- One thousand customers will see roll out of new service
- Users will be able to hold and trade in 28 currencies
Money transfers brand TransferWise has started a private launch of a borderless account for customers. This is the first occasion the company has offered a debit card, a development that will almost certainly invite comparisons with its younger fintech competitor, Revolut.
The new online banking account gives consumers local bank details for Australia, the US, the UK and Europe, enabling them to hold and convert 28 currencies. Aimed at people who need to spend and receive money abroad, it is being made available to one thousand TransferWise customers to begin with, who will be able to take advantage of the company’s low exchange rates and transparent fees when making international money transfers. Several thousand more customers will be invited to participate over the next few weeks. A full public launch is scheduled for the first quarter of 2018.
Although the product initially launched in May 2017, at that point it was only available to business users and did not include a credit card. That proved somewhat cumbersome: it was only possible to spend funds from a TransferWise account by shifting it to another bank account first.
Taavet Hinrikus, TransferWise chairman and co-founder, told TechCrunch journalist Steve O’Hear: “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. I think it’s the first time that anyone has created a multi-country bank account. It did not really exist before.”
Hinrikus was emphatic that the borderless facility is “not replacing the current account” but is instead a companion to it. It will have considerable appeal to people who earn income from abroad in a different currency. For example, an Aussie-based freelance journalist who writes for a US-based outlet like TechCrunch will be paid in USD, not AUD, and will very likely be stung by additional bank charges and an uncompetitive rate of exchange by his or her existing bank. But if that person had a local bank account in the currency and country where payment comes from, he or she could choose how and when to execute the currency exchange.
Even so, that would necessitate opening an account at a local bank in the paying country and would incur extra charges. TransferWise Borderless solves this by enabling consumers to receive money as though they had a local account abroad (they even get a local bank account number with one click) and it allows them to spend that money as a local would, too.
Hinrikus added: “It is people who are working, living, studying abroad, who are most benefiting from this.”
The borderless card also features “intelligent currency routing”, a nifty facility that allows consumers not simply to hold money in 28 currencies in their TransferWise accounts, but something exceptionally clever, too. If they don’t have money in the currency they need to spend, TransferWise automatically exchanges it at the cheapest possible rate. In other words, it chooses which of the customer’s existing balances will be cheapest to exchange into the currency that needs to be spent.
TransferWise is headquartered in London and currently employs 900 people globally in its nine offices. It grew by 140% last year and announced a vast USD $280m investment in November, making its current estimated value USD $1.6bn.
