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Building a Moat in Foreign Exchange

OzForex’s low-cost, online business model could prove to be a meaningful market disruptor, and the shares look like a bargain today.

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Nathan Zaia: OzForex was listed on the Australian Stock Exchange in 2013, and it operates in international money transfer and foreign exchange markets. The key difference between OzForex and the traditional players--such as the banks, Western Union, and the smaller stores you see in your mall or at the airport--is that OzForex has no branch network. It's purely an online business. So, utilizing this low-cost business model, OzForex offers its customers two key benefits: speed and price. And there are also the additional advantages that come with most online businesses, allowing a consumer to transact anywhere and at any time.

So, given our positive view and belief that OzForex and other first movers like HiFX, WorldFirst and Xoom will prove to be meaningful market disruptors, we assign OzForex a positive moat trend.

Nathan Zaia does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.