SINGAPORE — The tedium of waiting in long lines to exchange foreign currencies at popular money changers in the Central Business District (CBD) got Mr Alstone Tee and Mr Tan Jin thinking of a business idea.

Why not let customers make an order online and then deliver the foreign currencies to them directly?

Feeling confident about their idea, the duo left their jobs as equity research associates at Morgan-Stanley last year (2016) to set up Thin Margin, Singapore’s first online money changer.

Their website - www.thinmargin.com - is due to launch soon, and will initially allow customers to exchange 15 types of currencies, from the greenback to popular Asian currencies like the Thai Baht, the Japanese Yen and the Korean Won.

After creating an account on the site, customers can select their preferred delivery time and date, and pay online for the amount they wish to exchange. Thin Margin will then deliver the foreign currency to their doorstep.

The earliest that they can fulfil an order is within two days. But the founders said they are striving to reduce the wait time.

Mr Tee, 29, says that the current two-day waiting period is “reasonable”, based on their market surveys.

He added: “It’s more about providing a good balance between value and convenience. On the extreme hand, you want convenience, you can get it at the airport for that convenience but you pay a lot (for that convenience), whereas we provide door-step delivery, you don’t have to queue at the ATM and money-changer, yet still get a competitive rate, and can take your time to pack your currencies at home.”

The duo declined to divulge the full range of their exchange rates, saying their site is not fully operational. But they stressed that Thin Margin’s rates would be more attractive than those found at Changi airport.

“We strive to have our rates be comparable to those in the CBD area, and most of the time, we are confident that we can beat the rates of the neighbourhood money changers and those at the airport,” said Mr Tan, 28.

Added Mr Tee: “We are trying to beat the majority of the neighbourhood changers. We cannot guarantee the best rates at all times … the reality is no one can do that as it is a commodities market, but we try our best to give customers the best value.”

Their site will also have a rate alert service, which notifies users when their preferred currencies can be exchanged at the rate they want. The two founders have plans to expand the range of foreign currencies available.

Aware that many potential customers might be hesitant about this new service, the duo assured that it is little different from regular e-commerce transactions.

“Just like when you purchase goods online, you make payment online then await delivery of your goods. Similarly, if you don’t get your (foreign) currencies, there will be recourse methods,” said Mr Tan. “We are also regulated by the Monetary Authority of Singapore (MAS), so this should give customers an ease of mind.”

MAS has placed Thin Margin in a regulatory sandbox as part of efforts to allow promising financial innovations to be tested and adopted in Singapore and abroad, within certain limits and duration.

Appropriate safeguards are in place to “contain the consequences of failure and maintain the overall safety and soundness of the financial system,” according to the MAS.

The central bank said in response to queries from TODAY: “In the case of Thin Margin, the potential risks are mitigated to some extent by measures that the company has put in place, such as the maintenance of a security deposit.”

In addition, the founders also said that delivery of the currencies would be handled by a team of couriers that has been carefully screened.

So far, they have received over 500 enquiries about their service. Mr Tee and Mr Tan say they are targetting customers in the HDB heartland. who might find it a hassle to travel to the CBD for better exchange rates.

“Those people who work in heartland areas, they really have no access other than asking their friends for a favour,” said Mr Tan.

“Our biggest strength is in aggregrating demands throughout the entire country, whereas most neighbourhood money changers are less efficient because they are bounded by their location”,” said Mr Tee.

He explained that for example, a changer in Simei might be stuck with a lot of Vietnamese dong that week if there is no demand for that currency in that area that particular week.