Is Transferwise Reliable? Is Transferwise Trustworthy?
Transferwise is one of the hottest startups in the world right now, and it is considered a market leader in the Fintech sector, with a valuation of more than a billion dollars. It has grown at a staggering pace of more than 100% in sales each year for the past 4 years, and has recently reported that it is moving more than $500m every month for its clients. There are currently more than 700 employees working for Transferwise in 7 locations around the world.
Transferwise has definitely come a long way since its inception in 2010 (and launch in 2011).
It was established by two Estonian Fintech innovators, Taavet Hinrikus, (Skype’s first employee) and Kristo Käärmann, both of whom were working in the UK, and experiencing the high costs of bank-powered international money transfers. Quite early on in their journey to lower the costs of cross border remittances, they received a massive shot of encouragement in the form of two mega-investors who believed in the idea, and jumped on the Transferwise wagon. These two investors were PayPal’s co-founder, Peter Thiel, as well as Virgin’s founder Richard Branson.
Here is a complete overview of Transferwise’s investment rounds:
||Index Ventures (VC), IA Ventures (VC), The Accelerator Group (VC), Kima Ventures (BV), Seedcamp (VC), Max Levchin
||SV Angel (VC), Valar Ventures (VC), Peter Thiel
||Valar Ventures (VC), Peter Thiel, Richard Branson, Index Ventures (VC), IA Ventures (VC),
||Anderson Horowitz (VC), Index Ventures (VC), IA Ventures (VC), Seedcamp (VC), Valar Ventures (VC)
||Anderson Horowitz (VC), Valar Ventures (VC), Baillie Gifford (PLC Company)
|Total to date
||Anderson Horowitz (VC), Index Ventures (VC), IA Ventures (VC), Seedcamp (VC), Valar Ventures (VC), Peter Thiel, Richard Branson, The Accelerator Group (VC), Kima Ventures (BV), Seedcamp (VC), Max Levchin
Information from Angel.co
October 2017 update: Transferwise raised another $280,000,000 making it one of the most funded startups ever with a total of $440,000,000.
The Transferwise Peer-to-Peer mechanism (How Does Transferwise Work?)
The concept behind Tranferwise is as follows – the platform tries to automatically match transfers from both ends of one currency pairing (for example: one client is buying Euros for Sterling, and another one is buying Sterling for his Euros). This approach enables the company to significantly drop remittances prices in many different corridors, and generally speaking, makes it one of the cheapest and most transparent payment providers in the world.
The entire process is performed below the surface, so transfers are executed instantaneously, and the margin is always fixed – whether Transferwise managed to match the trade using the peer-to-peer money transfer system, or whether it had to exchange the money itself. The user is completely unaware of what’s going on behind the scenes, and he honestly doesn’t mind as long as he is getting superior better rates than he would with other providers.
There are other companies using Peer-to-Peer technology, most notably Currencyfair. You cab view the following Transferwise VS Currencyfair comparison to learn more about the difference between these companies.
Transferwise’s advertising campaigns:
The company is advertising heavily on billboards (including in the London underground), as well as on television and online. It is constantly covered by financial and technology journalists around the world, and managed to get into the mainstream quicker than any other company in this industry.
Its campaigns were so effective, and so memorable, that even large banks began noticing them. The old slogan “YOUR BANK IS SECRETLY OVERCHARGING YOU ON INTERNATIONAL MONEY TRANSFER” was adjudicated by The Advertising Standard Authority, following complaints from these banks.
Update: Transferwise has suffered additional obstacles a result of its advertising campaigns. In May 2016, the advertising watchdog commanded Transferwise to be more specific about the savings it offers in each route, in comparison to banks, rather than saying that it helps clients save 90% of transfer costs. Transferwise has also been mocked by the AmericanBanker magazine, as the company is now seeking bank funding.
Our take on this? Transferwise is catching fire because it is growing in such a rapid pace. As a Branson-backed company, it appreciates any form of attention – positive or negative, and it works out perfectly.
Financial Conduct Authority (UK)
Transferwise is probably the sexiest name in the whole money transfer industry. Established by notable entrepreneurs who became aware of a significant problem and sought to fix it, the company is taking an entirely different approach from the entire remittances industry.
Its low rates, transparency, great on-boarding process, and mind-blowing advertising campaigns have gained it a status as one of the largest payment providers in the world, as early as 5 years from its launch. This is a “startup” that is already moving billions across the globe and fighting with industry giants like Western Union and Moneycorp.
Is Transferwise safe?
There is absolutely nothing to be concerned about when you use Transferwise to move money abroad. It has a sound financial structure, a solid business model, and it is the absolute epitome of client transparency. The company has moved more than $5bn this year alone, and serves thousands of clients from around the globe with an extremely high level of satisfaction. Transferwise is not a scam, although some people tend to think it is because of the ultra-friendly rates, while in fact, it is one of the most credible companies in this industry.