TransferWise is an excellent example of the innovation that can be found in the financial sector. To be exact, it is a business that helps people send and receive cash over international borders, which can be a rather expensive process using traditional methods. Given recent results, it seems clear that TransferWise has the potential to become something outstanding, which is perhaps unsurprising considering how the world is becoming more and more inter-connected.
Here are 10 things that you may or may not have known about TransferWise:
1. Founded By a Pair of Estonians
TransferWise was founded by a pair of Estonians who worked in the United Kingdom. One is Kristo Käärmann, who was a financial consultant. The other is Taavet Hinrikus, who might be known to some people as the first employee at Skype.
2. The Pair Had Personal Experience with the Problems of International Money Transfers
Unsurprisingly, the two had a fair amount of personal experience with the problems that can come up with international money transfers. For example, Hinrikus has stated that he was losing 5 percent of his cash whenever he made a transfer, which is a horrendous sum by any measure. Likewise, Käärmann was losing money as well with each transfer, which was particularly problematic for him because he was attempting to pay off a mortgage in Estonia.
3. The Pair Came Up with a Personal Arrangement
In time, the two came up with a personal arrangement to provided each one of them with what they wanted. Basically, since Hinrikus was paid in Euros rather than pounds, he would put Euros in Käärmann’s bank account so that Käärmann could make his mortgage payments. Meanwhile, Käärmann would put pounds in Hinrikus’s bank account in the United Kingdom, thus enabling the two to avoid the high costs of currency exchange.
4. The Business Was Inspired by the Personal Arrangement
Nowadays, the two use a similar process to help TransferWise customers perform international money transfers at a lower cost than otherwise possible. Traditionally, international money transfers see the money being converted into the right currency before being put into the bank account of the intended recipient. However, TransferWise avoids the currency exchange by redirecting transfers of equivalent value in the right currency.
5. Received Millions and Millions in Funding
TransferWise showed a fair amount of promise. As a result, it was able to secure $1.3 million in funding from various sources, with some being venture capitalists and some being executives in the financial sector. Later, as it continued to prove its value, it managed to raise further millions, with the result that it had managed to raise more than $100 million in funding by 2016.
6. Has Become Profitable
Said promise seems to have been fulfilled. After all, TransferWise has announced that it has become profitable in 2017, which is a significant step in a business’s life-cycle. This can seem minor, but for bigger businesses, it is not uncommon for them to take years and years to reach the point of profitability.
7. Transfers a Significant Amount of Money On a Regular Basis
Unsurprisingly, this profitability means that TransferWise transfers a lot of money between people in different countries on a regular basis. In fact, it revealed in 2017 that its customers were transferring a billion pounds’ worth of value on not an annual basis but rather on a monthly basis, which is an interesting indication of its popularity with people who have become fed up with the costs of international money transfers.
8. No Longer Transfers BitCoins
It is interesting to note that TransferWise allowed the transfer of BitCoins at one point in time, which is no longer possible. Said business has stated that this happened because of pressure from its banking providers, which is perhaps understandable considering some of the complications that have come into existence because of the use of BitCoin.
9. Has Released Misleading Marketing
At one point in time, TransferWise has released marketing that was considered to be misleading by the relevant authorities. It claimed that it could help its customers save 90 percent compared to the banks, which was not as accurate as it should have been. Rather, an independent website stated that TransferWise tended to produce average savings of 83 percent, which could reach 90 percent in some cases.
10. Moving to the Continent
TransferWise has a number of offices in a number of countries. Previously, its headquarters for Europe was situated in the United Kingdom. However, Brexit has created a serious problem for its operations as it has for a wide range of other businesses, with the result that it has announced its intentions to move its headquarters for the region to the continent.