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A cheaper way to wire money overseas: the Transferwise founders speak to Startacus
by Startacus Admin
Banks charge huge hidden fees when you send money abroad. Step forward TransferWise who have just announced $25m investment from a whole whack of tech investors including Richard Branson. Here's our interview with the guys back in Feb 2013 when they shared their fab plans with us on how they were going to beat the banks at their own game!
"With a marketing tagline of “Bye Bye Banks. You’ve had your fun” it’s hard not to be interested in TransferWise. Using ‘real exchange rates’ to help expats, foreign students and businesses wire money abroad, they claim to save you hard cash compared to the banks.
We thought therefore it was only wise to chat with the Taavet Hinrikus and Kristo Käärmann, the Founders of TransferWise, to find out more about their Shoreditch, Tech City based startup:
Explain TransferWise to Startacus. Are you like the Robin Hood of money transfers?
Indeed, we are. Banks charge a lot for foreign money transfers – even when they claim there are ‘no fees’. We don’t. TransferWise is the only service that allows regular people to access the real, mid-market exchange rate. We do this using peer-to-peer technology that cuts out traditional bank fees altogether. Customers pay a tiny, fully transparent service charge to access this. We hope it will upend the entire sector in the way Skype did telephony.
TransferWise came into existence because my co-founder Kristo and I got fed up of banks skimming off so much of our money when we transferred it abroad. When we first became expats in London (we’re both Estonian), I worked for Skype in Tallinn, so was paid in euros, but lived in London. Whereas Kristo worked in London, but owned a house in Tallinn. We found that we had the opposite currency requirements, so we started to exchange it among ourselves at the actual mid-market rate (that's the exchange rate you see in the papers, not the inflated rate you'll be offered by your bank). We quickly realised we had saved a fortune by not moving the money across borders and that perhaps it could be a big business idea. A few years later TransferWise was born.
How did it feel getting your first 'transaction' and customer?
Amazing, but it was also a little scary - we announced our launch on TechCrunch and within minutes people started sending us their money. But there wasn’t much time to hang about savouring the moment – we were in business.
How quickly have you grown?
We’ve made over £50m worth of customer transfers so far and are growing at over 20 per cent a month – not bad for a two-year-old company.
You are based in Tech City - how much do you feel part of a 'startup scene'?
Enormously. We’re based in the Tea Building on Shoreditch High Street, surrounded by dozens of amazing startups. Mind Candy, the children’s social gaming company, is on a floor above us, and Etsy, the marketplace for handmade goods, is on our floor. This sort of environment is great for learning and collaboration. I wouldn’t want to be anywhere else.
Taavet, you were Skype's first employee, did you know at the time that you were joining a potential world beater?
I knew I was in for an adventure whatever happened. Niklas Zennström and Janus Friis, the founders, had just sold Kazaa, a controversial file-sharing site. It upended the music industry. I sensed Skype could do the same to phone calls.
What are the plans for TransferWise and any exciting developments you can share with Startacus?
I’m not sure where to start – we’re getting faster and better everyday (the banks are now way behind). We have at least a dozen new currencies in the pipeline and we’ll be providing support in German, French and Spanish before long...
And there you go - it proves an awful lot can be acheived in just over 12 months and we wish the TranferWise guys all the best for the next 12 months too!
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