Is Transferwise Reliable?
Transferwise is one of the hottest startups in the world right now, and considered a market leader in the Fintech sector, with a valuation of more than a billion dollars. It is growing at a staggering pace of more than 100% in sales each year for the past 4 years, and has recently reported 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 grown 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, who were working in the UK, and experienced the high costs of bank-powered international money transfers. Quite early on in their journey to to lower the costs of cross border remittances, they have received a massive shot of encouragement in the form of two mega-investors who believed in that 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:
|Seed||$1,300,000||Index Ventures (VC), IA Ventures (VC), The Accelerator Group (VC), Kima Ventures (BV), Seedcamp (VC), Max Levchin|
|Series A||$6,000,000||SV Angel (VC), Valar Ventures (VC), Peter Thiel|
|Series B||$25,000,000||Valar Ventures (VC), Peter Thiel, Richard Branson, Index Ventures (VC), IA Ventures (VC),|
|Series C||$58,000,000||Anderson Horowitz (VC), Index Ventures (VC), IA Ventures (VC), Seedcamp (VC), Valar Ventures (VC)|
|Series D||$26,000,000||Anderson Horowitz (VC), Valar Ventures (VC), Baillie Gifford (PLC Company)|
|Total to date||$116,368,400||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
The Transferwise Peer to Peer mechanism:
The concept behind Tranferwise is as follows – the platform tries to automatically match transfers from both ends of one currency pairings (for example: one client is buying Euros for Sterling, and another one is buying Sterling for his Euros). This enabled the company to significantly drop remittances prices in many different corridors, and generally speaking, 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 it had to exchange the money itself. The user is completely unaware of what’s going on behind the curtains, and he honestly doesn’t mind as long as he is getting superior rates than other providers.
There are other companies using the Peer to Peer technology, most notably Currencyfair. View the following Transferwise VS Currencyfair comparison to learn more about the difference between the companies.
Transferwise’s advertising campaigns:
The company is advertising heavily on billboards (including London’s Tube), television and online. It is constantly covered by financial and technology journalists in the world, and managed to go into the mainstream quicker than any other company in this industry.
Their campaigns were so effective, and so memorable, that even large banks started noticing them. Their 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 have suffered additional ricochets as a result of their advertising campaigns. In May 2016, the advertising watchdog has commanded Transferwise to be more specific about the savings they offer in each route in comparison to banks, rather than saying that they help clients save 90% of costs. Transferwise has also been mocked by the AmericanBanker magazine as they seek for bank funding now.
Our take on this? Transferwise is catching fire because it is growing in such a rapid pace. As a Branson-backed company, they appreciate any form of attention – positive or negative, and it works out perfectly for them.
Financial Conduct Authority (UK)
Transferwise is probably the sexiest name in the entire money transfer industry. Established by notable entrepreneurs who became aware of a significant problem and went to fix it, taking an entirely different approach for the entire remittances industry.
Its low rates, transparency, great on-boarding process, and mind-blowing advertising campaigns have gained it a status of one of the largest payment providers in the world, as early as 5 years from its launch. A “startup” which is already moving billions across the globe and fighting head to head with industry giants like Western Union or 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, and serves thousands of clients from around the globe with extremely high level of satisfaction. Transferwise is not a scam, although some people tend to think so because of their ultra-friendly rates, but in fact, one of the most credible companies in this industry.