The market of Non-bank bank transfers. Interview with Co-Founder Boaz Zaionce

What direction is the payments and wire industry going in terms of growth?

The non-bank money transfer industry, being a relatively young industry, is seeing a steady growth of quite a few players, however, not all are competing in the same segment within this industry. You have the e-wallet players, non-bank bank wire companies and even digital money like Bitcoin for example, all with one aim, to offer an alternative to banks. As technology moves forward and people seek faster and easier ways to handle their finances, it is clear to see that this industry will keep on growing.

What are the problems with the banking systems in terms of sending money abroad?

If you ever had to send money abroad from your bank, you probably had a puzzling experience. You executed your transaction, paid the fee that was stated and then a day or a few days later an extra sum of money was deducted either from your account or from the beneficiary’s account. You ask your bank how come? And they answer by saying that this is how the bank system works or to be exact, this is how the SWIFT system works. This network is where the majority of the bank transfers in the world are registered. The 40-year-old Swift monopoly is expressed in the commission that it takes out of each transfer, and also by diverting the transfers to mediator banks and middlemen, which also take fat commissions. Without going to deep into the system, it is clear that this of course entails a cost.

To make things simpler, the high costs of transferring money internationally is due to the system banks use. To make things even worse, as banks pretty much dominate the financial world, the exchange rates they offer individuals and even businesses can easily be lowered, but without competition, there is no real reason for this to happen.

Boaz Zaionce sitting on a couch

What is Covercy ‘s uniqueness?

Covercy’s main focus is to provide SMB’s with an easy solution to conduct their international commercial transactions. SMB’s like all businesses must pay their suppliers / employees etc. in full and therefore the amount received by the beneficiary must be exact. We developed a system where the money displayed, when concluding a transaction online, will be the final amount the beneficiary will receive, no surprises. This can happen thanks to our risk management mechanism, which is hedging the exposure of foreign currency and allows it to offer a comparatively attractive rate by minimizing the risk. Furthermore, due to our network that supports local bank transfers, no extra charges will be inflicted after a transaction has been completed.

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