The New International Money Solution in Town
Maybe not exactly new. I mean, this fintech company has been here since 2011, gradually penetrating the market without much noise. Well, too much noise is never good. I would choose a solution that works over one that garners a lot of attention but still is ineffective.
Okay, enough rambling.
I don’t know if any of you have heard of Transferwise. Anyone? So Basically, it’s an Estonian developed and UK-based money transfer service launched in 2011 by Kristo Käärmann and Taavet Hinrikus.
But then I’m not here to bore you with weird human names or news of yet another bloody money transfer service. It’s like a circus out there already, one that has lost its glamour. You look left and there’s is PayPal Right and there is Stripe, which I must say is brilliant. Then you look the other way and there’s Payoneer, WorldRemit, Western Union, Square Cash, and a myriad of other godforsaken fintech services.
You see, every money transfer service has its shortcomings. From hefty processing fees to unfair currency exchange rates, it’s as though they are all designed to legally rip you off each time you make a transaction. On top of that, many of them, like PayPal and Payoneer, will hold onto your money for some time before releasing it, which I swear makes me want to punch someone each time.
But let’s ignore that and talk about the fees.
At Macaulay Gidado, we have clients and employees in other countries and thus do quite a lot of international money transfers. You know what that means. The processing fees and unfair exchange rates were doing our business over. Of course, for a single transaction, the fees might look negligible, but when you repeat that same transaction a ton of times in a month, the loss becomes hard to ignore.
So a couple of years ago, we thought we should research fintech in the hope of discovering a service that works for us at Macaulay Gidado. A few minutes on my computer screen and viola, there is Transferwise.
Unlike many other money transfer services out there that will charge you at least a 2% conversion fee, Transferwise charges 0.5% above the mid-market rate. We jumped on board, obviously, and by so doing, improved our net revenue by roughly 1.5% of our gross sales.
But wait, I haven’t even got to the icing yet.
Transferwise has a product called the Borderless account, which they launched in 2017. It allows you to open bank accounts in multiple local currencies with virtually no legwork. Think about it for a second. We all know it’s frustratingly hard, sometimes well-nigh impossible, to open a bank account in another country. Transferwise borderless account makes this a breeze. And these borderless accounts have real bank details like account numbers and IBANs, sort codes, routing numbers, SWIFT codes, and actual local banks associated with them.
With our new local bank accounts, we are now able to collect local currencies from clients and also pay our employees in their local currencies without having to worry about processing fees and currency exchange. Yes, read that again. This further improves our net revenue by 0.5% of our gross sales. Suddenly, our monthly accounting sheet no longer looks disturbing.
And now for the extra icing, you can request a debit card linked to any of your Transferwise borderless accounts. With the debit card, you will be able to spend directly from your account, make online purchases, withdraw from ATMs, and so on.
I don’t know about you, but this is the fin-tech service for every business. It solves many of the problems businesses that transact internationally experience today.
My one issue with Transferwise though is that it doesn’t allow you to create subscriptions. Fortunately, we have Stripe for that. Perhaps next time I will show you how we combine Stripe and Transferwise borderless account to run subscriptions.
Think the Transferwise Borderless account is for you? Sign up here and your first international transfer of up to $500 will be free.
Until next time, do enjoy the rest of your week.
