Typically, banks and money changers require a
fee for their services.
It is also up to them to decide the rate the money is
exchanged.
All this could now change with a new platform called
Marco Polee.
Co-founder of the start-up, Mr Reuben So, 29, became
frustrated with how money is exchanged and wanted to give others an
alternative.
During a recent trip to Hungary, the Australian said he
spent 30 per cent of what he had on money changers alone.
He told The New Paper: "The exchange rates (at the
money changer for Hungary's forint) were absolutely ridiculous...
But I had no choice, and it really hurt me."
This is not unusual for travellers: A simple act of
changing currency can end up costing a lot.
Mr Ecko Tam, 28, a Hong Kong citizen who co-founded
Marco Polee with Mr So in 2013, told TNP: "We currently don't make
any money. We are focused on solving an unchallenged foreign
exchange market and providing our users with a better option to
save money."
Because the system, which was fully fleshed out and
available for use in September last year, is a peer-to-peer
exchange, the co-founders and their team are not taking any fees
from the transactions.
This is unlike other peer-to-peer currency exchange
platforms, such as TransferWise and CurrencyFair, that require fees
or commissions for their services.
Marco Polee works much like typical online marketplace
apps, such as Carousell and Trezo.
First, you put a listing on the website with the
currency you are exchanging and the amount.
The live currency updating system taken from Open
Exchange Rates, an external paid service, will convert the rates
accordingly.
The rates are updated hourly with an option to lock the
exchange rate to the time you keyed in your amount.
Once that is done, you wait for someone to accept your
exchange. Amounts exchanged can be negotiated.
Once all is agreed, you will exchange the money face to
face at a convenient time and place.
The average amount of money exchanged so far is $650,
and there is an average of 50 listings created weekly. There is no
cap on how much is exchanged.
So far, the most exchanged currencies on Marco Polee
are the Singapore dollar, the Indonesian rupiah and the Thai
baht.
Users must verify their social media or e-mail contacts
before being able to list an exchange and those who are exchanging
will also need to verify their mobile number. Mr So said this acts
as their security check.
Lawyer Ravinderpal Singh, 46, told TNP that on the face
of it, what the founders of Marco Polee are doing is legal.He said:
"If they earn a commission from the exchange, they may have to
apply for a registration. But it only brings people together and
the founders are not making any money."
Another lawyer, Mr James Ow Yong, 29, said: "The site
does not appear to engage in the buying or selling of foreign
currency, nor does it charge a fee or commission from these
transactions."
Because of this, he said that it does not fall under
the definition of "money-changing business" for the purposes of the
Money-changing and Remittance Businesses Act, which would require a
licence.
When asked, Mr Tam told TNP: "We have actually checked
this against the Singapore regulations and laws before we launched
it into Singapore.
"As a platform, we never touch any form or cash or
money and we don't profit from this platform, so it doesn't not
fall under the standard foreign exchange currency regulations."
These men believe in the start-up so much that they
have contributed about $30,000 of their own money towards it.
Mr So said that although the exchange service will
always remain free, they plan on earning money from Marco Polee
through means such as special listings. These include group
exchanges where two or three people exchange cash among one
another.
These plans are still in the pipeline, but Mr Yong said
that if listing or transaction fees are charged, the site may then
be required to be licensed.
For now, the service is only available on
marcopolee.com, but its founders are working on an app for it this
year.
They are also looking to expand into other countries
soon.
TNP