Dollar: why the gap between purchase and sale price in digital banks is half that in traditional banking
The Argentine custom of saving in dollars showed a renewed version at this time: in addition to the Home Banking of the traditional banks, which motorized 90% of the operations, its 100% digital competitors entered the scene with a rather aggressive offer.This new platoon of companies offers better prices:
- Up to $ 3 less for purchase and $ 2 more for sale compared to traditional banking
- In addition, they have the smallest difference between both quotes (spread)
On Monday, in the middle of the explosion of the exchange rate, the Fintech were not safe from the shock wave: the consultations quadrupled. It was the first "4.0" exchange stampede they had to face.
Thus, digital banks (such as Brubank and Rebanking, which offer forex trading) and online exchange houses (such as Dollar Store, IB Exchange, Balanz or Bull Market) recorded "crashes" in their apps.What surprised many was the wide gap between the buying and selling points, just after the STEP. "Having no value, we put a very large spread of about 10 pesos, between $ 65 and $ 55. We had to cover ourselves," they point out to iProUP from an entity that operates 100% online.
"This is how the market is ironed, because with a large spread the one who buys does not know if it is high and the one who sells does not know if it is cheap," adds the source that asked not to be mentioned.
The fintech became a source of permanent consultation of the Argentines, who have shown some indecision before the speed with which the boards were updated the first two days after the STEP. "This week we increased traffic four times. But the level of operations was lower than it was before, with a decrease close to 10%," they say from Tienda Dollar.
Such a situation was a mirror of the one experienced by the banks. "There was a peak on Friday, before the elections. In the following days the amount traded fell and now began to recover," they reveal to iProUP from a major Spanish capital entity.
Similarly, two virtual exchange houses that inform the Central Bank assure the media that operations are picking up. In both cases, they aim their competitive strategy to provide the most convenient price and the smallest spread in the market.The secretThe difference in price between fintech and banks is due to the fact that, based on a much smaller cost structure, the commission of digital players is reduced from 5% to less than 2%.
That is why resorting to these digital companies as intermediaries in the exchange market results in savings that individuals and families must size according to the frequency and volume of their transactions.
This, in addition to the advantage of not having to move from their homes and be able to operate 24 hours a day. In some cases, transferring from the Home Banking to the broker account and then buying and turning the dollars back to the bank.
If you consider the fintech published on the BCRA website:
- The difference between the price and the market average in some cases exceeds $ 2 per dollar
- In the purchase, the gap in favor of fintech ranges from $ 0.40 to $ 1.10 per unit
- In banks and digital exchange houses, the gap is only $ 2 to $ 3, while in traditional entities it reaches up to $ 7 (this must be taken into account by the saver)As for the hours of greater movement, from Tienda Dollar they assure iProUP: "In the morning it is usually much more moved than at noon. As there is little volume, an operation of US $ 500,000 can strongly modify the price. at 12 o'clock it tends to stabilize. "
According to sources consulted by this means, the average amount is between US $ 200 and US $ 500 for natural persons and climbs to US $ 30,000 in that of small and medium enterprises.How to operate
Digital companies request basic requirements to operate. In several, for the opening of the account - 100% online - they only require personal data and a selfie with the ID in hand, they stand out from BullExchange. In the case of Balanz Capital, the process of opening an account is paperless, although it requires biometric identification.
Complied with these requirements, the person can transfer pesos from any account, perform the exchange operation and send dollars to the savings bank in foreign currency that he has in any entity.Whoever chooses this option must meet the requirements of the Financial Information Unit (FIU), which vary according to the amounts:
- Those who operate up to $ 200,000 annually will only have to report their personal data, including CUIT and nationality
- If it rises to $ 800,000, you must add a photo of the ID
- From that level, you must add documentation proving the origin of the fundsThe proposals
Daniel Vicen, from Balanz, tells iProUP: "We now offer the possibility of buying and selling 24 hours a day, 7 days a week, through our app." The executive adds that the company provides an average savings of 2.5%, if its price is compared with those of banks or exchange houses.
"Statistics indicate that Balanz has offered the best prices in the market, exceeding bank offers, including the Nation's," he says."The volume operated daily is around one million dollars," says Vicen. And he adds: "Since we started as agents of change, we have become the only ones in this activity included in the quotation page of the Central Bank."
"Our goal is to provide this service in a country where buying dollars, historically, has been the way to save. So, our competitive strategy focuses on giving the cheapest price," adds Vicen.
"Experience indicates that the retailer wants to see the tickets, or at least have them credited in the act in his bank account. Therefore, the operations are 'in mirror': the money leaves an account in pesos, the purchase operation and the dollars are transferred, "says the executive.
"We work with the 7x24 modality. That is to say, we are always open and we take into consideration the price of the last closing", completes the Balanz executive.
Another relevant competitor is Bull MarketBrokers, which developed a similar solution: Bull Exchange. This company records its prices on the page of the Central Bank and, since its appearance, shows a growth of more than two monthly digits in the number of new accounts, users and operations.In this case, the premise is to offer the lowest spread in the market. We aim to be forever below the selling tip of Banco Nación. The idea is that anyone can operate in just 5 minutes and get the best market price, "Ramiro Marra, director of the firm, tells iProUP.
"The first five or six days of the month, twice as many transactions are made as the rest, since that is when the public charges and goes out to get tickets," says the executive, who adds that a distinctive aspect of his company is accreditation automatic
"One sends money and automatically arrives to your account, without giving further details about the transfer. Proof of proof is also not required. It is credited from the CBU and CUIL numbers," Marra completes.
Meanwhile, IB Cambio, which, together with the previous ones, quotes daily on the BCRA online board, boasts of being the first fully digital exchange agency. It operates exclusively by bank transfer and with accreditation periods of 24 to 48 hours, in a fully automated manner.
For its part, TiendaDólar already carries out about 11,000 transactions per month. "The system is very simple: we combine supply and demand like any marketplace," says Martín Nagelberg, CTO of the company.The difference between this platform and fintech is that it has higher legal requirements to register users. "They ask for more forms, an app, expect them to validate the ID and other issues, while our onboarding is immediate," he concludes.