TransferWise has long been considered a darling of the UK tech scene, one of a clutch of UK-based scaleups that have seen stratospheric success.

Its peer-to-peer money transfer service is squarely aimed at taking on the high bank fees and lack of transparency when transferring money across international borders.

© TransferWise
© TransferWise

It is clearly on to something. The company, launched in 2011, has grown from 300 employees two and a half years ago, to over 1,000, its head of business Stuart Gregory tells Techworld.

It now has about 400 staff in its largest office in Talinn, Estonia (the home country of founders Kristo Käärmann and Taavet Hinrikus) and 200 in London alone.

“TransferWise broke even for the first time in January 2017. And we’re seeing our transfers are growing at a greater rate than our costs,” Gregory says.

“There is no reason international transfers should be three percent. We’ve dropped it to 0.35 percent but we want to push it further – so we’re really focused on cutting our cost base,” he adds.

Although TransferWise was originally conceived as a consumer-facing business, it has found significant traction in the B2B market, with 30,000 businesses using it every month. TransferWise is currently trialling a debit card service for businesses too.

“The heaviest business users can do anything from five to 10,000 transfers a week,” Gregory says. These are primarily for cross-border transfers, invoices, and any other requirements for moving money around within businesses globally.

Last year TransferWise launched a ‘borderless account’ for businesses, offering them one account to send, receive and spend money around the world, with fees it promises are up to eight times cheaper than the banks. This means companies don’t have to set up a local bank account to transact internationally, for example sending money from the UK to Australia.

“Our original mission was to make international transfers transparent. Now it’s to make money borderless,” Gregory says.

TransferWise works by allowing users to go on the site, ask for the currency exchange rate and fee on a transfer upfront, and compare it to the midmarket rate.

Users enter recipient details, say when they want the money to arrive, and put in their payment details. The money is converted from say, British pounds to Australian dollars, and paid out of TransferWise’s local bank account. Most of the process has been automated and it included rigorous anti-money laundering procedures, Gregory says.

The company’s main competitors are the banks and cash-to-cash transfer agencies like Western Union. Interestingly, some of them are starting to wise up to the lack of transparency surrounding transactions. For example Barclays now shows fees in its app.

TransferWise’s biggest challenge is a lack of awareness among customers and businesses regarding how much they are being charged for transactions, according to Gregory.

“We’re talking £50 on £1,000, not £5. Customers don’t understand the charging structure and don’t realise, for example, zero commission isn’t free and still has a big interest rate.

“When you send money internationally you never quite know how much it’s costing you. We did a comparison and we were, truly, something like 19 times cheaper than the alternatives,” he says.