For us nerds who habitually keep abreast of “Breaking Fintech News!” it feels like 2021 is a big year for money transfer services rebranding, re-naming if not outright re-inventing themselves. First, Transferwise became Wise (reflecting its expansion into non-transfer related services) and now Foreign Currency Direct has relaunched itself as “Lumon Pay”.
Primarily, this was to avoid confusion with other similar named services such as Currencies Direct. However, as with the ‘Wise’ rebrand, it may also signal that Lumon Pay intends to expand into other pay related service areas in the future such as debit cards and pay apps – let’s wait and see.
Besides, whilst Foreign Currency Direct was a perfectly to the point (almost onomatopoeic) name, any marketing guru will tell you it wasn’t exactly sexy and lacked some panache. ‘Lumon’ on the other hand, is adopted from the Latin root of the word for light suggesting clarity of vision. Besides that, Lumon Pay will look a whole lot better printed on a debit card, if they do go down that route.
The re-brand comes hot on the heels of the acquisitions of Infinity International and Earthport FX – customers of both of these entities are now also being brought under the LumonPay (or LPL) umbrella. The new Lumon Pay entity itself is a part of the Pollen Street Capital portfolio and its client base now numbers in excess of 53,000, catering to both private and business users.
Why Use a Foreign Currency Service?
Just two decades ago, your options for sending money overseas were pretty much limited to using your bank, using Western Union or sending cash in the post and hoping for the best. However, the last 10 years in particular has seen an explosion of Fin-Tech Startups offering fast and cheap money transfers across the globe.
This trend reflects the global economy we now find ourselves in. The internet has opened up the world and more and more of us are transacting or doing business internationally. Whether you are a Digital Nomad based in New York billing clients in Delhi, or an EU migrant sending money back to your family, international and cross currency payments are bigger business than ever.
If you simply rely on your bank to handle currency transfers, then this can prove very costly. Firstly, banks will always offer account holders a less favourable currency exchange rate than the one they apply between themselves. Then, a bank will always levy a charge for handling international, cross currency payments which can either be a flat fee or a percentage.
It gets worse, not only will your bank levy this fee, but the recipient’s bank will too, meaning you will get charged at least twice on any monies you send. Furthermore if the monies need to go through a 3rd party intermediary bank (which happens when 2 banks don’t have a direct relationship) then they will also apply a fee.
All too often, bank customers sending or receiving money internationally are left confused and bitterly disappointed to find out that they received far less money than they were expecting. Unfortunately, it sometimes feels like the traditional international transfer system was deliberately designed to confuse customers out of dimes and dollars. The whole process is murky and is anything but clear and transparent – this is why challengers such as Lumon Pay, are now casting some much needed daylight into the dark vault.
Money Transfer Services on the other hand operate differently. Firstly, they compete to offer the best possible currency exchange rates and then they charge one single lower, fixed fee so you know exactly what is being sent and what will be received on the other end. They also tend to be very fast. Whereas banks could take up to 5 days to move your money from Dubai to Dubin, the new kids on the block usually do it in a matter of hours.
The international currency transfer space is very competitive right now. So far the sector has thrived and providers like Wise, Payoneer and now Lumon Pay are going from strength to strength. But there is always room for improvement and in the fast moving FinTech sector, it really is a case of innovate or die.
Re-Introducing, Lumon Pay!
Of the re-brand the Chief Executive Officer at Lumon, Shamus Hodgson, said:
“The overseas payments industry is rapidly evolving and yet we believe it’s crying out for reinvention. Through a period of economic market volatility and rapid development of digital first offers, we’ve always had our customers’ end goals in mind.”
Whether you are sending money from the UK to the UAE, or turning Dollars into Dinah, the money transfer sector is making international transfers, payments and currency exchanges easier, faster and cheaper than ever.