TransferWise Company Founding History
TransferWise, now known as Wise, was founded in 2011 by Taavet Hinrikus and Kristo Käärmann. The company’s primary idea emerged from the founders’ personal experiences as they sought a cheaper and more convenient way to transfer money between countries.
Taavet Hinrikus, the first employee of Skype, frequently transferred money from Estonia to London, where he worked, and encountered high fees and unfavorable exchange rates. His future co-founder, Kristo Käärmann, working in London, also transferred money back to Estonia. They began exchanging currencies between themselves at the real exchange rate, allowing them to save on fees.
Recognizing that many people faced similar problems, they decided to launch a service that would enable money transfers between countries with lower fees and fairer exchange rates. This led to the creation of TransferWise.
TransferWise quickly gained popularity due to its transparency, low fees, and user-friendly interface. The service offered an online platform for transfers that used the real exchange rate, with significantly lower fees than traditional banks.
Over time, the company expanded its services to include multi-currency accounts and other financial products. In 2021, TransferWise was rebranded as Wise to better reflect the expanded range of services beyond simple money transfers.
Today, Wise is recognized as one of the leading fintech companies, providing affordable and convenient solutions for international money transfers and financial management worldwide.
Wise offers various financial services aimed at simplifying international money transfers and currency management. The company’s core services include:
- Money Transfers: Wise’s primary service involves international money transfers. The company offers transfers at the real exchange rate with transparent and low fees, allowing users to transfer money between different countries more cost-effectively than traditional banks.
- Multi-Currency Account: Wise provides the option to open a multi-currency account, allowing users to hold funds in various currencies. This is convenient for frequent travelers, those working with foreign clients, or individuals residing in another country. The account enables receiving, holding, and sending money in different currencies.
- Debit Card: In conjunction with the multi-currency account, Wise offers an international debit card. This card enables users to make purchases in different countries using funds from the account and withdraw cash in local currency at favorable rates.
- Expense Management for Business: Wise also offers business solutions, including expense management, multi-currency accounts, and cards. This is convenient for companies dealing with international partners or clients.
- Direct Debit Services: In some regions, Wise provides direct debit services, allowing automatic payment of bills and subscriptions in other countries.
- Integration with Banking Apps: Wise provides an API for integration with various financial apps and platforms, facilitating financial management on an international scale. The company continues to evolve, introducing new technologies and services to make international financial transactions more accessible and convenient for users worldwide.
Currencies Available on Wise
As of my last update in April 2023, Wise supports a wide range of currencies for international transfers, multi-currency accounts, and other operations. Some of the main currencies available on Wise include:
- Euro (EUR)
- US Dollar (USD)
- British Pound (GBP)
- Australian Dollar (AUD)
- Canadian Dollar (CAD)
- Swiss Franc (CHF)
- Japanese Yen (JPY)
- Indian Rupee (INR)
- New Zealand Dollar (NZD)
- Polish Złoty (PLN)
- Singapore Dollar (SGD)
- Turkish Lira (TRY)
- South African Rand (ZAR)
- Mexican Peso (MXN)
- Brazilian Real (BRL)
- Russian Ruble (RUB)
In addition to these, Wise supports many other currencies. The number of supported currencies is continually growing, and Wise aims to provide its users access to a broad range of currency options.
For precise information on the current list of available currencies and the terms of their use, including limits and fees, it is recommended to visit the official Wise website or contact their support.
Company Development Over the Years
The development of Wise can be outlined by highlighting key stages of its growth and development:
- TransferWise was founded by Taavet Hinrikus and Kristo Käärmann in London.
- The idea stemmed from the need for cheaper and transparent money transfers between countries.
2012-2013: Early Development
- Growth in the customer base and expansion of the list of supported currencies.
- Receipt of initial significant investments from venture investors.
2014-2015: International Expansion
- Launch of services in various countries, including the United States, Australia, and Germany.
- Increase in turnover and the number of employees.
2016-2017: Product Line Expansion
- Introduction of multi-currency accounts, allowing users to hold and manage funds in different currencies.
- Significant growth in the number of users and processed transactions.
2018-2019: Market Position Strengthening
- Further geographical expansion.
- Enhancement of platform efficiency and user convenience.
2020: Rebranding to Wise
- In February 2021, TransferWise was rebranded as Wise, reflecting the expansion of services beyond simple international transfers.
2021 and Beyond: New Initiatives and Development
- Successful IPO (Initial Public Offering).
- Continued innovation in financial technology, including improvements to multi-currency accounts and debit cards.
It’s important to note that this information is based on data available until April 2023. For the most up-to-date information on Wise’s development, it is recommended to refer to official sources or the company’s press releases.
Investment Stages and Fundraising by Wise
The Wise company has gone through several rounds of funding, significantly increasing its valuation. Here are the main stages:
2011: Company Foundation
- Initial capital and support from co-founders and small investors.
2012: Series A
- Raised $1.3 million from investors, including Index Ventures and individual angel investors.
2013: Series B
- Additional funding of $6 million from Valar Ventures (Peter Thiel’s fund).
2014: Series C
- Raised $25 million from investors, including Valar Ventures, Index Ventures, Sir Richard Branson, and others.
2015: Series D
- Funding of $58 million, resulting in a company valuation of approximately $1 billion, making it a “unicorn” (a startup with a valuation exceeding $1 billion).
2016-2017: Additional Rounds
- In 2016, Wise attracted $26 million, and in 2017, another $280 million in Series E, further increasing its valuation.
2020-2021: Transition to Initial Public Offering (IPO)
- In 2021, Wise conducted a Direct Public Offering (DPO) on the London Stock Exchange. At the time of the IPO, the company’s valuation was approximately $11 billion.
It’s important to note that company valuations at different stages may vary depending on market conditions, the investment climate, and other factors. For more accurate and up-to-date information, it is recommended to refer to the latest company press releases or analytical reports.
Wise for Business
In the modern globalized world, businesses face the need for fast, efficient, and cost-effective international payments. Wise, formerly known as TransferWise, provides an innovative solution that overturns traditional approaches to international financial operations.
Advantages of Wise for Business
- Transparency and Low Fees: Wise is known for its transparent policy, especially regarding fees. Business clients can significantly save on international transfers due to low and clearly defined fees.
- Real Exchange Rates: Unlike traditional banks, which often use unfavorable exchange rates, Wise offers transfers at the real exchange rate, making transactions more advantageous for businesses.
- Multi-Currency Accounts: Wise provides the option to hold accounts in various currencies, ideal for businesses operating internationally. This allows managing and converting funds in different currencies without the need for separate bank accounts.
- Convenience and Speed: The Wise system allows for fast transfers, crucial for businesses requiring prompt financial operations.
- Integration with Business Systems: Wise offers integration with various business platforms and accounting systems, facilitating financial management and accounting.
How Wise is Changing the Game
Wise for business is not just an alternative to traditional bank transfers. It is a comprehensive solution that offers the flexibility, savings, and efficiency needed for modern international business. From startups to large corporations, companies of all sizes find in Wise a tool that helps them expand their borders and efficiently manage international payments.
In the era of digitization and the global economy, Wise is a key player making international financial operations more accessible, transparent, and convenient for businesses worldwide.
The number of registered clients at Wise has grown over the years, reflecting the company’s success and expansion in the international market. Here’s an approximate overview of the customer base growth over the years based on available data until April 2023:
- 2011-2012: In the initial stages after founding, the company attracted the attention of early users and innovators seeking more affordable and convenient ways of international transfers.
- 2013-2014: After initial funding rounds and expansion into new regions, the user count began to grow, reaching hundreds of thousands.
- 2015-2016: With increasing popularity and expanding offerings, including multi-currency accounts, the customer base reached several million.
- 2017-2018: Service improvements and geographical expansion further contributed to growth, with the company boasting a multi-million user base.
- 2019-2020: Prior to the COVID-19 pandemic, the number of users continued to rise, with Wise establishing itself as a reliable and cost-effective platform for international transfers.
- 2021-2023: After rebranding to Wise and a successful IPO, the company continued to expand its customer base, catering to diverse needs in international financial operations.
For accurate and up-to-date data on the number of registered Wise clients, it is recommended to refer to the company’s official reports or independent market research. Keep in mind that these figures may change over time and depend on various factors, including market conditions, competition, and product innovations.
Main Competitors of Wise
Wise operates in the field of financial technology and international money transfers, facing competition from various players, including traditional banks and other fintech companies. The main competitors of Wise include:
- PayPal and Xoom: PayPal, a major player in online payments, owns Xoom, a service for international money transfers that directly competes with Wise in this area.
- Western Union: One of the oldest companies in the money transfer industry, offering a wide range of services, including online transfers and agent-based transfers.
- MoneyGram: Another traditional and well-known service for international money transfers, adapting to the digital market.
- Revolut: A British fintech company offering multi-currency accounts, debit cards, and other financial services similar to what Wise provides.
- N26: A German neobank offering services similar to Wise, including international transfers and multi-currency accounts.
- Remitly: Specializing in international transfers, especially for immigrants sending money to their home countries.
- Skrill: Offering a wide range of financial services, including money transfers and online payments.
- TransferGo, WorldRemit, and Azimo: These companies also specialize in international transfers and offer competitive services, especially for specific regions or transfer corridors.
Wise’s competitors offer various advantages, such as lower fees, fast transfers, user-friendly interfaces, and extensive agent networks. Strong competition in this sector contributes to innovation and service improvements for customers.
Criticism of Wise
While Wise has gained wide recognition for its innovation and transparency in the international money transfer industry, like any major company, it faces criticism and challenges:
- Commissions and Fees: Despite promoting itself as a cheaper alternative to traditional banks, some users criticize the size of commissions, especially for small transfers, where a fixed portion of the fee can make the transaction less cost-effective.
- Transfer Speeds: Although many transfers through Wise happen quickly, in some cases, the transfer speed may be slower than that of competitors, especially for transfers in less popular currencies or to countries with less developed banking systems.
- Country and Currency Restrictions: Despite its broad coverage, Wise still has limitations on availability in certain countries and for certain currencies, which can be inconvenient for some users.
- Customer Support: Some customers have expressed dissatisfaction with the quality of customer support, citing delays in responses or difficulties in resolving specific issues.
- Security and Transparency: While Wise is known for its transparency regarding fees, there have been instances where users expressed concerns about the security of their transactions and personal data.
- Policy and Terms of Service Changes: Changes in Wise’s policy and terms of service have sometimes been met with dissatisfaction from users, especially if these changes were perceived as a deterioration of conditions.
Like any other service, Wise constantly strives to improve its services and address emerging issues. Customer feedback and criticism often serve as a stimulus for further innovation and improvements in the company.
Cost of Wise Services
The cost of Wise services depends on several factors, including the transfer amount, currency pairs, payment method, and transaction type. Key pricing aspects in Wise include:
- Low and Transparent Commissions: Wise is known for its low commissions and price transparency, often using the real exchange rate (interbank rate) without markups.
- Currency Pair Type: The cost may vary depending on the selected currencies. Transfers between more common currencies usually cost less.
- Payment Method: The cost of transfer may also depend on the payment method (e.g., bank transfer, credit card, debit card). Some payment methods may entail additional fees.
- Transfer Amount: The commission may change based on the transfer amount. For small amounts, the fee may be fixed, while for larger amounts, it might be a percentage of the transfer amount.
- Transfer Urgency: The cost of urgent transfers may be higher due to additional fees for expedited processing.
- Additional Services: Services such as multi-currency accounts or debit cards may include certain fees, although Wise aims to keep them minimal.
For an accurate cost calculation for a specific Wise transfer, the company provides a calculator on its website and mobile app. Users can input transfer details to see the exact commission and exchange rate before completing the transaction. This ensures transparency and enables users to make informed decisions.
Physical and Virtual Wise Cards
Wise offers both physical and virtual cards as part of their multi-currency account. Here are the key features of each card type:
Physical Wise Card
- Multi-Currency: The card allows holding funds in various currencies, convenient for travel or online purchases in foreign currencies.
- Usage: The physical card can be used for regular purchases in stores and for cash withdrawals at ATMs.
- Security: It includes standard security features such as a PIN code and the ability to lock the card through the app in case of loss or theft.
- Global Acceptance: The physical card is accepted wherever Mastercard cards are accepted.
- Cash Withdrawal: Enables cash withdrawals at ATMs worldwide, often with low or no withdrawal fees.
Virtual Wise Card
- Online Purchases and Subscriptions: The virtual card is primarily designed for online purchases and subscription payments. It is generated in the app and has no physical form.
- Internet Security: As this card is exclusively used online, it provides an additional level of security, minimizing the risk of physical card theft.
- Instant Issuance: The virtual card can be obtained and used instantly through the Wise app, without waiting for the delivery of a physical card.
- Management Convenience: Users can manage and track transactions directly through the Wise mobile app or web platform.
Both cards are linked to the Wise multi-currency account, allowing users to conveniently manage their funds in various currencies and make international transactions with low fees and favorable exchange rates. The use of Wise cards may involve certain restrictions and fees, depending on the user’s country and the nature of the operations.
The Wise interface is designed for ease of use and transparency, key factors in the company’s success in the financial technology sector. Interface features include:
- Simplicity and Intuitiveness: The Wise interface focuses on user convenience, featuring a simple, clean, and intuitively designed layout that makes money transfers and account management easy.
- Mobile App and Web Platform: Wise offers both a mobile app and a web platform, providing a full set of features for users to make transfers, manage accounts, and track transactions on both computers and mobile devices.
- Cost and Rate Transparency: One key interface feature is the clear and straightforward presentation of transfer costs. Users can see the exact commission and exchange rate before making a transfer.
- Multi-Currency Support: The interface supports managing accounts in various currencies, allowing users to easily switch between different currencies and track their balances.
- Security: Security is a crucial aspect, and the interface includes security features such as two-factor authentication, automatic logout, and data encryption.
- Customer Support: The interface provides easy access to customer support through various channels, including chat, email, and phone.
- Personalization: Users can customize their profiles and preferences, making interaction with the platform more comfortable and efficient.
- Information Resources: Wise also offers educational and informational resources, such as guides, FAQs, and usage tips.
The Wise interface is regularly updated to enhance the user experience and introduce new features that align with evolving user needs and market trends.
Security Measures at Wise
Security is a top priority for Wise, especially considering its involvement in international money transfers and financial operations. Here are some aspects and measures Wise applies to ensure security:
- Regulatory Compliance: Wise is licensed and regulated by financial authorities in each country of operation, complying with anti-money laundering (AML) and know your customer (KYC) requirements.
- Data Encryption: Advanced encryption methods are employed by Wise to protect users’ personal and financial information, preventing unauthorized access to customer data.
- Two-Factor Authentication (2FA): For additional account protection, Wise offers 2FA, requiring additional identity confirmation during login or important operations.
- Transaction Monitoring: Wise continually monitors transactions to detect suspicious or unusual activity, enabling a quick response to potential fraudulent actions.
- Educational Resources: The company provides customers with information and resources on security, helping them recognize and avoid fraudulent schemes.
- Secure Infrastructure: Wise utilizes secure servers and infrastructure, ensuring a high level of security in data processing and storage.
- Customer Support: In case of security-related issues or questions, customers can contact Wise support for assistance and guidance.
- Continuous Security Improvement: Wise consistently works on improving its security measures and technologies to protect customers from new threats and challenges in the evolving digital world.
However, as with any financial system, Wise users should also take precautions, such as using complex passwords, being cautious of phishing attempts, and regularly checking their accounts for unauthorized activity.
Wise Payments Limited is authorized by the Financial Conduct Authority (FCA) in the UK as an Electronic Money Institution (EMI) under registration number 900507. TINV Limited is authorized by the FCA for investment services under registration number 839689.
Wise Banking License
As of 2023, Wise does not possess a full banking license. While Wise was initially created as a service for international money transfers and expanded its services over time, including multi-currency accounts and debit cards, it does not function as a full-fledged bank.
Instead of a traditional banking license, Wise operates as a licensed payment institution. This means the company is regulated by financial supervisory authorities in various countries of operation, adhering to local norms and standards in financial services. However, it does not offer a complete range of banking services, such as providing loans or accepting deposits.
Obtaining a full banking license would require Wise to meet additional regulatory requirements and possibly make significant changes to its business model. Currently, there is no information indicating that Wise is actively seeking a full banking license.
Users should refer to the latest information on Wise’s website or app for the most accurate and up-to-date details.
Creating an Account on Wise
Creating an account on Wise is a relatively straightforward process. Here is a step-by-step guide:
- Visit the Website or Download the Wise Mobile App: Go to the official Wise website (www.wise.com) or download the Wise app from the Google Play Store or Apple App Store.
- Start the Registration: Click on the “Sign Up” or “Create Account” button.
- Enter Basic Information: Input your email address, create a password, and, if required, provide your mobile number. Some regions may also ask for your country of residence at this stage.
- Confirm Your Account: Check your email and/or SMS messages for a confirmation link or code and follow the instructions to confirm your account.
- Fill in Additional Data: Wise may require additional information, such as your full name, date of birth, residential address, etc., to comply with anti-money laundering rules and other regulatory requirements.
- Identity Confirmation: You will likely need to provide a document confirming your identity (e.g., passport, driver’s license, or ID card). The process may involve uploading photos of documents and/or selfies.
- Set Up Payment Methods: Add your credit/debit card or bank account as a means to conduct transfers.
- Complete Registration: Once you provide all necessary information and it is verified, your account will be ready for use.
- Use Your Account: You can now start using your account for international transfers, currency management, and other Wise services.
It’s important to remember that precise steps and requirements may slightly vary depending on your country of residence and changes in Wise’s policy. Always follow the current instructions on the Wise website or app.
Future Plans for Wise
As of April 2023, specific details about Wise’s future plans are not available. However, potential directions for the company’s development can be speculated based on current fintech trends and its previous experiences:
- Geographical Expansion: Wise is likely to continue expanding its presence into new markets, offering its services in more countries.
- Technology and Innovation Enhancement: Implementation of new technologies to improve the speed and security of transfers, as well as enhance user interface convenience.
- Development of Multi-Currency Services: Further enhancement and improvement of multi-currency accounts and debit cards, possibly introducing new currencies and financial instruments.
- Collaboration with Banks and Financial Institutions: Development of partnerships with traditional banks and other financial institutions to expand influence and convenience for customers.
- Expansion of Business Services: Strengthening offerings for corporate clients, including more powerful tools for managing international payments and currency risks.
- Focus on Regulatory Compliance: Maintaining and strengthening compliance with regulatory requirements in various jurisdictions, critical for customer trust and sustainable growth.
- Integration with Blockchain and Cryptocurrencies: Possible exploration and integration with blockchain and cryptocurrency technologies, considering their growing influence in the financial sector.
- Improvement of Customer Support: Continual improvement of customer support, including prompt issue resolution and a personalized approach to each customer.
- Social Responsibility and Sustainable Development: Reinforcing a focus on social responsibility and sustainable development, becoming increasingly important for modern companies.
These are speculative directions, and Wise’s actual future plans may be influenced by various factors.
Overall Evaluation of Wise
As of my last information update in April 2023, the overall valuation of Wise was around $11 billion. This valuation was achieved during their Direct Public Offering (DPO) on the London Stock Exchange in 2021.
However, this valuation can change over time depending on factors such as the company’s financial performance, the overall state of financial markets, the competitive environment in the fintech and international money transfer sector, and investor interest in the company and its stocks.
Wise in 2023: Financial Performance
In the financial year ending in March, Wise, a financial services company founded by Estonians and listed on the London Stock Exchange, experienced a 51% year-on-year increase in turnover to €984 million. The company’s post-tax profit more than tripled, reaching €132.6 million.
Approximately 10 million customers utilized Wise’s services in the past financial year, a 34% increase compared to the previous year. The company conducted international transfers totaling around €122 billion.
According to Wise’s co-founder, Kristo Käärmann, Wise handles only a fraction of potential cross-border transactions, indicating considerable growth opportunities in the future. Käärmann mentioned that Wise is currently focused on developing the infrastructure for money transfers, aiming to achieve economies of scale. The company presently has partnerships with 70 banks worldwide.
Wise’s Chief Financial Officer, Matt Briers, stated that the company’s active customer base tripled in four years, contributing to both the growth in turnover and profit.
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