For SMEs,听opening up听a new bank account or switching is incredibly hard. We’re a case in point: we have been paying听a fortune in fees for services from abroad听for goodness knows听how听long. We’ve done that because it’s so much hassle to听find听an alternative solution.听听
鈥泪f we wanted to听open up听a second account, I’d have to keep shovelling money across there all the time;听keep track of how much money was in there;听hook that separate account up to our accounting platform Xero;听and听keep telling our accountant what all these transfers I keep making听are听for.听It’s听really painful.听
鈥�All we’re saying听is:听change the card number you use.鈥�