Azimo today said it had become the first player to allow users to “swiftly, securely and cheaply send money around the world” using social media.
Facebook users can transfer money via the social network for the first time from today.
Azimo said it had become the first player to allow users to “swiftly, securely and cheaply send money around the world” using social media.
azimIts app will allow the transfer of funds between bank accounts and allow transfers between more than 125 countries.
The development chould help increase competition and reduce costs for overseas transfers, which can be costly if made through a high street bank.
“Unlike other areas of financial services, social media is very applicable to remittances,” said Michael Kent, founder of Azimo. “With more than a billion people around the world using Facebook to keep in touch with friends and family, it seems only natural it should become a channel for sending money.”
“We surveyed our UK remittance customers and found nearly three quarters regularly use Facebook – and of those, over 60% were in touch with the person they wanted to send money to.
Azimo, which launched last August offering an online payments platform, said it would focus on international money transfers and the “remittance payments market” – migrant workers who send money back to their families.
It said this was a global market worth $534bn but was dominated by international players such as Western Union and MoneyGram which levied “double-digit charges for a service that amounts to little more than a few clicks of a computer mouse”.
Azimo charges a flat fee of £5 to transfer up to £500 and 1 per cent commission, up to £15, for any larger sums. It said it plans to give 10 per cent of its profits to charity.
Mr Kent added: “In 2011 alone, using Azimo would have saved people in the UK a collective £200m.”
Other cheap ways to send money abroad
By Rosie Murrary-West
Charges on the high street are sky-high. HSBC, which calls itself “the world’s local bank”, charges customers up to £30 to send money from their own HSBC account to someone else’s in another country. Similarly, Spanish-owned Santander does not discount rates for customers who send money to its own overseas branches.
The vast majority of people use bank transfers when sending money to an account abroad. However, it is nearly always cheaper to use a currency broker or other specialist service.
Overseas transfers have become more popular as owners of second homes rent out holiday property abroad directly via the internet, and families living elsewhere in the world send money worldwide.
A recent report showed that the average transfer fee was £17. More than a third of people regularly pay £20 or more, while one in 20 pays more than £40. The research, carried out for Travelex, the foreign exchange firm, found that £150m was spent every year on fees and charges for sending money abroad. Britons with second homes were among the worst affected.
Specialist are generally cheaper than offers on the high street. The Post Office offers a service that will allow you to transfer cash in 19 currencies, and the money will arrive in one to three days. This is fee-free and the exchange rate is generally competitive. The Post Office’s international payments service is run by broker HiFX, which is fully authorised by the Financial Services Authority (FSA). However, the minimum you can transfer is £250.
Smaller amounts can be sent instantly using PayPal. It charges a 2.5pc fee, while the recipient pays a “cross border transaction fee”. The recipient will pay up to 4.9pc plus 20p.
A system called TransferWise may be another way of sending money more cheaply. This allows you to deposit cash in a UK bank account via internet banking, and within two days the company will convert and send the currency to the recipient.
A calculator on transferwise.com compares prices against other ways of transferring money. Currencies include euros, US dollars and Norwegian, Danish and Swedish kroner. The exchange rate may not be as good as at some other brokers, but for small amounts of currency it is good value because of the low fees – just £1 on transfers of up to £300 and around 0.5pc above that.
TransferWise, which is FSA authorised, works cheaply because it is a peer-to-peer service. Cash put in a UK account never actually leaves the country. Instead, the money is paid from reserves in the country you are sending the money to – meaning you get a better rate.