Does tech help TransferWise make international money transfers cheaper?
INTERNATIONAL money transfers are both complicated and expensive, especially for the retail customer.
As a result, there’s a shift towards online, digital-first or digital-only services that are launching either independently or in partnership with telcos. One such company that has stood the test of time and delivered on the promise of cheaper, faster international money transfers is TransferWise.
Launched almost a decade ago in 2011, TransferWise was co-founded by Skype’s first employee Taavet Hinrikus, who now serves as the company’s chairman.
At the company’s recent launch in Malaysia, Hinrikus answered a few questions Tech Wire Asia raised about the company, its service, and the technology it uses.
“We are very excited to be launching TransferWise in Malaysia. We received 15,000 requests from customers, and that made us work very hard to enable the service here. Malaysians can now send money using TransferWise to 83 countries at prices up to 4x cheaper than the banks.”
In the future, the company plans to launch international money transfers for businesses as well.
What’s interesting about TransferWise’s offering is that it leverages technology to offer a simple interface that simplifies the onboarding process and facilitates transactions in a transparent manner — delighting customers at every interaction.
“TransferWise is a 100 percent online experience from verification to the setting up and completion of transfers, with no need for customers to leave their homes.”
Further, since customers get an exchange rate equal to the rate they see on Google, they are financially motivated to try the service.
In terms of technology use at TransferWise, Taavet assures Tech Wire Asia that there’s plenty of automation and artificial intelligence (AI) in play — “after all, that is our bread and butter”.
However, at its core, the company’s ingenuity is what has served it well over the past decade and enabled it to earn the trust of regulators and partners across the world.
An example of the company’s creativity in action can be seen in the way it makes international money transfers quick, easy, and effective.
“TransferWise has found a way to help consumers and businesses bypass the correspondent banking system – sometimes known colloquially as the Swift system,” Taavet revealed.
“We do this by building a global network of local accounts. When you send money from Malaysia to the UK, for example, you send the money to our local account in Malaysia. Once we receive it, we pay out from our local account in the UK to your recipient’s UK account. Often the money never has to cross borders.”
As a result, the company is able to boast of completing transfers quickly — up to 80 percent of them are completed within 24 hours.
With the launch of the service in Malaysia, it’s grip on the Asia Pacific (APAC) market got a little bit stronger, although it has already built a strong presence in Singapore, Australia, and in other countries in the region.
The lesson that Taavet offers to companies in today’s day and age, however, is simple: Technology is only part of the solution. To succeed, businesses need to think outside the box and look for creative solutions to problems — and rely on technology to put the pieces together at the end of the day.