FairFX - anyone got a view

Tuesday, Feb 05 2019 by

Hi All,
I'm pretty disappointed in my investment in FairFX (LON:FFX) . All the updates seem to have been good, the direction of the company seems right, ok so Brexit and other things provide some headwind, but does that really justify the drop in the SP?

My current holding is well underwater, beyond my normal tolerance, but I am having trouble letting go of it because I can't see anything is actually wrong. However, because I feel I might be missing something I don't want to double down on it either.

Anyone here got a view on why the SP is heading in the wrong direction?

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Equals Group Plc, formerly FairFX Group Plc, is a provider of foreign exchange (FX) payment services to both private clients and corporations through prepaid currency cards, travel cash and international money transfers. Its segments include Currency cards, FairPay, Dealing and Central. It sells foreign currency through technology platforms offered on the Internet. It has a cloud-based peer-to-peer payments platform that enables personal and business customers to make multi-currency payments in a range of currencies and countries, and across a range of FX products through an integrated system. It offers prepaid currency cards, including Euro Card and US Dollar Card. Its travel cash service offers delivery of banknotes directly to customer using Royal Mail. Its international payments service includes FairPay, which offers a solution for payment of property maintenance and mortgages; payment of expenses abroad; buying goods or services, and sending money to family and friends. more »

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17 Posts on this Thread show/hide all

threeputt 5th Feb 1 of 17

If i's any help Robbie Burns The Naked Trader mentioned ffx in his recent blog:

"Ffx began to weaken again so sold, I am looking to try one more time at a lower price, but it would be my last try as there does seem a lot of value there"

He's made the right approach each time by selling on weakness and buying back at a cheaper level (easier said than done),his most recent sale was at 122 and before the recent trading update.which wasn't fantastic imo . Never been in personally but if he's interested so am I. GL

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herbie47 5th Feb 2 of 17

Hi Carey,
I did hold this share briefly then sold because of Brexit concerns last year. Yes everything looks pretty good, the only thing is the last latest forecasts have been downgraded, this must have been in the recent update. I'm finding it very difficult to know what to do with Brexit hanging over us, maybe it is best to sell everything and then buy back in when things are clearer. Some shares have clearly been sold off for no good reason, Water Intelligence (LON:WATR) is just one example, Burford Capital (LON:BUR) is another. If you believe in it then hold on, if you have a large holding you could reduce your exposure. On a positive note I see Crystal Amber Fund have been increasing their holding.

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Howard Adams 5th Feb 3 of 17


I do not know anything about FairFX (LON:FFX) but a quick look at the Stock Report in the 'Broker Forecast' section suggests broker sentiment is going strongly against the share.

Again I emphasis I know nothing about this FairFX (LON:FFX) share, or their business at all.

But I have noted from recent share price moves the tie up deal between Eservglobal (LON:ESG) and Mastercard on 24/01/19 which caused a surge of 25% for Eservglobal (LON:ESG) share price. I think this RNS relates https://www.stockopedia.com/share-prices/eservglobal-LON:ESG/news/eservglobal-limited-change-in-substantial-holding-urn:newsml:reuters.com:20190116:nRSP2806Na/

This seems to have coincided with FairFX (LON:FFX) price decline. No idea if this read across has merit but it might be a factor catalysing low analyst sentiment from about the same time.

I picked up on this Mastercard tie up for FairFX (LON:FFX) from this RNS https://www.investegate.co.uk/fairfx-group-plc--ffx-/rns/trading-update/201901250700040728O/ In this they seem to be placing emphasis on this tie up. But might the Mastercard Eservglobal (LON:ESG) deal put a spanner in the works or at the least have created uncertainty and thus headwinds for the share price.

Obviously FairFX (LON:FFX) also mention Brexit uncertainties as well in their RNS.

Hope it helps.


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jonesj 5th Feb 4 of 17

I cannot get my head around the FairFX products. If I look at foreign currency transfers or overseas ATM withdrawals, which are services I tend to use, it is obvious that better deals can be found elsewhere AND very quickly.
To use the product is irrational to me.
To invest in the company, I have to assume the number of consumers prepared to make irrational purchases (in my opinion) will continue to increase.
I have trouble doing that, even when their track record is not bad.

This is possibly some kind of error on my part, as there are cases of other overpriced financial service providers making good investments.

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willhampson 5th Feb 5 of 17

In reply to post #444103

Hi jonesj, I don't entirely agree with your comment as FairFX (LON:FFX) is competitive for certain currencies when I have previously shopped around. Of course, I'm sure this yo-yos depending on various factors but I have been very happy with the service I received on currency transfers and basic currency exchange. For, example, on HKD it is usually quite often the most competitive. Whether that makes it an investment proposition is a different story, but I thought your comment was not entirely fair.


In terms of the share price, I think it had drifted a lot on the back of the Q4 sell-off and concerns that it wouldn't meet its lofty expectations; plus of course the B word. The recent trading update, I thought, read well but it was quite cautious in nature. That cautious tone probably makes a lot of sense as we go into a very uncertain period. Cenkos, while retaining a positive view about the share, revised their expectations down on the back of the update to a "more conservative view" which could explain the continued share price weakness.

I think FairFX (LON:FFX) is potentially an interesting investment with a longer term perspective. No position for me yet, but I will likely buy when the share price starts to show some positive momentum. All the best! Will

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herbie47 5th Feb 6 of 17

In reply to post #444103

I agree, I had one of their travel cards but never used it because of the fees, they even wanted £10 for me to renew, I eventually got my money back. I see quite a few young people using them, I can only think that they can't get credit cards which are free to use abroad because of their credit rating. The advise on travel forums is to avoid cards such as FairFx. There are several UK cards which you can get with no fees.

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jonesj 5th Feb 7 of 17

In reply to post #444128

Willhampson, in response to your comment, I just tried to get a quote for £5000 bank transfer and the HKD doesn't even show on the list of currencies on the FairFX wizard.

By comparison, Transferwise can get HKD 50682 for the £5000, which is all inclusive and usually very fast. Total loss 0.44 % vs mid market.

Since FairFX would not offer a HKD quote, I just got one for £5000 to Euros. The total loss on that was 1.59%. Better than the high street banks, but some way off the 0.46% at Transferwise.

So I stand by my comments that every time I look at FairFX as a consumer, they are not competitive.

As an investor, I need to assess the potential to grow a market in a commodity service when there are lower cost competitors offering a very good service.

Transferwise for the bank transfers.

Starling & Halifax Clarity for the cards.

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willhampson 5th Feb 8 of 17

In reply to post #444143

I'm not going to get in a tit-for-tat, but it's quite clearly here - https://www.fairfx.com/product/cash. I have used the service. Anyway, all the best to you in your investments.

Edit: for some reason the link doesn't work, but if you go on the website and click on "cash" you'll find HKD included. The exchange rate right now quoted is 9.9270. As I said, that has often been on the competitive side, today it might not be. That is all. We may be speaking across paths. 

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herbie47 5th Feb 9 of 17

It's not on transfers, for cash £4996.35 will get you 49598.77 @ a rate of $9.9270.

On transferwise on £4996 you will get HK$ 50,510.99 this is about 1.8% better than FairFx. 

That is another problem there are only do 13 currencies on transfers, Transferwise have far more, 46 I think.

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Techno Trousers 7th Feb 10 of 17

I read all the views above, and hear what people are saying with regard to the offering of FairFX (LON:FFX) However, I prefer to take the view that I know nothing about the relative merits and let the figures do the talking. From what I can see their growth is outstanding, so they must have something that others currently do not match and I think that is a better guide to the future than some random assessment of a few punters that may use some of their products from time to time.
It seems to have been severely hit in the last months, and I took another stake here at 92 having previously sold in October, catching a falling knife in the process, and which is not usually my preferred approach. However it seemed too good to ignore. I must admit to being concerned at the continued decline to 86 but there seems a bit of a bounce today, and my gut feeling is that this could be the bottom, Time will tell.
Hopefully some stability will now be achieved, and once we get the calamity that is the complete mismanagement of Brexit out of the way, the upwards trajectory could well be re-established. So, today and for the time being, I am a happy holder here. Lets see what the end of March brings, and also whether their product offering does have some sustainability and continued growth within their grasp.


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john652 8th Feb 11 of 17

Hi, those interested in FairFx should find the below useful. I emailed Investor Relations, and the CEO replied so top marks to Tony Quirke. More subscribers should do this when they have questions, (and post it here) it is quite unusual for the company not to reply (game didn’t after 3 chasers so, errm NO investment). I asked Tony why TransferWise rates smash his outa the park, and won’t that be the biggest issue he faces as it’s such a race to the bottom after ease of use is solved (and TW is super easy to use):

Dear John

Firstly, thanks for taking an interest in FairFX (FFX) and your questions around the respective FX spreads between ourselves and Transferwise (TW) are entirely valid and deserve an answer.

I’ve reviewed the TW pricing and compared it as you did to the International Payments (Fairpay) section of our website pricing and I agree with your analysis based on a GBP 1,000 to EURO FX transaction.

On the TW website, they state their charges for a GBP:Euro FX international payment transaction are a spread of 0.35% on the interbank rate plus a £0.8 transaction charge, whereas on Fairpay, the spread on the interbank is around 1.5% but with no transaction charge.

I have a few points to make on this.

Target customer - The TW model is very much aimed at the retail sector (low value, high volume) with little customer service and so is very competitive in that space. Overall, we are more focussed on large value retail and corporates and so our business model is more attune to those customers.
All our international payment transactions are sent as OUR charges. This means that we pay the recipient bank charges for receiving the funds aswell. TW send their international payment transaction as SHARED charges which mean that the recipient will most likely incur bank charges and so receive the funds short of what they were expecting. We have found that our clients get very frustrated with SHARED charges as they run into issues with the recipient (eg. suppliers will not release the goods as they did not receive the funds in full) so we send transactions as OUR charges. The additional charges we incur by sending OUR charges are typically between £5 and £15 per transaction. We cover these charges in our spread which goes a long way to explaining the difference in the TW and FFX pricing on low value transactions.
Large value payments via Fairpay. On our website, you can see that if the value of the transaction increases the spread improves so we do improve the Fairpay pricing once we’ve covered the OUR charges fees.
Service – for large retail clients and corporate clients, we offer a dedicated telephone broking service where the client can speak direct with a FX dealer. The dealer can help customers with FX strategies such as Limit Orders and FX forwards. TW does not offer this. And the spread is much lower, on average 0.80% to interbank across all currency pairs but generally much lower on the heavily traded currency pairs. And unlike TW, we do not have fixed spreads, so a dealer has the flexibility to match or better any pricing.
As you can see in note 4 of our annual accounts (attached for your convenience) the Dealing revenue segment is a significantly larger proportion of International Payments and faster growing than FairPay.

I hope the above goes some way to explaining the differences between us and TW. We are still both a small percentage of the overall FX market where the banks are typically charging 3-5% so there is a lot to play for with different business models.


Tony Quirke

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jonesj 8th Feb 12 of 17

I believe the comments by Mr Quirke are rather misleading.

I have used Transferwise extensively.

1 Their exchange rates have always been at mid market. I compare with XE every single time. There is no spread, well not unless you look to about 4 decimal places and even that is pure tracking error which may be in your favour.

2 The only fee paid is the one they quote in black and white. No additional spread.

3 Since Transferwise pay the money from an overseas domestic account into your overseas bank account, there are no foreign currency charges by the receiving bank.

In my experience, the only fee paid is the up front Transferwise fee. About 0.5%. And the money is there in my overseas account in less than 30 minutes (faster than Jeremy Corbyn could get from the palace to no 10, for example).

So I wouldn't be happy to pay FairFX 1.5%.   

His two main arguments do not match my personal experience, with over a dozen Transferwise transactions.   So I am not at all impressed with such an explanation.

Where I have a mental block is in figuring out how many other customers would be content to throw away 1% of their money on forex transactions. That might be a fantastic market, but I struggle to get my head around it.

I suppose people also pay 3% credit card fees on foreign transactions, when it takes less than 15 minutes to apply for a credit card that charges 0% for the same service.   So there are examples of consumers making zero effort to optimise.

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Blissgull 8th Feb 13 of 17

Those 0% credit card charges can be misleading. For cash withdrawals you are charged interest from the time of withdrawal and if you are overseas you might not settle your card bill on time.

I have been using a Fair FX foreign exchange card for a couple of years now and it is certainly cheaper than the charges made by my banks for overseas transactions. There may be better cards, but the savings would probably be quite small.

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herbie47 8th Feb 14 of 17

In reply to post #445393

The Barclays card does not charge interest from when you withdraw money from an ATM. It also does not charge a fee if you withdraw money from a bank over the counter. It also does not charge an ATM fee and it uses Visa rates which are better. Yes Halifax card you have to pay on the day or you will pay interest. FairFx also have some more fees, lost card, if you dispute a fee then they charge you £10. There is also a fee to renew it.

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jonesj 8th Feb 15 of 17

In reply to post #445393

Ref: Credit card interest charges for ATM withdrawals.

Halifax Clarity used to charge about 1% per month, since increased to about 1.5% a month. Would you rather pay that or a 3% forex fee ?
Incidentally, I once withdrew cash with the Halifax Clarity card in Singapore, then popped into the nearest Starbucks and paid the card off with online banking. Zero interest charges.

Paying direct for hotels with it works fine too.

There is plenty of competition out there.

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herbie47 8th Feb 16 of 17

In reply to post #445473

My Halifax charge is lower, depends on your credit rating. Yes you can use with no fees, FairFx you are paying 1.4% each time. Starling Bank quite a few people are using now, it's an online bank, not tried it yet.
I'm not convinced about the bank charges, before Thai banks charged a fee usually around 200 baht for an overseas payment into the account, not sure that would be paid by FairFx, anyway that has been stopped now, no fees. They don't even do Thai baht transfers anyway. Their baht rates are poor today only 39.53 when in Bangkok I can change at 40.6, so about 2.5% less. Exchanges in UK you can get better rates. But they seem popular with travellers, some say they give great rates. Some people even use Western Union and Paypal to transfer money. I think there is a lot of ignorance out there. Many people don't seem to care. As a user I would go elsewhere, as an investor it maybe worth buying.

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jonesj 8th Feb 17 of 17

My Halifax interest rate was an approximation (since I never pay it, precision is irrelevant).

I made a withdrawal of USD in Cambodia on my shiny new Starling card. The exchange rate was 0.25% away from mid-market. I thought the MasterCard rate was supposed to be better than that and it definately was when withdrawing SGD on the Halifax Clarity card. Biggest disadvantage is the £300 withdrawal limit from Starling.
I was very impressed with the speed of response. I hit enter on the ATM and my phone buzzed almost instantly with details of the withdrawal from Starling. Before the ATM responded.

As for Thailand, since Transferwise pay from a domestic Thai account, there should be no forex receiving fees. This is certainly the case in Singapore.  

Also you can change cash for 0.4% or less from mid-market at Bangkok Airport rail station, then pay it into your Thai bank account in somewhere like Silom Complex (open to 7:30 Or 8:00 pm). This is a bit primitive, but better than being screwed for 1.5% or more.  Many options.

At least FairFX are better than the banks, but my target loss for any forex transaction is ~0.5% and they do not get there.

As an investment, I am slowly warming to FairFX, since it is clear that even some people here are prepared to pay their fees, as long as they beat the bank.

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