How you can save money with TransferWise!
You have studied abroad and had to struggle with high transfer fees?
How does it work?
You go to the company’s website https://transferwise.com/ and find a currency calculator, where you can type in the amount you would like to transfer. Once you choose a currency, you can see a detailed explanation on the breakdown of the fees being charged. Then you will have to enter a few personal details before filling in the receiver’s data. You can then choose if you would like to pay by bank transfer or debit card. If you go for the latter, it works similarly to other online payment transactions. If you choose to pay by bank transfer you will be provided with TransferWise’s account details. Now you have to make your transaction (Price, 2015).
How is this possible?
TransferWise helps its customers to circumvent the traditional banking system by making use of a peer-to-peer system, in which a money transaction from a different customer that goes into the opposite direction is matched up against your payment at the mid-market exchange rate (Olson, 2015). This means that your money actually stays in the country, where it is sent from (Price, 2015). By doing so, TransferWise manages to undercut fees of traditional banks by up to 90%. In particular, TransferWise’s fee amounts to 0.5%, while traditional banks’ on average charge 5%. The company differentiates itself by stating that they do not charge any hidden fees as banks (Olson, 2015).
So go and …
How does the competitive landscape look like?
TransferWise faces competitors, such as Dublin-based CurrencyFair, the UK’s Azimo, and WorldRemit (O’Hear, 2015). However, this did not impede TransferWise from strong growth. What is more, having raised $58 million in venture capital funding in January, the company became part of the “Unicorn” club because of its close to $1 billion valuation (Price, 2015b).
How does the global banking industry look like?
Compared with other industries, the banking industry has seen less technological disruptions in the last twenty years (Price, 2015b). Since the last financial crisis however, new technologies have emerged and have started to disrupt traditional banking (Deloitte, 2014). Let’s see how Apple Pay, Google Wallet or other mobile payment services will revolutionize global banking (Marks, 2015).
Deloitte, 2014. 2014 Banking Industry Outlook. Retrieved October 16, 2015, from http://deloitte.wsj.com/cio/2014/02/12/2014-banking-industry-outlook/
Marks, G. (2015, January 1). Why Is Almost No One Using Apple Pay? Retrieved October 16, 2015, from Forbes: http://www.forbes.com/sites/quickerbettertech/2015/06/01/why-is-almost-no-one-using-apple-pay/
O’Hear, S. (2015, February 17). Backed By A16Z, London-Based Money Transfer Startup TransferWise Finally Launches In The U.S. Retrieved October 17, 2015, from TechCrunch: http://techcrunch.com/2015/02/17/crossing-the-money-pond/#.sh9lvz:n1qD
Olson, P. (2015, January 26). Banks Beware: TransferWise Raises $58 Million To Go Global. Retrieved October 16, 2015, from Forbes Tech: http://www.forbes.com/sites/parmyolson/2015/01/26/transferwise-funding-andreessen-banks/
Price, R. (2015, January 26). Here’s How $1 Billion TransferWise Actually Works. Retrieved October 16, 2015, from Business Insider UK: http://uk.businessinsider.com/how-transferwise-works-2015-1
Price, R. (2015b, January 26). Why TransferWise’s $1 Billion Valuation Will Terrify The Banks. Retrieved October 17, 2015, from Business Insider UK: http://uk.businessinsider.com/transferwise-1-billion-fintech-revolution-banks-2015-1
TransferWise. (2015). The clever new way to beat bank fees. Retrieved October 16, 2015, from TransferWise: https://transferwise.com/
Author: 439328kn – Melanie