Bank average cost per international transaction

McKinsey's latest Global Payments Report, which is always an interesting read. I felt that they really missed an opportunity to visualise the challenge faced by banks trying to bring down the cost of international transfers.

Here is their chart. Notice the distorted y-axis.

Here is the same data, with the y-axis to scale. 

How to pay affiliates in Pakistan

Are you running a global affiliates network? Paying affiliates in Pakistan can be expensive if you don't chose a specialised payments company. Banks usually charge £9-£25 for an international payment and up to 4% in conversion fees. Add to that unpredictable receiving and intermediary bank fees, and it's clear you can't run your affiliate network using SWIFT payments.

The two most popular choices for payouts to Pakistan Paypal and Payoneer. Paypal's mass payments tool lets you send money to an email address, making it very easy to get set up. The cost is typically 2% (max $30), plus a 2.5% exchange rate mark-up, but for many businesses it's the easiest way to get started and most of the cost is born by the payee. However, Paypal doesn't yet support withdrawals to local bank accounts in Pakistan, making it an unpopular choice among affiliates (list of supported currencies here).

Payoneer allows you to use GBP, EUR or USD for making mass payouts. For your affiliate to receive funds, they need a Payoneer prepaid debit card, which they can use to spend their Payoneer balance. The pay-out fee is $5.95, plus a conversion fee of up to 3.5%. they can also receive the funds to an local bank account in India and roughly the same cost.

If you are making a lot of payments, these costs quickly add up. Another solution is TransferWise, and we are currently trialling a mass payments solution with a limited number of customers. With TransferWise, the pay-out fee is £0, and the conversion fee is only 1% and there is no exchange rate mark-up or receiving fees. You can apply for access to the beta program herehttps://transferwise.com/u/erikj.

How to pay affiliates in India

Paying affiliates in India can be expensive if you don't chose a specialised payments company. Banks usually charge £9-£25 for an international payment and up to 4% in conversion fees. Add to that unpredictable receiving and intermediary bank fees, and it's clear you can't run your affiliate network using SWIFT payments.

The two most popular choices are Paypal and Payoneer. Paypal's mass payments tool lets you send money to an email address, making it very easy to get set up. The cost is typically 2% (max $30), plus a 2.5% exchange rate mark-up, but for many businesses it's the easiest way to get started and most of the cost is born by the payee. However, Paypal doesn't support India, so we're left with Payoneer.

Payoneer allows you to use GBP, EUR or USD for making mass payouts. For your payee to receive funds, they need a Payoneer prepaid debit card, which they can use to spend their Payoneer balance. The pay-out fee is $5.95, plus a conversion fee of up to 3.5%. they can also receive the funds to an local bank account in India and roughly the same cost.

If you are making a lot of payments, these costs quickly add up. Another solution is TransferWise, and we are currently trialling a mass payments solution with a limited number of customers. With TransferWise, the fee is 0.7% and there is no exchange rate mark-up or receiving fees. You can apply for access to the beta program herehttps://transferwise.com/u/erikj.

How much does international business payments cost?

With the help of a research agency, TransferWise called up the high-street banks in the UK to see what sending £2000 to Germany, the US and India would cost for businesses. Turns out, it’s a lot, but they won’t tell you if you don’t ask.

The up-front fees charged by banks varies between £9 and £25. Santander is the most expensive, and Natwest is the cheapest. But that's not all, the banks all added a mark-up to the exchange rate. The worst one is again Santander, who added on 3.47% in the exchange rate.

It doesn’t end here however. We also investigated how much the recipient pays on the other end. Commerzbank in Germany took £14 and Bank of America took £24. Only in India were there no receiving fees.

Sending bank fees for £2000 to EUR

Name of bank	% exchange rate mark-up	International transfer fee	Exchange rate mark-up in £	Total sending fees
Barclays	2.02	£25.00	£40.39	£65.39
HSBC	2.07	£9.00	£41.45	£50.45
Lloyds	2.45	£15.00	£48.99	£63.99
Natwest	1.73	£12.00	£34.66	£46.66
RBS	2.29	£12.00	£45.72	£57.72
Santander	3.47	£25.00	£69.36	£94.36

Read the research here.

The relationship between daily and weekly search volume from Google Trends

If you're familiar with Google Trends, you know that they provide data on a daily, weekly or monthly frequency. Google Trends only provide daily data for 90 days at a time, so sometimes we want to compare weekly and daily data. But how can we compare the daily and weekly search volume?

Google doesn't make any information about this available to the public, so I set out to find out through trial and error.

The graphs below show the daily search volume, weekly search volume, and the average daily search volume by week. Most of the time, the average daily SVI and the weekly SVI move in tandem. They have different values however, which is something we would have to keep in mind when combining several daily series into more than 90 days.

Also, at the end of the time period, where we have an incomplete week, the average daily and the weekly SVI differ.

Google Trends bulk download service

The Google trends bulk download service is live. It allows you to specify an unlimited number of keywords, your desired date range, data frequency (daily, weekly or monthly) and if you need the search terms to be comparable in terms of search volume.

You create a request to the service by filling out this form. The service returns the raw files, along with the database ready tables containing historical search volumes for each search term, geographical data and related-searches data.

The Google trends bulk download service is a convenient way to access Google Trends for academic research, market analysis and competitor insight.

Leave a comment here to suggest further improvements.

How do remittance companies stack up against TransferWise on Google Trends?

The numbers from Google Trends below show how various companies focusing on international remittances stack up against TransferWise. TransferWise is the flat line, and the other companies' numbers are in relation to TransferWise's. Companies with a large offline foot print such as Western Union and Moneygram are in the lead world wide. Xoom, a remittance company acquired by PayPal in 2015, also do well.

If we zoom in on the UK, the story changes. While Western Union is still the most Googled brand in the remittance industry, the lead shrinks from 13X to 2.2X over TransferWise. Over time, the declining share of search volume of Western Union becomes quite clear. This might explain part of the reason that they are so eager to build their own online currency transfer platform.

World Wide

TransferWise is flat line.

Companies	Search interest relative to TransferWise
western union	13.00
moneygram	4.14
xoom	1.38
transferwise	1.00
post office money	0.47
worldremit	0.39
ria money transfer	0.24
azimo	0.20
transfast	0.17
moneycorp	0.17
caxton fx	0.14
fairfx	0.14
remitly	0.12
currencyfair	0.09
hifx	0.08
transfergo	0.06
worldfirst	0.02
ukforex	0.01
tawipay	0.00

United Kingdom

Companies	Search interest relative to TransferWise
western union	2.19
transferwise	1.00
post office money	0.83
moneygram	0.58
moneycorp	0.41
fairfx	0.33
caxton fx	0.28
azimo	0.22
worldremit	0.22
transfergo	0.13
hifx	0.09
currencyfair	0.06
xoom	0.06
ria money transfer	0.05
ukforex	0.04
worldfirst	0.04
transfast	0.02
remitly	0.00
tawipay	0.00

If we look at the market over a longer period of time, the decline of Western Union's share of search volume becomes clear.

Google Trends bulk download

I put together an API to make it easier for everyone to download data from Google Trends. You can find it here: http://46.101.74.214:8000/getgt.html

Here are a couple of examples of how it can be used:

• http://46.101.74.214:8000/getgt.html?query=amazon,quora,google,transferwise (downloads one file)
• http://46.101.74.214:8000/getgt.html?query1=amazon,quora,google,transferwise?query2=spotify,airbnb,supercell

It generates the download links for Google Trends and to be able to download the files you need to be signed in to Google.

How does the payment card ecosystem work?

There are five entities in any card transaction. The cardholder, the merchant, the acquirer, the card scheme and the card issuer. The cardholder is usually a person looking to buy something. The merchant is someone like Booking. The acquirer is a company like Adyen. The card scheme is Visa or MasterCard. The card issuer is a bank, Barclays for instance.

Flow of information

Source

Flow of money
When the payment processor receives the transaction data, they bill the cardholder and deposits the money to the merchant's bank account. The bank account must be a merchant account.

The payment processor

A payment processor, also known as an acquirer, is the one that receives card transaction details (name, card number, expiry date, CCV code). They then pass on the information to the card issuer via the card scheme for authorisation. When you buy something from Booking.com, they pass on your card details to Adyen, that send the information to MasterCard or Visa, that send the information to Barclays. Barclays then authorise the payment, via the card scheme, to Adyen, to Booking.com. 

The main job of the payment processor (besides passing on the information) is to deal with chargebacks and to respond to request for information from the issuer. 

There may also be a payment gateway between the merchant and the payment processor. It is prohibited (at least in the US) to send transaction details directly from a website to a payment processor. The payment gateway acts as a physical payment terminal.

Source

The merchant acquirer

The merchant acquirer recruits the merchant to join the network and provides front-end and back-end services. The merchant acquirer routes the transaction to the payment processor. 

The card issuer

The job of the card issuer (typically a bank) is to issue card, bill the card holder and collect payment.

The card holder

The credit card holder's liability is limited to $50 in the US (regulation Z). Regulation E affords similar limitations on liability to debit cards.

The issuing bank

The issuing bank is responsible for authorisation of the payment. That means checking that the card holder has sufficient credit and carrying out fraud checks. After authorisation comes clearing and settlement. Settlement is the process of clearing the debt incurred by the card holder when the purchase was made. Clearing is a set of transfers that happen after purchase and before settlement. Money usually don't change hands. Instead, lots of transactions are netted. Clearing also includes meeting reporting requirements and the exchange of information this entails. The most common example of clearing is the exchange of transaction information from the merchant to the bank.

What is authorisation?

Authorisation is the process of obtaining permission from the bank that issued the card to accept the card for payment. 

What is clearing and settlement?

Clearing and settlement is the process of sending transactions through the Visa or MasterCard network so that the merchant can be paid for the sale

Source

What Coen brothers movies are on UK Netflix?

Do you also love the Coen brothers but don't know which of their movies are on Netflix? I've solved the problem for you.

Here's the full list:

Year of release	Title	On Netflix UK?
1984	Blood Simple	No
1986	Crimewave	No
1987	Raising Arizona	No
1990	Miller's Crossing	Yes
1991	Barton Fink	No
1994	The Hudsucker Proxy	No
1996	Fargo	Yes
1998	The Big Lebowski	No
1998	The Naked Man	No
2000	O Brother, Where Art Thou?	No
2001	The Man Who Wasn't There	No
2003	Intolerable Cruelty	No
2004	The Ladykillers	No
2006	Paris, je t'aime: "Tuileries" segment	No
2007	Chacun son cinéma: "World Cinema" segment	No
2007	No Country for Old Men	Yes
2008	Burn After Reading	No
2009	A Serious Man	No
2010	True Grit	No
2012	Gambit	Yes
2013	Inside Llewyn Davis	No
2014	Unbroken	No
2015	Bridge of Spies	No
2016	Hail, Caesar!	No

Not a lot by the Coen brothers on Netflix UK unfortunately.

How to define a market segment

These are the characteristics of a market segment:

• They have matching needs
• They can reference each other

Source

Greeks use Revolut's app to skirt capital controls

Judging from the interest on Google for the prepaid card and payments app from the London based fintech company Revolut, the are experiencing rapid growth at the moment. Interestingly, most of the searches are coming from Athens. 

With capital controls still being in place in Greece, and many Greeks having a hard time getting cash out, it seems like locals have discovered the benefits of having a foreign card. A bit of Googling shows that it is being recommended as a way to skirt restrictions. A novel use of the company's product. Will fintech play an increasing role in the future in times of financial uncertainty?

Elements of a great product launch

From Jeff Whatcot's presentation entitled "elements of a great launch".

What is a launch? Externally, it's a public announcement that secures widespread coverage in press and social media and builds your brand leadership position and drives a surge in demand for your products.

A great launch is an effective way to add to the power of your go-to-market strategy.

Here are the essentials:

• Timing: anticipate industry communication waves and pick one to surf
• Influencers / customers: get some influencers and customer references on board well beforehand and tell them what to say
• Pre-brief: go deep with one or more outlets so they can write something substantive and thoughtful
• Messaging: capture the key points in a press release or thought-provoking blog post and make this the bible for your pre-briefing work
• Show don't tell: a great demo video is worth a thousand slides

Make sure to watch the video as well. Jeff Whatcot gives some interesting examples from his experience with company and product launches.

Download link for Google Trends data

Enter keywords

You need to be signed in to Google for the link to work. You can enter up to five words.

1:
2:
3:
4:
5:

Once you have downloaded the data, you might want to parse it to get a clean table.

Load file to parse data

---

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Get Google Trends download link with javascript

The URL_GT function I use to collect Google Trends data was previously implemented with R. To make it easier to download Google Trends data, I created a javascript implementation. Use the code below, or get it from Github.

If you want all data, it's enough to enter a keyword. You can add an array of up to five keywords to compare. To download the data, simply click the link generated.


'use strict';

function URL_GT(keyword, country, region, year, month, length){
  
  var start = "http://www.google.com/trends/trendsReport?hl=en-US&q=";
  var end = "&cmpt=q&content=1&export=1";
  var geo = "";
  var date = "";
  var URL = "";
  var month=1;
  var length=3;

  
  //Geographic restrictions
  if(typeof country!=="undefined") {
    geo="&geo=";
    geo=geo + country;
    if(region!==undefined) geo=geo + "-" + region;
  }
  
  if(typeof keyword==="string"){
  var queries=keyword;
  }
  
  if(typeof keyword==="object"){
  var queries=keyword[0];
    for(var i=1; i < keyword.length; i++){
      queries=queries + "%2C" + keyword[i];
    }
  }
  
  //Dates
  if(typeof year!=="undefined"){
    date="&date="
    date=date + month + "%2F" + year + "%20" + length + "m"
  }
  
  URL = start + queries + geo + date + end;
  URL = URL.replace(" ", "%20");
  return(URL);
}

Revolut jumps ahead of Azimo in search volume and turns off their invite program.

Revolut jumps ahead of Azimo in search volume in January 2016. Quite an impressive increase in interest for Revolut's card and mobile wallet. Was the interest too much for the company? A couple of days ago, they turned off their invite program.

Google Trends för influensasymptom och spridning i Sverige

Hur influensan sprider sig i Sverige. Data från Google Trends.

Sedan 2004

Områden med hög risk för influensaspridning

Trend det senaste året

How to pay freelancers in Pakistan

There's no PayPal in Pakistan, so paying Pakistani freelancers can be difficult.

Negotiate with your bank

Paying international invoices by wire transfer can be expensive and your bank will do their best to overcharge you with hidden fees. If you are doing a lot of transactions in foreign currencies, you can usually negotiate a better deal with your bank. If you are making payouts under £100 000 to Pakistan, chances are that your bank won't be interested in negotiating with you.

Use a freelancer platform

Another option is to use a freelancer platform that support payout to a Pakistani bank account like Odesk or Elance. These platforms will take a cut and is not ideal if you already have a relationship with a freelancer. If you don't have an ongoing relationship or the project is small, the freelancer platforms are a good option.

Use a specialised currency provider

For most businesses however, it makes more sense to use a specialised currency provider that gives you a fair deal regardless of the amount you are sending. With a specialised provider, you can send the money directly to the freelancers bank account in Pakistan, while avoiding the bank fees.

You need to be careful about who you use however. Several providers, such as UKForex, will claim to give you free transfers if you send a certain amount. Be ware of the spread however. The spread is a hidden fee embedded in the exchange rate. The spread charged by UKForex is 0.8%, plus the £10 transfer fee.

TransferWise on the other hand doesn't charge you a hidden spread. Instead, they add a 0.5% fee on top of the mid market rate. That has the added benefit of making the cost of the trade clear to you and your accountant.

If you are making a monthly payment of £2000 with your bank, they would typically charge you £100. UKForex would be a bit cheaper, at 26. TransferWise would be your best option, at only £10.

List of providers sending money to Pakistan

• TransferWise
• Azimo
• UKForex
• WorldRemit
• Xoom

Find out more about using TransferWise for your business here.

Revolut jumps in search volume and is now on par with Azimo on Google Trends

Currently reading: the innovators dilemma

First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies.

Planning better, working harder, becoming more customer-driven, and taking a longer-term perspective—all exacerbate the problem.