Competing and partnering with banks – Arun Tharmarajah, Transferwise’s Head of European Banking Partnerships, speaks about the importance of collaboration to create more effective services for consumers and businesses.. You can hear more about his thoughts in Copenhagen Member Meeting!
1. How do you see the market for cross-border B2B payments is evolving?
Businesses, like consumers, have had to deal with expensive, slow cross-border payments with no certainty around fees and exchange rates for a long time. They will no longer stand for it and we are determined to help fix this problem. We have around 5000 new active business customers joining TransferWise for Business every month.
We understand that businesses have different needs when sending money abroad than consumers, so we have a dedicated business team looking at how we can solve business-specific problems for cross-border payments. We launched our TransferWise for Business Mastercard last year to allow businesses to pay expenses, bills and spend in any currency anywhere in the world. Other features such as integration with Xero, batch payments and an Open API really help businesses take advantage of TransferWise in a variety of ways.
Having a TransferWise for Business account also means you can get UK, Eurozone, Australian, and US bank details for free in seconds. This means businesses can get paid or withdraw money from platforms like Amazon in over 40 currencies.
2. Do you see banks as partners or competitors, what kind of collaboration you have with banks?
Both. It’s not secret that TransferWise was born out of a frustration with the big bank’s practices around sending money abroad i.e hidden and expensive fees, slow payment speeds and deductions from the amount on arrival.
However, we have started to partner with banks who share our mission of transparency to help them bring the TransferWise experience to their own banking apps. We’ve gone live with N26, LHV and Monzo and announced last year that one of the largest banking groups in France, BPCE, will be bringing TransferWise to their 15 million customers soon. They have realised that there is a premium in offering a seamless service and becoming completely transparent (and usually up to 8 times cheaper than their competitors).
Banks can easily integrate the TransferWise service in their bank via our API and offer a better, more seamless and futureproof service to customers without the hidden fees.
3. What has made Transferwise so successful so quickly?
Everyone at TransferWise will probably give you a different answer to this question as there are different factors, ranging from autonomous teams and hiring smart people to solving a real consumer problem. My personal opinion is that we have a huge focus on transparency, something that most companies in finance seem to neglect, and our entire team is really driven by our mission to make this the standard in the industry.
We are always up-front about how much it costs to send money abroad and use our product, and we constantly work towards bringing these fees down. We have a price comparison tool on our website that compares sending money with TransferWise and using a bank or another money transfer service; and if we aren’t the cheapest, we will tell our customers that they may get a better deal elsewhere.
Ever since we started 8 years ago, we’ve pushed for the industry to become more transparent. We are seeing the first wave of change, as some big banks start disclosing how much it really costs to send money abroad – sometimes including exchange rate markups! Additionally, policymakers around the world have started tackling the problem head-on: in the EU, the Cross-Border Payments Regulation will ban these hidden fees for all intra-EU payments and force banks to be truly transparent. In Australia and Singapore, transparency has made it onto the policy agenda. This is just the beginning, but we’re really excited to contribute to fairer finance.
