eToro – innovation through partnerships
Background
Since its launch in 2007 eToro’s mission has been to make trading accessible to anyone, anywhere, and offer alternative options to traditional financial institutions. True to this mission, eToro wanted to expand from being a trading platform to providing day-to-day withdrawal and spend functionality for its 25 million market-savvy customers.
But that was just the start. This would be the ultimate ‘sticky’ product, an eToro card giving its customers the ability to connect to their eToro investment account and spend anywhere in the world with market-leading FX rates that were the same when they made a purchase as they were when the funds settled.
Challenge
eToro: Fixing the FX problem for its customers:
eToro wanted to offer a more complete set of financial services for its customers. However, for a client-base as financially savvy as eToro’s, launching a traditional card in a traditional way was not going to work.
Real-time rates, like their customers are used to with their investment purchases, was essential. In addition, eToro needed added flexibility to manage the FX, implement multi-currency settlement, and to create a low-fee value proposition for their investors to use their card abroad.
For eToro to develop this on their own would have required a lot of investment, both initial and ongoing, taken too long to get to market, and likely would not have been as seamless to operate.
eToro wanted to give their customers a market-leading solution they’d love, with:
- A Visa debit card connected to a user’s eToro investment account that would allow them to manage their investments and funds all in one ecosystem;
- The ability to spend and withdraw funds with their eToro card anywhere, with no fees and market-leading FX rates when using the card abroad;
- A real-time payment notification for app users in their home currency, and that amount not changing between the time of the transaction and settlement.
The problem eToro wanted to solve for themselves:
For eToro, they needed a solution, in the form of eToro Money, which would provide:
- Growth and retention of customers through an expanded, innovative product offer;
- Multi-currency issuer settlement without the traditional overheads;
- Real-time FX rates and direct settlement to Visa;
- Removed the costs and burden of setting up and maintaining multiple nostro banking relationships (an account that a bank holds in a foreign currency in another bank) by using Currencycloud’s existing relationships;
- An opportunity to monetize FX revenue.
Solution
eToro: visionaries of a market-leading issuer FX proposition
eToro wanted to present its customers with a compelling proposition, but they also envisioned a solution that would be less complex for them to manage than the infrastructure traditionally required for multi-currency issuer settlement.
An innovative idea like eToro Money would involve significant capital expenditure, time and manpower to build in-house. Currencycloud with its partners Visa and Tribe Payments formed the team who would co-create the solution eToro needed.
Currencycloud: enabling real-time FX & direct settlement
It was not only an innovative idea, the approach taken to make eToro’s vision a reality was also groundbreaking. It would be the first time Currencycloud collaborated with its partners Tribe and Visa to deliver a real-time multi-currency card solution.
Currencycloud, Visa and Tribe proposed a more easily consumable solution, where the issuer, eToro, utilizes an underlying infrastructure that has been pre-built instead of having to build, own and maintain it.
Currencycloud’s solution automates eToro’s FX execution and does it in a way that is easy to manage. This means eToro can provide the real-time, competitive rates for its users for each transaction and that real-time FX rates are pulled through Currencycloud APIs via Tribe’s integration layer.
The eToro Money Visa debit card enables its customers to instantly access their funds and spend anywhere, anytime whilst receiving highly competitive exchange rates (the interbank rate with a transparent 0.25 or 0.5% markup and no hidden fees).
Visa: giving clients more control
eToro has the responsibility for sourcing the exchange rates, and settles via a bespoke multicurrency set up through Visa. This way of working gave eToro a more streamlined and flexible experience. It ensured eToro Money users received the same FX rate (real-time FX) at settlement as it was disclosed at the time of the transaction. At the time of eToro’s proposition, various iterations of this were in existence, but not all together. This was a first
And this innovation is in addition to the value and security of presenting eToro users with a Visa-branded debit card, accepted all over the world.
Tribe Payments: bringing it all together
There were many moving parts getting eToro Money launched. Tribe were, and are, instrumental in ensuring that all these moving parts work seamlessly. eToro uses Currencycloud and Tribe to deliver the rate to the eToro Money customer. It was a complex problem to solve, yet Tribe did it, maintaining regulatory requirements, currency localization and individual ledgers – connecting multiple sources into them.
Tribe deliver the transaction processing system and is instrumental in ensuring that every element of it works seamlessly. Tribe provides the underlying tech on behalf of eToro, then embeds it into the card payment processes and represents a more complete, whole product back to eToro. Through integration with Currencycloud APIs Tribe is able to pull the FX rates whenever an eToro card gets used in a foreign currency.
Results
The eToroMoney solution was delivered in a matter of months. Despite the impact of COVID-19 on global travel, the solution went into beta in 2021 and since then eToro has issued 37 000 cards; processed 470 000 card transactions, amounting to £37.4 million . All this, while eToro has not yet actively promoted this card as they are waiting on the addition of its rewards benefits functionality eToro Money, is currently live in 19 countries.
