High street banks are being threatened by leaner fintech companies with better technology that provide a better service at a lower cost. At least we’ve heard that statement many times over the past few years.

Let’s see how that translates into a real life example.

Let’s say we need to convert $100,000 into euros. We’ll pitch a typical high street bank against two well-known currency conversion services: Currencyfair and Transferwise.

I picked two Maltese banks, HSBC and BOV. Here are their advertised rates:

Having checked all the rates, let’s have a look at the final results.

Here’s what each Maltese bank will give us in return for our USD:

• BOV: €87,734
• HSBC: €87,039

Amazingly, between the two leading banks in Malta, we see a difference of €700 for the same simple service. Pretty bewildering if you ask me. I believe that both banks also charge a fee, although I was unable to locate the pricing for currency conversions on their website.

Let’s move on to the fintechs:

• Currencyfair: €88,837
• Transferwise: €88,925

Note that Currencyfair improves on the BOV’s rate by €1,100, and Transferwise by €1,200. You must also keep in mind that I’ve seen banks that provide much worse conversion rates and extra fees for conversion. Even so, the differences between the fintechs and the Maltese banks are pretty impressive, and I, therefore, see it as a no-brainer to go for either Transferwise or Currencyfair for currency conversions.

Bonus: A Clever Hack using the Mintos platform

If I were to suggest an even better move, I would skip all the banks and currency conversion services and use Mintos for my currency conversion needs. Mintos is currently the best European P2P lending platform and I’ve been obtaining upwards of 10% returns per year on my investments there.

You might be wondering what all this has to do with our currency conversion case study.

The thing is, Mintos launched a foreign exchange service on their own platform. You can, therefore, deposit those $100,000 and convert them to euros there. At the time of writing, the rate employed by Mintos for USD to EUR conversions was 0.892818. They also charge a 0.7% fee.

• Mintos: €88,581

That’s by far better than the banks’ rates, and slightly worse than Transferwise and Currencyfair. However, once your money is on Mintos, why not invest it there? If you don’t want to park your money there as an investment for a long time, just let your money work for you for just one month, then use the secondary market to sell your loans. The secondary market on Mintos is highly liquid, just as an example I know an investor who sold $1m on the Mintos secondary market in just one day recently.

Keeping an average return rate of 10%, which is easily achieved at the moment on Mintos, after parking our newly converted USD to EUR on the platform for a month, we would be able to withdraw the following:

• Converted currency €88,581 + Returns of 1 month circa €885 = €89,466

That’s the best result of this currency conversion experiment. You could also keep some money invested if you like Mintos and withdraw the rest, or keep the whole amount invested and gain around €8-10,000 per year at the current interest rates.

What’s your take? Let me know in the comments section.

There comes a time when you need to sell your baby, I am referring to your website/s of course…

So in such a time, what do you do, where do you begin? Here are the sites I recommend you visit. This also applies to when you’ve got some cash on hand and want to make an investment in an existing website, rather than building something from scratch.

QuietLightbrokerage

This broker specializes in sites valued at 60k to 5 million USD. They provide an excellent guide on calculating the value of your website.

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With the growing trend of digital nomadism together with location independent workplaces, championed by companies like Automattic and Basecamp, we are seeing an increasing number of company owners having the luxury of choosing a country to be tax resident in and also deciding which country to base their company in.

Tax laws tend to change quite frequently, as do the relations between countries. For example, the big countries tend to have a black list of countries they consider tax havens, and of course you don’t want to base yourself or your company there. I believe the European Union currently provides the best flexibility with moving around and building an efficient tax strategy.

No EU country can blacklist another country, so you have the security of countries playing nicely. You would perhaps be surprised to know that within the EU tax rates vary between countries in a very significant way.

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