Daniel Abrahams and Stevan Litobac address the rip-off involved in changing currency.
“The most important thing I’ve learned about Israeli talent is its fearlessness,” says Daniel Abrahams, co-founder of MyCurrencyTransfer.com. “It is no surprise to me that Israel has more companies listed on the NASDAQ than all of Europe combined, and that it is startup capital of the world.”
This is why Abrahams, 26, has opened a branch of his London-based office in Tel Aviv.
It was a natural fit for the English entrepreneur, whose mother is Israeli.
“We came here as part of a talent-acquisition strategy,” he admits. “But then we fell in love with the atmosphere and spirit of the place – perfect for innovation and momentum.”
Over the past three and a half years, Abrahams and business partner Stevan Litobac have turned their innovative websites, MyCurrencyTransfer.com and MyTravelMoney.co.uk, into the leading foreign exchange comparison brands.
The meeting of their minds – and very different skills — first took place at a London coffee shop, though their initial acquaintance was made on a website that matches tech innovators (Litobac) with commercial entrepreneurs (Abrahams), and both had attended Manchester University at the same time.
The newfound associates spent their first encounter discussing the “rip-off” involved in exchanging currency. Abrahams recounted how he lost money through frequent bank transfers from home while he was an exchange student at the University of Sydney. Even travelling back and forth between Australia and the UK took a financial toll, as converting cash also was not cheap. Litobac had similar experiences.
“Like most consumers, we hadn’t thought that there was a way to avoid paying high fees for such simple transactions,” Abrahams tells ISRAEL21c. “We would see a rate on a board at a bank or airport and think we had no choice but to accept it as a given.”
Although online comparative pricing was booming, “the retail foreign exchange space was not tapped into. Nobody was really comparing the best deals on euros or dollars.”
Seeing an opportunity in the $300-billion to $500-billion-a-year industry of foreign real estate transactions (including Diaspora Jews buying homes in Israel), Abrahams and Litobac decided to “create a site to help individuals and businesses find the fairest and cheapest way to make international payments and purchase travel money.”
No more hidden fees
The joint venture began in a tiny office in Finchley, Northwest London. Thanks to the help of TrainE-TraidE, a charity that incubates young Jewish entrepreneurs, Abrahams and Litobac were able to implement their idea of providing a service for negotiating currency exchange rates without hidden fees.
“The market is blinded by banks and currency companies claiming to offer a zero-percent exchange rate,” says Abrahams, showing off his new digs on Menachem Begin Boulevard near Tel Aviv’s iconic Azrieli Towers. “That’s a myth that merely means those banks or companies do not charge an extra fee. It does not mean that the exchange is free, contrary to popular perception.”
The real hidden fee within any currency exchange, he explains, “lies within the rate you’re offered, and how much you lose within that rate.”
Abrahams came up with the idea for a comparison site on which “you can select one of our brokers and agree on an exchange rate that would be typically inside a percent away from the real exchange rate.”
Then, rather than transferring money from one bank to another – or from a bank to a realtor or other entity – it is first exchanged by the brokerage and then transferred by that brokerage to its destination. “On every 100,000 pound transfer, we save customers between 3,000-5,000 pounds, which is a hell of a lot of money.”
This concept of non-bank foreign exchange already existed, but on a much smaller scale.
“It’s a pretty new industry, but it’s one in which there is huge innovation going,” says Abraham.
When clients began to request a similar service for purchasing small sums of travel money, the pair launched MyTravelMoney.co.uk, where Brits can get the best rates on holiday cash in 60 currencies.
Business started with $500
Abrahams’ venture earns money on every transfer by taking a referral commission from the broker.
“And because we are building a competitive marketplace, the brokers are never going to increase their customer rates as a result of having to pay us,” says Abrahams. “They know that on our site, customers can play brokers off against each other. It is this haggling that makes our platform unique compared to standard comparison sites, such as those for finding the cheapest air fare.”
Abrahams expresses his gratitude to the Jewish organization that provided his fledgling business with free office space and a “black book of contacts” so crucial for startups, even though his business partner is not Jewish.
“We began the business with about $500,” he says, laughing. “Within a year and a half, our site began to pick up a lot of traffic. Today, we are getting 100,000 visitors per month.”
The company’s search-engine optimization, social-media and community-building efforts enabled Abrahams and Litobac to expand, first by hiring a full-time Web designer and then by moving to the Google campus in East London’s Tech City. The team now includes three staff members in London, two in Israel, and a network of freelancers in both countries, as well as in Europe and Asia.
The opening of the Israel office enhanced the diversity of their skills, he asserts.
“It has taught us to think differently about completing tasks. We have learned new approaches from Israeli entrepreneurs. Having been in the military and experiencing the battlefield, they bring strategic thinking to the workplace; the idea of succeeding at something no matter what; of being invested in a cause – your country or your company – that is bigger than yourself.”