TransferWise

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TransferWise Limited

logo
legal form Limited (GmbH)
founding 2011
Seat London, UK
management Taavet Hinrikus (CEO)
  • Kristo Käärmann (CEO)
  • Roger Ehrenberg
  • Alastair Michael Rampell
  • David Bolling Wells
  • Ingo Jeroen Uytdehaage
Number of employees 2000+ (2020)
sales £ 179 million (2019)
Branch Financial services
Website https://transferwise.com/de

TransferWise Ltd. is a peer-to-peer online money transfer service for foreign currencies based in London - Shoreditch, founded in 2011 by the two Estonians Kristo Käärmann and Taavet Hinrikus . Investors include Peter Thiel's venture capital company Valar Ventures, Errol Damelin , Max Levchin , David Yu , Richard Branson and Andreessen Horowitz .

Business concept

International money transfers

TransferWise's peer-to-peer approach compared to traditional banks

TransferWise addresses problems in the financial world from which consumers suffer "painfully" when making international transfers: lack of transparency, high bank fees, long transfer times to arrival. In 2018, more than 200 million transfers were made abroad from Germany alone. Before founding TransferWise, today's CEO Kristo Käärmann was frustrated because he lost around 5% of the money transferred from his country of residence, England to his native Estonia , due to unfavorable exchange rates and bank fees from HSBC , and described this to Forbes as "scandalous". The same happened to his friend Taavet Hinrikus. Back then a Skype employee in London, he got his salary in euros and had to convert it into pounds every month . Käärmann got his money in pounds from his employer Deloitte , but at home in Tallinn he had to service a real estate loan in euros. Instead of transferring to the other currency area with the help of banks, they came up with a smart idea: Hinrikus sent his euros to Käärmann's Estonian bank account, which in turn transferred the corresponding amount in pounds to Hinrikus' account in Great Britain. This way they got their money much faster - and didn't have to pay any additional fees to banks or have their poor exchange rates forced on them. This agreement led them to develop a currency exchange service in 2011 to offer a cheaper alternative.

Since then, TransferWise has tried to undercut conventional banks in terms of price and waiting time for fees for international transfers with different sender and recipient currencies. The transfer fees on the main routes are between 0.3 and 1.5 percent of the transfer amount (depending on the currency route and payment method). TransferWise can realize this low-cost offer thanks to the so-called peer-to-peer concept . An example illustration can explain how it works: A consumer wants to send euros from Germany to Thailand, where baht should arrive. The customer sends their money to a TransferWise Euro account within the EU. TransferWise also has accounts in many other countries around the world. As soon as the euros have arrived, the money can be sent in Thailand, where TransferWise also has a local account and can therefore pay out the Thai baht to the destination account quickly and cheaply. In this sense, the euros do not leave any borders, as would normally be the case with a conventional bank via SWIFT transfers.

In addition to the local payment principle, the official exchange rate is used.

business development

In the first year, 10 million euros were transferred. TransferWise has been available in Germany since October 2013. In the first three years, TransferWise transferred one billion US dollars in customer funds; at the end of 2015 it was 700 million euros per month, according to the company itself. At that time the company had 400 employees. In 2020 the number of employees rose to more than 2,000. For the fiscal year ended March 31, 2019, profit after tax increased to £ 10.3 million.

The London-based start-up Revolut is one of the biggest competitors, alongside the traditional Western Union transfer service .

In addition to Great Britain, Germany is the largest market in continental Europe.

On May 18, 2020, a Swiss company was entered in the Swiss Commercial Register in the canton of Zug , as the Swiss market is one of the “most important and fastest growing markets in Europe”.

TransferWise product range

In addition to the classic money transfer from bank account to bank account, there are a few other products that TransferWise offers.

Multi-currency account

Screenshot: Overview of credits in several currencies

Transferwise offers multi-currency accounts , also called borderless accounts in English . As the owner of such a multi-currency account, you have credit in several different currencies. TransferWise normally only verifies identity. Proof of a place of residence is only required in individual cases.

For some currencies you can get bank details with an individual account number, so that you can receive transfers from the respective countries in the corresponding national currency. This avoids the usual bank charges or unfavorable exchange rates for an international transfer. As a customer, this opens up the possibility of having bank details outside of their country of residence. Are available:

  • Australian account number with BSB code, for receiving local payments in Australian dollars
  • British account number with sort code, for receiving local payments in British pounds
  • European IBAN, for receiving payments in euros
  • Polish account number, for receiving local payments in Polish zloty
  • US account number and routing number, for receiving payments in US dollars
  • New Zealand account number for receiving local payments in New Zealand dollars

The account you get a MasterCard - debit card which Google Pay support and the payments to POS terminals and online shops are possible without card fee when the multi-currency account having sufficient credit balances in the respective currency.

This combination gives a customer residing in Germany but not residing in Great Britain , for example , the option of receiving payments in British pounds and spending all of this money on site in Great Britain without paying any fees.

A change of credit from one currency to another currency takes place at the mean exchange rate, i.e. the mean value of the current exchange rate on the financial markets, but TransferWise usually charges 0.4% of the exchanged money as an exchange fee.

The multi-currency account differs from a conventional bank account in that there is no deposit protection for the former in the event of bankruptcy .

TransferWise for Banks

In addition to the traditional customer base (private and business customers), TransferWise also offers solutions for banks. They can integrate the TransferWise API into their own IT system and save development costs. In return, their bank customers can benefit from the favorable and transparent exchange rates without having to register separately with TransferWise.

The following banks already have a partnership with TransferWise:

Customer satisfaction

When it comes to customer satisfaction, TransferWise seems to be making a good impression. In July 2019, the company received the TÜV seal with an overall grade of 1.6. The customer survey was carried out with 1,980 participants, with an overall satisfaction rate of 85%. The extensive TÜV online survey has u. a. Obtained assessments of reliability, level and transparency of fees, duration of the transfer, customer service and handling of complaints. It turned out that there is the greatest need for improvement at the level of complaint management. In addition, 89% of customers state that they are very satisfied with TransferWise and actively recommend it to others. The vast majority were positive about the duration of the transfer.

TransferWise Offices

Since TransferWise operates internationally, the company also needs different global locations. More than 2,000 employees are spread across 14 offices:

Web links

Individual evidence

  1. ↑ a b c d TransferWise looking for a partner. In: Gründerzeit (Berliner Morgenpost). December 23, 2015, accessed January 30, 2016 .
  2. ↑ Mirjam Hecking: Transferwise: The startup that Richard Branson entrusts millions. In: manager magazin. June 10, 2014, accessed April 27, 2020 .
  3. ↑ Ben Horowitz: Learning from My Mistakes. In: Andreessen Horowitz. January 27, 2015, accessed April 27, 2020 (American English).
  4. ↑ a b c d Why do transfers take so long? In: Youtube. Galileo (ProSieben), December 2, 2019, accessed on May 2, 2020 (German).
  5. ↑ Jeff Kauflin: Here's How TransferWise Has Nearly Quadrupled Revenue In Two Years, Reaching $ 151 Million. In: Forbes. October 9, 2018, accessed April 27, 2020 .
  6. ↑ "Too many companies are bloated with cheap money" - Transferwise founder Taavet Hinrikus in the FinanceFWD podcast. In: FinanceFWD. November 20, 2019, accessed May 2, 2020 .
  7. ↑ Niklas Hintermayer: LIMITLESS GROWTH. Forbes, February 7, 2019, accessed May 2, 2020 .
  8. ↑ Martin Bryant: Transferwise Handles $ 13.4m in its First Year. In: TNW. February 28, 2012, Retrieved April 27, 2020 (American English).
  9. ↑ "Skype for transfers" starts in Germany. In: sueddeutsche.de. October 21, 2013, accessed September 6, 2018 .
  10. ↑ Niklas Wirminghaus: The payment startup that Peter Thiel and Richard Branson entrust their money to. In: Gründerszene. June 10, 2014, accessed April 27, 2020 .
  11. ↑ Annual report and consolidated financial statements for the year ended March 31, 2019. TransferWise, September 6, 2019, accessed May 2, 2020 .
  12. ↑ eSHAB. Retrieved May 18, 2020 .
  13. ↑ Fintech: Revolut competitor Transferwise founds Swiss company. Retrieved May 18, 2020 .
  14. ↑ https://transferwise.com/de/borderless/
  15. ↑ https://transferwise.com/de/help/20/verification/2949782/wie-funktioniert-die-verification-bei-transferwise
  16. ↑ https://transferwise.com/de/borderless/
  17. ↑ https://transferwise.com/de/mid-market-rate
  18. ↑ https://transferwise.com/terms-of-use-eea
  19. ↑ What is TransferWise? - bunq Together. Bunq, accessed May 2, 2020 .
  20. ↑ Send money abroad with Monzo and TransferWise! Monzo, accessed May 2, 2020 (UK English).
  21. ↑ Natixis Payments et TransferWise s'associent pour offrir aux clients des Banqu ... Groupe BPCE, accessed on May 2, 2020 (French).
  22. ↑ International transfers with TransferWise - N26 The mobile bank. N26, accessed May 2, 2020 .
  23. ^ TransferWise · LHV. LHV, accessed on May 2, 2020 .
  24. ^ Integrate Novo with TransferWise. Novo, accessed May 2, 2020 .
  25. ↑ TransferWise. Stanford Federal Credit Union, accessed May 2, 2020 (American English).
  26. ↑ a b c TransferWise for Banks launches in Portugal with Activo Bank. TransferWise, March 2, 2020, accessed May 2, 2020 .
  27. ↑ TransferWise receives TÜV seal with an overall grade of 1.6. June 9, 2017, accessed on May 2, 2020 (German).
  28. ↑ Offices. TransferWise, accessed May 2, 2020 (American English).