(22 May 2017 – Global) London-based payments firm, TransferWise, is introducing a new foreign exchange (FX) account targeting small businesses and sole traders.
The move is a first step in venturing beyond the fintech’s core offering of retail international money transfers.
Launched this week, the “Borderless” account allows businesses to hold up to 15 different currencies, while also linking to separate local bank account numbers for the United Kingdom (UK), United States (US), and Europe. The firm says customers will be able to receive and pay funds in those locations without incurring international transfer and foreign exchange fees.
Co-founder and Chief Executive Officer Taavet Hinrikus said the firm was seeking out expansion opportunities within other financial services in addition to its core offering. “We really think we have the opportunity to become a new kind of financial institution,” he said.
TransferWise, which has received more than $116 million in venture capital funding and was valued at $1.1 billion last May, has been profitable since the start of the year, Hinrikus said, although he declined to say exactly how much the company made. “We are continuing to invest in the business and to hire people,” he said. “So having a profit target is not something we want to concentrate on.”
The company will charge between 0.5 percent and 1 percent for moving money between different currencies in the new multi-currency account or for making an outbound payment in a different currency.
Unlike traditional accounts, the new offering charges no set up or monthly fees, and users can receive money for free. It does not pay any interest on account balances. All funds in the account are physically stored in TransferWise’s own bank accounts in the UK, US or Australia, the company said.
Currently, the new account will be offered to customers in the UK, the European Economic Area, Switzerland, India, Pakistan and the Channel Islands. TransferWise said it plans to roll the product out globally later this year, starting with the US “in a couple of weeks.”
TransferWise employs 700 people around the world. It said it is currently processing one billion pounds worth of transactions every month and is “on track” to have about 100 million pounds in revenue this year.