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TransferWise announces $280M investment
- rglover 9y agoLiterally just used TW to pay an international contractor in ~30 seconds. From a customer standpoint, this is great news. Well wishes to these folks.
- a_d 9y agoI used to study remittance flows for a living. This was a problem that was (is?) begging to be solved. Incumbents like Western Union have always been very expensive and borderline evil. There are well known “corridors” of remittance flows that are still yet to be captured - like Kerala (India) <> Saudi Arabia (Middle-east more generally); Mexico <> US; US <> LatAm etc. My guess is TransferWise captured the UK<> Poland corridor and expanded from there. This problem is a great one to solve because the customers have a real pain and one can be very targeted about capturing high-value corridors. I wish TW the best. Lower fee, Lower friction, Lesser time == Great for customers! Anyone looking to build a startup in this domain should start here: http://www.worldbank.org/en/topic/migrationremittancesdiasporaissues/brief/migration-remittances-data http://www.worldbank.org/en/topic/migrationremittancesdiaspo... (This data is useful to understand origin<>destination of remittance flows; Its a greater than $150B market and a lot of untapped/Uncaptured areas; lots still left to do!)
- gedrap 9y ago> TransferWise captured the UK<> Poland corridor and expanded from there. Close! They started with UK <> Estonia, both co-founders are Estonians. IIRC in the very very early days, the whole settlement was done by users themselves over a Skype group.
- kreetx 9y agoYou are right, but the Poland corridor was probably the key to proving the model though.
- ido 9y agoWhy would either be lucrative? AFAIK within the EU bank transfers are free of fees.
- occamrazor 9y agoI think the exact rule is this: International bank transfers denominated in EUR below 50.000 EUR can’t have higher fees than domestic transfers. FX fees and spread can still remain.
- gondo 9y agoexchange rate
- glebedel 9y agoNot if using different currencies. high fees and/or abusive exchange rates.
- killedbydeath 9y agoPoland has 30x the population and likely 30x the number of immigrants to the UK.
- makomk 9y agoWithin the Eurozone bank transfers are generally free of fees, but banks still like to rip people off on exchange rates between different currencies and the EU doesn't seem interested in doing anything about that.
- 2K17 9y agoI wish someone would challenge other dinosaurs like PayPal. Say what you want about Amazon's monopoly but at least they have actual customer support.
- ddorian43 9y agoPaypal also has support (call,email) used them for refunds and changes on account.
- 2K17 9y agoI haven't seen the refund one. Do you have it? All I could see is the ticket system where issues are closed by support rather than user.
- ddorian43 9y agoShould be able to try for a refund on a payment until 6 months old.
- JoshTriplett 9y agoHaving had a recent experience with that, their "support" is utterly incompetent. Made a donation to a charitable organization (same one I've made in a previous year), PayPal reversed it without giving any reason, I contacted their support trying to find out why, and several hours later they could tell me nothing more than what the website said: that it was rejected and no reason was given, and I should try using some other method to make the transaction. (They also referred me to an email address for another department, who had no phone number, and that email produced no answer for a week, after which they gave the same non-answer.)
- 2K17 9y agoI think maybe payers are the product here not customers.
- 9y ago
- thisisit 9y agoI have zero experience in remittances, so I could be wrong but the whole model seems very capital intensive. It needed ~ 1 billion dollars worth of transactions to turn a profit. [1] [2] Isn't that supposed to be a bad idea, specially for software based companies. [1] Transferwise model: https://en.wikipedia.org/wiki/TransferWise#/media/File:TransferWise_peer-to-peer_money_transfer.png https://en.wikipedia.org/wiki/TransferWise#/media/File:Trans... [2] The company started back in 2011. And select quotes from the article: > A source close to TransferWise, which has been profitable since early 2017, tells me the new funding values the seven-year old company at $1.6 billion. and, > The company now serves over two million customers and offers 750 currency routes, seeing customers transfer more than £1 billion every month.
- mseebach 9y agoThat's not what capital intensive means[1]. A company that has low margins as its business model necessarily needs to have a large body of transactions to get much revenue. Six years to get profitable is not really a remarkable period for a VC-funded company. 1: It means requiring lots of capital to get set up, eg. because you need to aquire expensive assets to run your business. Buying your own hardware is more capital intensive that running cloud, even if the latter is possibly more expensive in the long run.
- thisisit 9y agoYes. Sorry, incorrect choice of words. So the question is if the margins are so low that they need a billion dollars to make a profit, what kind of scale do they need to be worth a billion dollars. And it somehow it makes me question their business model as well. Sooner or later they will be tempted to raise fees and get more profitability.
- raverbashing 9y agoThey don't need to sell a billion dollars, they need to move a billion dollars And yes, they might increase their fees when they get bigger, still, if it's smaller than what the banks charge, it's a win (However, since money movements are not balanced they still need to "move back" some of it so they can settle their accounts - but I guess they already have some bulk currency buyng/selling bank to do that)
- afarrell 9y agohttps://www.wave.com/ https://www.wave.com/ is tackling the US/UK/CAN <-> East Africa (and apparently now Ghana?) corridor
- dovdovdov 9y agoIt's clearly a service mostly depending on eastern (central) european migrants working in the UK. I wonder if brexit doesn't fall through what will it do to their single leg business. And even if brexit fails, these people will become less and less dependent of their home country. (moving close family to the uk, paying off mortgages) So yeah, my point is these untapped areas can dry off quick. (I'm talking a decade maybe) Or there are stupid investors who don't want to invest into this no-brainer goldmine. :)
- richardknop 9y agoIt started as that but it has expanded since. There are lots of people using Transferwise all over the world now. People going to vacation or living in Japan, for example, can save money by using TW.
- Dobbs 9y agoI use transferwise for US => UK. It also seems to be the most widely recommended of the services in the expat community.
- riffraff 9y agonot just the UK, this is the same pain point for everyone when interacting between Euroland and the rest of Europe too. Germany + France + Italy + Spain have _a lot_ of people sending money to non-euro countries. EDIT: this could dry up quickly anyway though. My bank charges idiotic amounts to change and trasnfer money, I doubt there is any technical reason they must, they can get to TW level trivially, it seems, they just don't care enough.
- saas_co_de 9y agotransferwise has great rates all over the world but not sure how dependent they are on UK market.
- briandear 9y agoI use them to move money to/from Europe, The US and Mexico. I used a competitor a year ago. My point is that their business seems to be far beyond a significant Brexit risk. If they gain inroads in the US Mexican/Central American community, the UK-Eastern Europe segment will pale in significance.
- NetStrikeForce 9y agoIt actually got most of the GBPEUR, not just for Poland.
- chillydawg 9y agoIt might have got most of GBPEUR retail, but the vast majority of that flow by volume is traded in placed like Interactive Brokers, or over the phone between guys who need to swap a few million here and there.
- NetStrikeForce 9y agoFair enough, yeah. I only had retail in mind :)
- charlesdm 9y agoIn general, banks do charge excessive fees on exchanging currencies. For example, if you want to exchange €1,000 to $ or £, they'll charge you (by default) a 2.5-5% conversion fee. After negotiating with them, you generally get it down to 0.3%. These days, I convert through my broker, because they only charge me 0.2% for FX conversions.
- consz 9y agoIt's insane, borderline criminal. I knew someone who wanted to convert ~1m AUD -> USD -- and the banks were still trying to offer to do at 2-3% ! At that amount, you can open a brokerage account and trade through EBS or CNX directly and pay basis points.
- charlesdm 9y agoOf course they would. Most people don't understand how the fee structure works, so will comply. You can open up a brokerage account at Interactive Brokers with a few thousand and use it to exchange FX. It's pretty accessible.
- consz 9y agoI agree, most people are just not aware. I like the machines I've seen in airports and train stations that offer currency conversions. They have 'No Fees! No commission!' posted all over them -- ignoring the fact that the bid-ask spread they're charging is 15-20%. Again, criminal.
- charlesdm 9y agoSad but true. :( That said, people do pay for convenience, which I assume is the main function of those cash machines. If I end up in a foreign country that I haven't visited before, I'll likely withdraw some cash (not much) from one of those machines just to be safe. You never know when your credit cards might stop working.. (I've had my main card blocked randomly while travelling and it frankly was a pain)
- mandeepj 9y agoFor me, Transferwise is still very expensive. I use ICICI bank to send money to India and it goes straight to recipient bank account in less than 2 hours along with market rate (xe.com)
- dgaaaaaaaaaa 9y agoDoesn't ICICI quote at least 2 rupees higher than the market rate? I have only sent money from INR to $
- mandeepj 9y agoIt is still very cheaper than rest of the herd
- JoshTriplett 9y ago> Incumbents like Western Union have always been very expensive and borderline evil. I'd be interested in more information on this; what kinds of things have they done?
- alexee 9y agoI wish they would issue credit cards soon. Every time I pay with credit card while travelling, my bank charges 1.5% for each transaction, in addition to bad conversion rate.
- tomseldon 9y agoIf you're in the UK, have a look at Monzo. Not a credit card, but very useful to use abroad. They don't charge a transaction fee when abroad, and the currency conversion is tracked to the MasterCard rate (whereas other providers tend to do card issuer + their own cut on top). Result is it's very cheap to use abroad. :)
- marcosscriven 9y agoUnfortunately, from the 18th December, that's stopping: https://monzo.com/blog/2017/10/17/atm-limits-announcement/ https://monzo.com/blog/2017/10/17/atm-limits-announcement/
- richardknop 9y agoIt's only for ATM withdrawals. If you are in first world country where card payments are well integrated this is not issue for you. Granted, in many developing countries you need cash so this will be issue.
- marcosscriven 9y agoMy use case is frequent trips to Sydney for work - a surprising number of cafes and restaurants there are cash only.
- richardknop 9y agoHmm, that's surprising. I have traveled a lot in Asia (never to Australia though) and from that experience I know a lot of Asia is still cash based but Australia I'd expect every coffee / convenience shop to accept Visa/Mastercard.
- seanalltogether 9y agoTransferwise has been a godsend for me the past couple years as I've been moving my life to the UK from the US. XE was bought out awhile ago and hiked their fees up, while banks like HSBC have always had high rates to begin with. Although I'm wondering if jumping on a bitcoin exchange like GDAX to go from USD -> bitcoin -> GBP would be even cheaper these days?
- javindo 9y agoWith the ever increasing price of BTC you could even end up inadvertently making a small profit on the transaction. That being said, with the volatility of it you could also lose all of your money in an instant.
- deleted 9y ago[deleted]
- rb666 9y agoFrom Trumpland to Brexitania, you just like a challenge?!
- mcjiggerlog 9y agoSame here whilst moving from the UK to Spain. Also, their borderless accounts are a lifesaver when working with international clients.
- ivm 9y agoUS -> Chile is also amazing despite the $3000/mo limit. Chilean banks are dinosaurs, especially when it comes to international transfers or freelancing.
- phillc73 9y agoJust to add another data point, TransferWise have been the single most useful financial service for me over the last three years. In 2000 I moved from Australia to the UK. Transferring money between AUD and GBP accounts was always a bit painful. The banks charged too much and took too long. I even signed up with a dedicated forex trading firm, but at the time they did not offer an online service, so there was still enough friction with phone/email to limit my use. Three years ago I moved to Central Europe and acquired a EUR account. Soon after I discovered TransferWise and have used it regularly ever since. It works, it's cheap and it's fast.
- autopoiesis 9y agoCan anyone say how TransferWise compares to CurrencyFair?
- lgbr 9y agoI've found TransferWise to be slightly more expensive than CurrencyFair, however TransferWise is capable of US <-> EU transfers in both directions, whereas CurrencyFair can only handle EU -> US (I believe because CurrencyFair does not yet have a presence in the US).
- cprecioso 9y agoFor everyone that's interested in TransferWise, I'd recommend Revolut ( https://www.revolut.com/ https://www.revolut.com/ ) instead. They have no fees for transactions or currency changes (up to a quite high limit), as well with a lot more features (international prepaid MasterCard that charges no fees ever being my favourite one, and you can go to ATMs for free as well). I've been a happy customer of them for quite some time and I have absolutely nothing bad to say about them, but the opposite.
- yladiz 9y agoI researched this recently, as they both seem to cover similar markets, but they are not targeting the same market. Revolut is more like a “traditional” bank, whereas Transferwise is a remittance service, generally bank account to bank account. Some people don’t want a new bank account and just want to transfer money, so Transferwise is a better fit for them.
- cprecioso 9y agoWell, it's not really a bank account but a kind of "wallet", and the setup process reflects this (having gone through N26's, bunq's and Revolut's, definitely Revolut's is quicker and less fussy). However, they do provide you with personalized IBAN numbers to top up your wallet, which really blurs the difference between those two concepts. And BTW, Revolut also supports bank account to bank account transfers in multiple currencies.
- chillydawg 9y agoFor holiday money, Revolut is #1, zero question. But if you need to move £1m from a house sale when emigrating, then it may not work so well.
- toomuchtodo 9y agoI'm on Revolut's waiting list to get access as a US citizen, but TransferWise turned on my Borderless account immediately. Really looking forward to trying them, but they're constraining their user base artificially at this time.
- 9y ago
- monkeydust 9y agono surprise. good product. just trying out their borderless account for EUR->GBP. A fair whack cheaper than transferring into my Natwest account.
- monkeydust 9y agoAlso for holiday money where I need a card I use www.weswap.com - great product.
- graniter 9y agoI don't understand what TransferWise offers beyond what PayPal does. Why not just send yourself money using 2 PayPal accounts? Are they cheaper or faster?
- dboreham 9y agoYou might also consider "more legal" as a factor. I don't believe PayPal wants you to have two accounts with different currencies.
- graniter 9y agoOk. But what would be the problem? If you legitimately have two bank accounts in two countries in two different denominations, what's the problem with having two different PayPal accounts connected to the different bank accounts? I don't know what would be illegal about that.
- dboreham 9y agoIt would correlate strongly with people trying to evade taxes and/or launder money. PayPal doesn't like to facilitate illegal activity. I'm not theorizing about this -- I have first hand knowledge.
- graniter 9y agoOk I am not trying to be dense. I really am curious. Maybe it correlates strongly, but there's nothing dishonest or illegal about it that I can tell. PayPal has all your personal info. They have your bank account info on both sides. People transfer money between. So maybe it's a pattern that money launderers use, but so do regular people. What am I missing?
- bckygldstn 9y agoPayPal isn't obliged to accommodate all legal banking patterns. If 1% of all customers are fraudulent but 5% of customers with multi-country bank accounts are fraudulent, that might be enough to tip their risk/reward balance. And I've dealt with this first hand. I have paypal accounts and legal bank accounts in multiple countries, and when I've tried to move money between them I get a call from customer service saying they blocked the transactions, and "you're not supposed to do that with paypal".
- fapjacks 9y agoTransferWise held up a few thousand dollars I was sending to a friend in Europe who had been stranded. It wasn't like they just didn't send it for 24 hours, it took TransferWise three weeks to make whatever determination they were going to make, and cancel the transfer instead of sending it to my friend. They also made some incredibly bizarre accusation when canceling the transfer, that they believed the money was for "contraband" (drugs? guns? TransferWise didn't say). Considering my friend is the youth pastor in my hometown, well... So I'm not sure where TransferWise got their information, but there you have it: They held my money for three weeks before canceling the transfer for incredibly dubious reasons.
- jackweirdy 9y agoNothing that dramatic but I have had mixed experiences from their support
- yladiz 9y agoTo be fair, if you were sending it within/from the US, they have to deal with a lot of AML/KYC laws (and it's similar in Europe), so their system probably flagged it automatically, especially if you were a new customer or had little interaction with the platform previously. It would likely happen at a bigger bank as well. It absolutely shouldn't have taken three weeks before getting it sent or not, but they likely wanted to cover their ass in the case it actually was for "contraband".
- leemike 9y agoI believe, With a brokerage account, it's easy to get your foreign currency sent to a bank account in another country.
- alexee 9y agoto your account yes, but not if you want to send money to your friend or employee.
- mabbo 9y agoI'm now paid in USD, but I live in Canada. My bank offered me the 'competitive' exchange rates of 2.5% more than the market offered. TransferWise is literally saving me thousands of dollars per year. I can't thank them enough.
- devman 9y agoI am in a very similar situation (outrageous exchange rates from by Canadian bank). Do you use TransferWise to transfer between your own accounts in a Canadian bank or from your US bank to your Canadian bank?
- mabbo 9y agoUS Bank account to a Canadian bank account. Sort of. Because I'm an idiot, I'm still with RBC. They have a US subsidiary bank called "rbcbank" with no physical locations. Same terrible RBC service, but in America. They opened an account there for me. They offer very fast transfers between the US account and Canada account, but at the stupid rates they offer. ALl my money transfers via TW now.
- itissid 9y agoI can send rupees to my indian bank account at a very competitive rate from the US. But getting it back means going through the bank's FX system which marks it up by ~3%. Are there FX brokers to which I can route money from my Indian bank account so that I will not be charged the 3% rate for the subsequent INR->USD conversion?
- TorKlingberg 9y agoAs a customer, I love TransferWise. The banks charge outrageous rates and fees. The competing money transfer/currency services promise the best rates, but make you sign up before telling you. Then you get constant calls from your "personal currency advisor". In the end you find out their rates are higher, and now you're on call with a sales person. This includes companies HN posters in a previous thread were recommending. TransferWise is upfront and self-service. The one time I had to email support they were great too. On the business side, TransferWise tells an interesting story about peer-to-peer currency exchange, but I think that's a media play. In practice most transfers will not immediately match with reverse flow. TransferWise have to keep a buffer of each currency and trade on the open market, just like the banks do. That in turn exposes them to currency risks, and it wouldn't surprise me if they lost a lot of money on 24 June 2016. As a VC funded startup they could eat that as a learning cost.
- patio11 9y agoI think you're entirely right on the media thing. I've used them on JP->US and US->JP over the years as my sources of income and expense destinations have shifted around. They're pretty brilliant, but it's clear that they're just buying dollars from UFJ (who has a lot of dollars to sell) at a rate better than the one UFJ would quote me. Which is fine! It does exactly what it says on the tin.
- bboreham 9y agoTransferWise reserve the right to cancel out transaction if the market moved too far. I think you're right they would eat a fairly big loss to avoid the bad press this would generate, but there is ultimately a limit. It bugs me this aspect of their business model is never cited, so most people assume they are selling the same product as the banks. They're not: banks take the risk; TransferWise leave it with the customer.
- seem_2211 9y agoI use TransferWise a lot - I work in the US, but send money back to my NZ account regularly. I sent some money last night and it took 2 hours to show up. Can't recommend TransferWise highly enough!
- mottomotto 9y agoI hope TW uses some of the money to build out recurring payments. That is the biggest thing stopping me from using it for B2B payments (think SaaS product with monthly billing). If there are workarounds, would be happy to hear.
- d--b 9y agoThese guys are the best! I've used transferwise to move dollars into euros the day before Brexit. They could not ship the money in time because of the overall transaction volume, and so they offered me the best of the rate I had locked in and the market rate after Brexit!
- stale2002 9y agoObligatory "But what if you just used Bitcoin!"
- Fizzer 9y agoI recently had a client ask me to pay them with Transferwise. It was a horrible experience. After weeks of trying to get it to work, even with the help of support, we eventually gave up and used bitcoin instead. The Transferwise website was horrible. It gave error messages and kept telling me to fill out some field that didn't exist. After sending screenshots to their support team, they just sent me back links that didn't work. After several back-and-forths with support they eventually fixed that issue, but then on a later step the website told me to upload "the documents" and gave an upload control. I carefully read every piece of text on the website, and nowhere did it explain what documents it was asking me to upload. It wouldn't let me proceed until I uploaded "the documents". I sent screenshots of all this to the support team and they didn't know what documents I was supposed to upload either. Eventually support helped me fix that, and I got to a later step, where it asked me for the username and password I use to log into my bank. I am not comfortable providing this to anyone, so I refused. This was the last straw that finally led to me giving up at using Transferwise.
- stevenj 9y agoWow, that sounds awful. I wonder if many people have had problems with TransferWise or think it's a bad product. I've never used it.
- hkmurakami 9y agoI use transferwise and didn't give them my bank credentials. Question: which country are you in and which country were you sending to? I imagine this sorry of thing is both country specific and possibly bank specific. The pain was figuring out the exact recipient bank account name in Japan but that's mainly Japan's fault.
- Fizzer 9y agoIn the US, sending to Cyprus.
- hkmurakami 9y agoI really wonder why they arranged for your bank credentials. I've always been able to just wire transfer wise in the states and they wore in the recipient country. Pertussis there's some regulation in Cyprus about transfers?
- Androider 9y agoHopefully they can use some of that dough to improve their support. I've been trying to do a business (US) to business (EU) transfer using TransferWise for the last few days and it's been a nightmare. First they can't accept an ACH payment, then they cannot match the wire transfer to my business account, support doesn't answer, their automated "Action Required" emails have links to help topics that don't exist and their phone support can't do anything and asks you to email them instead, with the emails never receiving any kind of acknowledgement. Maybe it works fine for sending your friend a fiver, for business use it's a total fail so far.
- satanic_pope 9y agoI generally goto remitrate to check best rates offered today : http://www.remitrate.com/best-exchange-rates/compare-USD-to-INR http://www.remitrate.com/best-exchange-rates/compare-USD-to-... In my experience, Transferwise has been one of the most expensive ones if not the most expensive. Folks at remitly, ria almost always offer better rates compared to Transferwise (atleast on two occasions when I was sending it) I would at some point want to give them a try though.
- thijsvandien 9y agoTransferWise has saved me a _lot_ of money over the last couple of years. The website has gotten worse I must say but otherwise their service has been nothing but satisfactory. I'm still hoping they'll offer a credit or debit card to make it possible to pay in foreign currency on the spot without paying horrific conversion fees.
- Tijdreiziger 9y agoRevolut provides this service. (disclaimer: I haven't used Revolut yet and thus can't vouch for them)