Will These Two Companies Take Over the International Money Transfers?

The growth of money transfer methods is incredible. The companies are growing so fast that the specialist press is now asking itself whether there will be international money transfers from banks in the future or whether Revolut and Transferwise might even take over the market completely. That’s right, two companies could completely take over most of the international transfers. Digital currencies such as Bitcoin also make Revolut and Transferwise powerful competitors. Transferring money is amazingly easy and still cheap.

Many, especially smaller banks, are already partially using the London startups for international transfers. Because Transferwise now relies on Challenger banks as customers! Yes, that’s right, first, the private individuals switched en masse to Transferwise and Revolut, then the SMEs, companies and now dozens of banks.

Simple business model as a central success factor

The company’s simple business model is essentially based on the possibility of cheap money transfers abroad. Compared to other banks, which often charge between five and ten percent for a transfer, Tranferwise is much cheaper. In addition, many customers criticize the fact that the exchange rate is non-transparent, which in turn leads to considerable frustration.

Transferwise always changes to the current middle exchange rate and thus the official exchange rate. The fees are between 0.3 and 1.0 percent. In addition, Transferwise has bank accounts in almost all countries, which is why the company can operate so cheaply on the market. Basically, no money is sent abroad, just a rebooking. The money is then changed at the respective bank abroad.

In the meantime, numerous providers with a similar business model have positioned themselves on the market. Transferwise still enjoys the greatest distribution and associated awareness. In addition, some of these companies do not offer a comprehensive service. Against this background, the lack of web access is not uncommon.

Transferwise’s multi-currency account and borderless debit card

Transferwise stands for simple money transfers. With the so-called “Borderless Account”, users have the option of opening in more than 40 currencies. In a way, this creates a kind of bank account in the respective local currency. Users can make deposits themselves or have money transferred to them. A very practical option, especially for people who like to travel.

In 2019 Transferwise also introduced the Bordless Debit Card, which can be ordered for certain currencies.

Growth continues

In 2018, Transferwise had $100 million in revenue. Over the past few months, the company has been able to collect large amounts of investment funds, which it plans to use to expand into Asia, South America and the Pacific. Transferwise is by no means a second Bitcoin and is not resistant to censorship. Nevertheless, Transferwise provides a good platform for trading bitcoins.

Author: Marko Vidrih

Featured image credit: Pixabay