Money transfer company TransferWise has begun a private launch of its “Borderless account” for consumers. It marks the first time the European unicorn has offered a debit card (pictured below), a move that is bound to draw further comparisons with newer fintech upstarts such as Revolut.
Initially rolling out to a thousand customers, with several thousand more to be invited in the coming weeks and a full public launch pegged for Q1 this year, the online banking account gives you local bank details for the U.K., U.S., Australia and Europe, and lets you hold and convert 28 currencies. It is targeted at people who need to receive and spend money abroad and who want to take advantage of TransferWise’s low exchange rate and transparent fees when doing so.
The product originally launched in May last year but was previously only available for business users and didn’t come with a debit card, meaning that the only way to spend money from a TransferWise account was to move it to another bank account first.
“It’s a step forward for completing our vision for borderless money, where anyone anywhere in the world can spend and receive money globally without having to worry about the hassle and the exchange rate,” TransferWise co-founder and chairman Taavet Hinrikus tells techcrunch. “I think it’s the first time that anyone has created a multi-country bank account. It did not really exist before.”
On the surface at least, the TransferWise Borderless account is quite a stripped-back affair and is “not replacing the current account,” says Hinrikus. Instead, consider it a companion account that solves a couple of different but fundamental problems (which is just as well when you factor in TransferWise’s partnerships with challenger banks such as N26 and Starling).
If a user receives income from abroad and in a different currency to his home bank account, then is very likely to be hit by extra bank charges and an uncompetitive exchange rate by his existing bank. This could be avoided if the user had a local bank account in the country and currency he is paid in, and could then choose when and how to do the currency exchange.
However, to do so would require joining a local bank and incurring additional charges. This is the first problem the free to open TransferWise Borderless account addresses, effectively letting user receive money like a local, including being given a local bank account number with a single click. The addition of a TransferWise MasterCard lets user spend money like a local, too.
Explains the Transfer Wize chairman: “You can have money in 28 currencies in the TransferWise account, but if you don’t have money on the currency you are spending, then we will automatically exchange it in a way that is cheapest for you. So we will choose which of your existing balances will be cheapest to exchange into what you are spending.”
The company says it now employs 900 people globally across its nine offices and holds 15 percent market share in the U.K., its most mature market. The company grew more than 140 percent last year, claims 2 million customers and became profitable for the first time.
Source: techcrunch.com
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