Founded by Robinhood alumni, this FX challenger aims to undercut Wise

Attempting to rival the likes of Wise and Revolut, a new fintech has landed, founded by Robinhood early employees Neeraj Baid and Patrick Kavanagh.

The American ex-pats arrived in London and spotted what they saw as a gap in the market: a foreign exchange service without the markups. 

Enter Atlantic Money.

The app is rolling out its product for the first time to early sign-ups in the UK now and expects to save the average customer around 75 per cent annually compared to Wise.

Despite sounding very similar to Wise, what sets the startup apart from its competitors is a flat £3 fixed fee and zero FX markup for all transfers up to £1m.

While a £3 fee is a lot for a small transfer, Atlantic Money puts itself ahead of its competitors when it comes to larger transfers.

The second-generation challenger sees the set price as a better reflection of the true cost of sending money abroad.

Baid and Kavanagh’s previous experience in brokerage made them realise that banks and large institutions were able to convert “nearly unlimited” amounts of currency at much lower, fixed prices, while customers were charged higher fees for larger transfers.

"International payments is one of the few markets in the world where you are charged disproportionately more for buying in bulk," Baid said.

"We don’t think that’s fair. Transaction costs are largely fixed per transaction rather than the amount transferred, so there is no justification to charge different fees when the underlying service provided is exactly the same."

Wise v Revolut v Atlantic Money

At the time of writing, if you were to convert £1,000 to USD on Wise, you would be charged £4.43 for a low cost transfer and £7.41 for a fast and easy transfer.

On Revolut, it would cost £3, the same as Atlantic Money.

The difference here is almost negligible for Wise, and the non-existent for Revolut, but up the transfer to £5,000 or even £10,000 and the fees begin to soar.

A Wise low cost transfer is £41.18, a fast and easy transfer is £70.97 and on Revolut it’s £50 for a £10,000 transfer.

Say you really wanted to push Atlantic Money’s £3 to the limit and transfer £1m to USD, the Wise transfer would cost you £2,792.28 and the fast and easy transfer option disappears. 

On Revolut the transfer rate soars to £5,000.

So for larger transfers, Atlantic Money is clearly filling a gap in the market for a far less expensive transfer.

What Atlantic Money has not shared yet is how long transfers will take.

Maybe that will be where Wise and Revolut’s offerings stand apart, with both companies aiming to transfer at least the same day for larger transfers, and almost instantly for smaller ones.

With a team including former employees from Wise, Tinkoff, Monzo, Amazon and Freetrade, and the backing of former employers Robinhood founders Vlad Tenev and Baniju Bhatt, as well as a range of VCs, the company seems well set up to start its rollout. 

Customers who signed up when the business came out of stealth in March will be onboarded first, followed by those who register now for access in the coming weeks before it is available to the rest of the UK soon.