Twelve Lessons Learned by TransferWise on How to Globally Scale Fintech Products

Undated handout image of the TransferWise app. TransferWise/Handout via REUTERS

Kaarel Kuddu, Head of Product at TransferWise talks about decisions he made to drive the expansion of his products into foreign markets.

TransferWise is a money transfer service that launched in the UK in 2011. Their goal is to give people the ability to send money quickly, conveniently, internationally, and inexpensively.

Since opening their offices in London, TransferWise has grown exponentially, adding hundreds to their many teams and opening offices across the world in countries like Canada, Australia, Brazil, Japan, Singapore, and the USA.

Kaarel Kuddu, Head of Product at TransferWise

Kaarel joined TransferWise in 2015 and was put in charge of international expansion. “Building borderless account products always meant that we would expand and go beyond our home market, the UK and Europe,” he tells the audience. Since 2015, he grew into his current role and works continuously to establish TransferWise products on a global scale.

At a fintech product talk in New York City, Kaarel stopped by to discuss how they made product decisions to drive expansion, and the lessons they learned while launching fintech products outside European markets.

1. Build Quality Products

In the beginning, TransferWise was primarily a consumer product. Most of their transactions were peer-to-peer transactions like overseas purchases, family contributions, and gifts.

Years later, TransferWise launched products for businesses, which is now their fastest growing product line. And now one of the biggest challenges they face is ensuring business products are viewed by customers with similar (if not greater) respect as their original product.

TransferWise “Borderless account” for business. Source: TransferWise
“In spite of these challenges, customer interest in business products has been growing rapidly. Companies can now integrate with our API technology and send funds through their back end. There are also some neobanks that are now using TransferWise’s API to power their own international money transfers.”

When they launched products in New Zealand, in the first few months they experienced slow growth, largely due to a government data verification requirement. This policy negatively impacted the quality and convenience TransferWise products are guaranteed to provide, Kaarel explains:

“During the TransferWise user verification process, customers in New Zealand were required by local government banking regulators to visit a physical office location with identification in order to get approval for the transfers. Customers complained about leaving their homes to get this verification, then return home to complete the money transfer process online.”

Fortunately, after conversations with New Zealand regulators, TransferWise developed solutions that met the regulator’s requirements. “We lost a few customers over a short period, but business turned around once the news spread that customers no longer had to leave their homes. They could verify who they are and send money in the comfort of their own home, just by using the apps.”

2. Learn About Your Customers

Kaarel admits that TransferWise including himself were a bit naive and overconfident about how they approached scaling products in the beginning. “We didn’t do a lot of customer research at first, but it wasn’t because we wanted to ignore them,” He explains.

“At the time our teams had this singular focus on studying the market first. Many of my colleagues and myself at the time, wanted to deeply understand the market and the problems that needed solving. As a result, we mistakenly overlooked the importance of customer development.”
Customer development is a four-step framework, originally identified by Steve Blank, to discover and validate that you have identified a need(s) that customers have, built the right product to satisfy that customer’s need(s), tested the correct methods for acquiring and converting customers, and deployed the right resources in the organization to meet the demand for the product.
Source: Agile Alliance

While doing market research made sense in the long term, the data they found did not tell them about the immediate customer demand. So they changed their strategy and started diving a lot deeper into customer insights. “We wanted to understand where in the world our customers would actually want to send and receive money.”

3. Launching Products

Launching a product is always an exciting first step. However, it isn’t uncommon for that first step to be taken multiple times. In the USA, for example, TransferWise launched a number of times due to issues with compliance, fraud and business partnerships. They would launch, run into issues, pull the product, find new partners, and launch again. They ran into similar situations in other countries too, like India, Turkey, and Thailand. There have been situations that took three or four tries to launch successfully.

When TransferWise first launched in Australia, according to Kaarel, it took a while for word-of-mouth to take effect. “We had run some marketing campaigns, but they were mainly smaller-scale campaigns like Facebook and Google ads,” He admits.

They decided, though, that they wanted to invest more in marketing and do a big, heavily advertised launch in Australia. “We got some billboards and TV commercials running and launched brand campaigns,” He says. “Unfortunately, nobody at TransferWise at the time knew anything about TV marketing, so the response was disappointing.”

TrasferWise billboard ad in Sydney. Source:

These experiences taught them to wait until the product has gained some traction in foreign countries before investing large sums in marketing. It also taught them that when working with business partnerships, gain a very thorough understanding of the verification policies and requirements of the areas you’re planning to operate in. “In Columbia we made the mistake of not having enough conversations with our partners about data and identity verification procedures before the product launch.”

4. Follow The Money & Customer Demand

It took the teams at TransferWise a few failures to really understand how to prioritize global scaling. One of the first things Kaarel did to get an understanding, was search for what he describes as money movements.

“It turns out that The World Bank has a database that can be downloaded. It shows all of the world’s money transfers between countries!” He says with excitement. Kaarel and his team were then able to see countries that were sending and receiving the largest amounts of money, and they prioritized expansion into those countries first.

“We started to select which countries to launch products in by comparing the volumes of money that’s moving in and out of countries. We also looked at how money moved from one country’s markets to markets in another country.”

But when product launches failed in countries like Columbia and Japan, they realized that there were flaws in their market prediction strategy. This drove them to generate clever ways to re-prioritize their expansion plans.

In their products, they created a feature that allowed people to ‘wish’ for available countries. So when using the product, if a country that a user wanted wasn’t available in the ‘send money to’ or ‘send money from’ drop-down menus in the TransferWise apps, they could ‘wish’ for it. This is when they first realized that constantly talking to customers is great for product expansion and company growth.

5. Set Competitive Rates

Initially, TransferWise set their rates based on what would avoid losses. They calculated the costs from partners and resources and came up with a number that would at least break even. Then, as they scaled and their costs went down, they were able to lower their rates enough to remain competitive while also beginning to make a profit.

“A lot of our competitors approach pricing by trying to figure out how much margin one can put in rates before you begin to see adoption rates drop. At TransferWise we decided against it, because we believe in being transparent with our customers.”

Rather than try to get as much profit out of their rates as possible, they would decide on a percentage that they wanted to get out of each transfer in profit, and then use that margin across the financial board. TransferWise’s mission is clear — it’s less about making money, and more about getting the money transfer costs as close to zero as possible.

6. Manage Liquidity

When it comes to TransferWise having access to cash, some of their markets have more money being paid in, while other markets have more money being paid out. It’s why the company implemented systems to ensure cash is available to guarantee quick transfers for customers.

“TransferWise has an entire department devoted to handling liquidity,” Kaarel says. “They have a network of partners in many countries that help them keep track of each currency’s value to ensure that they always have enough money on hand to pay out.”

7. Open Offices in Viable Markets When Needed

Launching in Singapore was an interesting experience for Kaarel and TransferWise teams. They were off to slow start in the first quarter, however, as the months went on, their numbers grew exponentially. Even after just a few months their user base had tripled. This fluctuation was partially due to the fact that TransferWise was required to open an office in Singapore.

TransferWise Offices, Singapore. Photographer: Owen Raggett

Singapore has regulations stating that facial verification is needed for money transfers. Like in New Zealand, TransferWise’s customers had to begin their transfer online, then go to a physical office to present identification, and then go back home to complete the transfer online. This inconvenience caused TransferWise to lose customers in the first month. By the second month, though, they were able to implement the ability to upload identification online, and the regulations were lifted. This gained them up to three times as many customers, according to Kaarel, in a matter of a few months. “From there, success in Singapore became contagious.”

This did, however, present the challenge of ensuring their users’ privacy and security. Some people were weary of uploading copies of their identification online. TransferWise reassured them by advertising on the landing page that they were regulated by an official financial authority.

Australia was another country that received a lot of ‘wishes.’ After going through the typical process of finding a partner, navigating the local laws, and verifying their users, TransferWise was able to have a very successful Australian launch. The market’s landscape was actually very similar to the UK, which helped with their success since they started as a UK-based company.

“TransferWise saw great success in Brazil,” Kaarel shares with the audience. “A big contributor to our Brazilian success was the fact that we didn’t have much, if any, competition. Australia had a couple of other products in the market that were at least similar, but Brazil had none. We were able to enter the market and offer something that wasn’t otherwise available.”

TransferWise products are available in Brazil. Source: TransferWise

8. Make Product Localization A Priority

Some products are easier to localize than others. Something like Facebook, for example, could just translate their pages and mostly be ready for a new market. Minor UX changes could be made later, but they could easily launch in a new country after translating. TransferWise, however, is a different story. They not only have to deal with translation, but they have to navigate local laws and regulations governing financial transactions and user verification. They also have to integrate with local payment networks and sometimes report their data to authorities.

Another localization challenge is finding marketing techniques and materials that benefit globally and locally. For example, at one point TransferWise got a large investment from someone famous — British entrepreneur and businessman, Richard Branson. They decided to put a picture of Branson on their landing page to get people excited about their product. “We figured that if people saw Richard Branson using TransferWise, it would make them want to use it as well.” Kaarel said.

When the Branson picture went live, some of their markets saw minor dips in conversion, but Germany saw a major drop.

Source: Kaarel Kuddu

When TransferWise talked to customers based in Germany and conducted user interviews, Kaarel and his team discovered that people in Germany were ‘uncomfortable’ with Branson because he was a risk taker with his money. “The German people preferred to be safer with their money,” Kaarel says. “Richard Branson, the man we thought was a great and important man had a very different public image in Germany.”

However, what they also learned is that German customers trust businesses that are ‘TÜV SÜD’ product certified. TransferWise decided to remove the Branson inspired marketing materials, then applied and successfully received the TÜV SÜD certification. As a result, product adoption rates in Germany increased dramatically.

9. Prioritize Growth in Operations & Compliance

Another challenge that Kaarel takes on is making sure that back end offices like operations and compliance scale alongside the rest of the business. “When scaling, it is very important that the entire business scales together, rather than one side passing another and causing an imbalance,” He says.

The TransferWise team by Old Street roundabout, London, UK. Source: Yahoo Finance

10. Work Closely With Government Regulators

When TransferWise began reaching out and seeing what markets got the most wishes, Columbia was towards the top of the list for the most wishes. They flew to Columbia, met with a business partner that was going to help them launch in that market, and after some delays, they launched.

In spite of delays and complications, teams at TransferWise were optimistic after launching, but eventually ran into issues with their Columbian partner requiring thumbprints from users. As it turns out, Columbian government finance regulators require specific forms of data and thumbprints from individuals sending and receiving money in Columbia. Most of TransferWise’s users at the time were not aware of this, so TransferWise Columbia closed their doors and pulled their product.

11. Make Decisions Driven By The Country’s Values

TransferWise also learned to be more cautious about investing in areas that they do not have experience in. One of the most important lessons that Kaarel and his team learned, though, was that in every country, they needed to understand what the people valued the most. Those values were mostly learned through customer surveys and interviews. For example, people sending money to and from Australia cared most about rates and ease of use. People sending money to and from countries in Europe and most of Asia cared most about speed. People in Germany cared about product reliability and trust. TransferWise learned to cater their marketing campaigns to each particular country based off of that country’s values.


12. Pay Attention to Customers

Back when Kaarel and his team were still prioritizing based off of The World Bank data, they decided to launch in Japan. Japan had one of the biggest money transfer volumes in the world with billions of dollars going in and out. TransferWise found a partner and managed to launch in Japan, but this venture also turned out to be unsuccessful. While The World Bank showed that it should have been a smart idea, when they launched the ‘wish’ functionality and talked to prospective customers, they learned that they didn’t have a lot of customer interest in the Japanese market. On the bright side — the wish functionality worked out well for TransferWise when they launched in Brazil.

“Before the ‘wish’ functionality went live, we had no idea how many people from different parts of the world know about TransferWise. But after the launch, we started to get thousands of wishes from people in countries who wanted to use our products. With the rise of business traveling and freelancers ‘digital nomads,’ people want easy ways to send money from one country to another. We re-prioritized our roadmap and made features based on the wishes we received, and we were getting lots of new users.”

With the wish system, Kaarel and his team were now able to look at what their users wanted. They were now able to better examine the correlation between customer interest and product quality. “To build a wish feature, think about how to build ways to listen to users and figure out easy ways for existing or potential users to communicate how they would like to use our products.” They would also do surveys and ask current customers if they would or had recommended TransferWise to a friend. If they did recommend TransferWise, they would ask why:

“Some people would say it’s the speed, some would say it’s our rates, some would say ease of use, and others would say a combination of the three or something else entirely. Then, we could map out the responses and get a relative idea of what countries tended to value the most.”

“Talking to partners and customers is a powerful way to discover which cities and countries outside of London and Europe would love our products.” He admits to the audience as he concludes his talk.

At TransferWise, Kaarel and his colleagues realized that when it comes to launching products into foreign markets, paying attention to customers online and in real life, provides valuable insights beyond the home market.