TransferWise Kicks Off Multi-currency Account
The cross-border money transfer company keeps enhancing their range of offers. Barely six months after they introduced their current account for SMEs, this FinTech is rolling out a BtoC-oriented, multi-currency payment account for individual customers. This offer will walk TransferWise closer to becoming a neo-bank, and another challenger for long-standing industry players.
TransferWise has partnerships in place with several local banking institutions, enabling their customers to benefit from local bank details (IBAN, or the like) in Europe, Australia, in the UK and in the US.
This TransferWise Borderless account would make it possible for individual customers to be sent money from these countries and have it converted at no extra cost. A debit card will also be proposed, so these amounts can be converted in 28 currencies, through applying local conversion rates.
To start with, the British FinTech will make this offer available to roughly 1,000 individual customers. The official rollout (to address their 2 million customers) would be scheduled for the end of Q1 2018.
Comments – From a transfer company to a retail banking player
FinTech companies have been upholding quite aggressive pricing policies when it comes to money transfer services. Azimo’s rates, for instance, are reportedly up to 85% cheaper; and, TransferWise claims their prices are eight times less expensive than what banks now propose. New entrants, including Worldremit or Revolut, have caused the transfer market to spur. Revolut even went as far as to propose international transfers for free up to 5,000 pounds. These low-cost offers have helped TransferWise stand out in the transfer market, and a similar strategy is being applied to their multi-currency account.
TransferWise reached their break-even point, and are now speeding up the pace towards diversifying their offers. They are betting on an emerging trend in the FinTech sector, and, from a money transfer specialist, branching out to enter the retail banking market.
TransferWise isn’t the first neo-bank to express their interest in proposing multi-currency accounts, either. Players such as Ditto, and their mobile bank for travellers, or Ipagoo (with a mobile app for business trips), are also aiming for this market, even though they do start with addressing individual customers. Yet, regarding this segment, the UK start-up does stand out again, as they propose slightly cheaper exchange fees (0.5% on average).