FinTech profile: TransferWise
Transferwise was established in 2010, based around a vision of making international money transfers cheap, fair and simple. However, as is the case with many pioneering businesses, there is more to the story than that.
Wanting to overhaul the international money transfers system, founders Kristo Käärmann and Taavet Hinrikus came up with the concept for the businesses after realising they were losing out to fees when transferring money home, to Estonia, from the UK.
The answer to their problem became Transferwise, a concept built around three core beliefs for sending money:
- that it should be low cost and fair - Transferwise uses only one fair exchange rate and gives one upfront fee
- that it should be simple - everyone at the company is dedicated to a process that it claims is simple, watertight and offers "bank-level security, minus the banks"
- that it should be fast - log in, sign up and send. That's the premise behind Transferwise's process, with the company adding that 'most' transfers happen the same day
Transferwise works off of the bank transfer rate of the day, offering the best possible rate across 750 currencies. When users can send a payment, they receive the real exchange rate and low fee already mentioned. A business account option also exists, which allows companies to send, spend and receive in multiple currencies.
The company also offers a Borderless Account to complement existing services. This multi-currency account is pitched at travellers, expats and freelancers, for whom it allows spending in any currency and the sending and receiving of money for free from the user's own foreign currency account. This, it claims, can be done "on average 8x cheaper than leading UK banks".
CNBC reported this week that Transferwise’s annual revenue totalled to £302.6mn in the financial year ending in March 2020. This is up nearly 70% in comparison to last year. Another notable milestone for the company was its most recent valuation of $5bn back in July.
