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How to find the best rate when sending money abroad

The Local spoke to the co-founders of Monito, a money transfer comparison site that helps you find the best exchange rate on international money transfers.

How to find the best rate when sending money abroad

It was while studying in Hong Kong that Monito co-founder Laurent Oberholzer first noticed that there was room for improvement when it came to international money transfers.

“I distinctly remember that you would see long queues of people standing in line for hours to send money back home,” Oberholzer tells The Local. “There are a lot of workers from the Philippines in Hong Kong and they are making a big sacrifice to help their families. I would see them with these cardboard mats, which they would sit on, and they would be playing games to pass the time.”

Oberholzer, who is Swiss, also discovered first-hand the exorbitant fees that can be charged when receiving money abroad from his parents. He soon began to think that the entire money transfer process could be overhauled and improved.

Save money on international money transfers with Monito

Thousands of miles away in Cameroon, Swiss brothers François and Pascal Briod were having a similar light-bulb moment. The Briods first set up a non-profit organisation when they were youngsters to fund projects such as AIDs prevention workshops in Cameroon. However, despite their good work, they encountered high fees when transferring the funds they had raised to the African country. And their regular work visits to Cameroon were also an eye opener.

 

“You would see advertising for money transfers everywhere but there was a lack of transparency about it all. Africa has always had a reputation for high money transfer fees; the global average is 7 percent, while in Africa it is still 12 percent,” says François

Photo: Co-founders François, Laurent and Pascal

Inspired and motivated by their foreign sojourns, the trio converged in their native Switzerland with an ambitious goal to shake up the world of international money transfers.

“It started with an idea to try to save $28 billion in excess fees, which is quite a lot of money that can be saved!” says François.

$28 billion may sound like an eye-popping amount but that figure is based on data from the World Bank which in 2014 reported that a total of $582 billion was sent in remittances. Migrants paid an average of 7.9 percent on those transfers so Pascal, François and Laurent estimated that billions could be saved if people used cheaper money transfer services.

Together in 2013, the trio founded a price comparison money transfer website and christened it Monito — think Skyscanner but for money transfers. The business model is simple: users get to choose the best deal within a matter of seconds of entering their search request. Success has been forthcoming for the Swiss entrepreneurs with Monito scooping numerous start-up awards.

Sending money abroad? Compare all your options here

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The trio say that moving and living abroad has been key to their foray into entrepreneurship.

“You broaden your perspective when you live in another country. You encounter different problems so you have to try and find creative ways to solve things,” says Laurent.

Those problems can include learning a new language, finding your way around, embracing a new culture, as well as sending and receiving money from back home.

“Living abroad has been fundamental to me becoming an entrepreneur,” says Laurent of his time in Hong-Kong. “Migrants in any country have a higher propensity to be entrepreneurial; you are forced to go outside your comfort zone. Living in a different country changes your preconceptions and has a huge impact on who we are.”

That being exposed to multiculturalism can boost your career is also backed up by science. A 2013 scientific article in the Social, Psychological and Personality Science journal stated that ‘multicultural engagement’ was paramount in predicting subsequent career success.

In the space of just six years, the founders of Monito have established strong relationships with money transfer operators as well as with their many returning customers. Their goal of saving consumers $28 billion in fees remains an ongoing motivator.

“Most people have no clue how much it costs to send or receive money. In some cases there are mind-boggling numbers of up to 25 percent because of all the hidden fees. We want to raise awareness in more markets,” says Laurent.

He continues, “We want to make things as transparent and simple as possible; banks don’t have a strong interest in transparency. We are trying to help people save money and have been met with a positive reaction.”

The Swiss trio preach perseverance and passion for other expats keen to pursue entrepreneurship.

“We never considered that six years later this is where we would be. You have to try and see what you can do. There is no secret. You need to put in the hours and keep pushing,” says Laurent.

His colleague François concurs, concluding: “Just do it!”

This article was produced by The Local Creative Studio and sponsored by Monito.

BUSINESS

Clock ticking on Swiss watches’ raw materials from Russia

Diamonds shine brightly at this year's Geneva watch fair but the sanctions slapped on Russia could soon force the Swiss watch industry to produce more subdued designs.

Clock ticking on Swiss watches' raw materials from Russia

Russia is a major supplier of diamonds, gold and other precious metals to the luxury watchmakers exhibiting at Watches and Wonders, one of the world’s top salons for the prestige industry.

The Russian group Alrosa — the world’s largest diamond mining company — was hit by US sanctions within hours of the Kremlin-ordered invasion of Ukraine on February 24.

According to US Treasury figures, it accounts for 90 percent of Russia’s diamond mining capacity, and 28 percent globally.

And while trade between Switzerland and Russia is modest, gold is the chief import, ahead of precious metals such as platinum followed by diamonds not mounted or set, according to the Swiss customs office.

Compared to other sectors of the Swiss economy, “watchmaking was a branch that was less affected than others by supply problems in 2021”, Jean-Daniel Pasche, president of the Federation of the Swiss Watch Industry, told AFP.

But that may no longer be the case, he acknowledged, adding that it was hard to assess the repercussions for the watch industry at this stage.

“There are obviously reserves. Afterwards, we will have to see, depending on how long the conflict lasts,” Pasche said.

The booth of Swiss luxury watchmaker and jeweller Piaget at Watches and Wonder

The booth of Swiss luxury watchmaker and jeweller Piaget, owned by Richemont group, photographed on the opening day of the Geneva salon. (Photo by Fabrice COFFRINI / AFP)

Recycled gold and palladium
The Swiss luxury giant Richemont owns the Cartier and Van Cleef & Arpels jewellery firms, plus eight prestigious watch brands, including Piaget and IWC.

The group took the lead on Wednesday, saying all its brands have stopped sourcing diamonds from Russia.

The move will create a lot of work on the supply chain to find responsibly sourced, quality diamonds from elsewhere, Richemont chief executive Jerome Lambert told a press conference.

Gold supply is of less concern. For a decade or so, Richemont has been sourcing recycled gold for watchmaking, bought from industry and the electronics sector.

For palladium, used for instance for wedding and engagement rings, the group decided “ahead of the sanctions” to switch to suppliers specialising in recycled palladium, Lambert said.

Draining the stocks
At Patek Philippe, one of the most prestigious Swiss brands, the firm’s president is counting on his stockpile to ride out the storm.

“Luckily I produce in small quantities,” said Thierry Stern, who represents the fourth generation of his family at the company helm.

Watches made with titanium and ceramics are displayed at the booth of luxury Swiss watch manufacturer IWC,

Watches made with titanium and ceramics are displayed at the booth of luxury Swiss watch manufacturer IWC, on the opening day of the Watches and Wonders Geneva show. (Photo by Fabrice COFFRINI / AFP)

“So I don’t feel any difference yet,” he told AFP. For 2022, Patek Philippe plans to manufacture 66,000 timepieces.

“And if I can’t find certain stones, I can always do engraving,” said the head of the  brand, which relies on a wide range of disciplines including ceramics, marquetry and enamel.

H. Moser, a niche brand producing 2,000 watches a year for wealthy collectors, struck much the same tone.

“Purchases are made in advance. For example, for the casings that I want to make in 2023, I have already bought all the gold I need,” said boss Edouard Meylan.

“But maybe in six months’ time some of our suppliers will call to push back the deadlines because they haven’t received the materials,” he admitted.

Concerns over raw materials “will drive up prices, of course”, said Jon Cox, an industry analyst with the Kepler Cheuvreux financial services company.

However, compared to other sectors, luxury firms have more leeway to pass on costs to customers, he added.

At the Watches and Wonders salon in Geneva, where 38 brands are exhibiting until Tuesday, the displays are brimming with diamonds, reflecting the “generally upbeat mood” of the industry this year after a prosperous 2021.

However, given the war and its repercussions, “I imagine product development will move to more subdued luxury goods”, Cox said.

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