LumoXchange, a financial technology payments company headquartered in Little Rock, announced late Wednesday the launch of its currency exchange marketplace, which lets users choose their exchange rates and send money.
Although there are websites that allow users to compare exchange rates, no company has been able to combine the comparing of rates and sending money on a single platform until now.
Gov. Asa Hutchinson; Mike Preston, executive director of the Arkansas Economic Development Commission; and Little Rock Mayor Mark Stodola attended Wednesday's announcement at the Little Rock Regional Chamber.
LumoXchange is a graduate of the Little Rock Venture Center's 2016 FinTech Accelerator, which is sponsored by financial technology services giant FIS of Jacksonville, Florida, and the state. The startup moved to Little Rock from Atlanta after participating in that program.
Founder and CEO Maf Sonko compared his online marketplace to Hotels.com. Its users can view exchange rates from the company's international partner financial institutions and compare those rates, see customer ratings, select how their beneficiary will be paid and convert payments to local currency. Sonko claims users could save up to half on fees with LumoXchange.
He also said he bucked the trend by coming to a smaller city like Little Rock for the FinTech Accelerator. Sonko explained that he had already lived in several big cities but the company hadn't found the right place to put down roots.
"The relationship that I gained in Little Rock and the ability to make the connections I needed to facilitate global payments was extremely important ... coupled with the fact that it was very affordable to build a team here," he said.
For its initial launch, the marketplace will be available for payments to people in Gambia, Senegal, Mali, Ghana and Nigeria. Later this summer, it will add payments to the Philippines, which is the fourth largest payments corridor from the U.S.
This will give the company a total market of $17.5 billion annually in cross-border payments by the end this year, according to a news release.
LumoXchange is also expected to announce more partner financial institutions and payments to more countries in the coming months.
During a six-week pilot, the company said it processed 2 percent of total inbound payments to Gambia and achieved a 95 percent customer retention rate. Sonko has been working on the marketplace for the past 18 months.
LumoXchange works through networks of financial institutions in each country where it offers payments. Local financial institutions compete to convert inbound payments by offering competitive exchange rates and options to pay beneficiaries directly into their bank account, mobile wallet or in cash.