I asked Circle how it made its money, and the answer was simple: it doesn’t. Testing the service, I found that it was within one cent. The net result is that the company makes 6 cents for every pound it converts to dollars.Ĭircle, however, doesn’t charge any fees, and its conversion rate is almost bang-on the mid-market rate. Do it the other way around and the rate becomes $1.33. However, if I try to change pounds into dollars at a typical currency bureau, I’m offered $1.27 instead. Second, they usually have a ‘spread’ of conversion rates, which means the company takes a bite out of the currency exchange.įor example, when I Google £1 in $ at the time of writing, Google tells me the rate is $1.30. These may be for sending money, for receiving it or for withdrawing it into a bank account. Most currency-conversion services make their money in one of two ways, often both.
It originally focused on trading Bitcoin before switching into traditional currencies. Circle Pay claims to be different, offering mid-market rates (the same ones you’ll see if you Google the exchange rate) and no fees at all …īased in Boston, Circle is backed by more than $135M in venture capital, some $50M of it led by Goldman Sachs. Other apps allow peer-to-peer payments, but usually through integrations with existing payment services that offer the same poor rates. Direct bank-to-bank transfers typically offer somewhat better rates, but setting up an international payment can be complex, and the rate you get usually ranges from the poor to the borderline criminal.
PayPal, for example, is a really simple way to send money to someone, and it takes care of the currency conversion – but at a really terrible rate. Anyone who has ever sent or received payments between countries will know that the process is either expensive, complex or both.
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