Living an international life used to be so much harder. Fifteen years ago, we lived in a world without wi-fi. Before this, it was a chore to even work from home – from abroad, it was almost impossible. Skype also didn’t exist. Back then, your loved ones could only hear your voice – and it cost them as much as 15 pence per minute.

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And, most notable of all – transferring money was horrendously expensive. In the 2000s and before, the banks (along with Western Union & Moneygram) dominated money transfer. With oligarchic control over the niche, they could charge whatever the market could bear.

Thankfully, times have changed. We can now get work done within sight of a tropical beach. We can see our parents, even when we’re halfway around the world. And, we can send cash internationally for far less.

For that last one, we can thank Transferwise. Although money transfer firms existed before them, they were the first non-bank entity to upset the established order successfully. Today, they are the United Kingdom’s most popular international cash transfer service.

How did Transferwise get its start? And why have they become so popular? In today’s blog, we’ll uncover everything behind their smashing success.

The Origins Of Transferwise

It was 2010. Ten years into the 21st century, we had Skype. We had smartphones. We had wi-fi. But, despite all that progress, banks still charged an arm and a leg for international money transfers.

That fact really ground the gears of Taavet Hinrikus and Kristo Kaarmann. These Estonian friends, who both worked in London, were sick of getting gouged. Taavet had 5% of every paycheque skimmed by financial institutions, as he got paid in Euros by Skype. Kristo had a mortgage to pay back in Estonia – and every time he did, the banks taxed him 5%.

One day, they had a Eureka moment – why not use the interbank rate to pay each other’s bills? The solution was beguilingly simple, but it worked like a charm. Not long after, they thought – how many others are getting ripped off as bad as they were?

As it turned out, scores of people, every day. After disclosing their arrangement to fellow Estonian expats, they started moving money the same way they had been doing. This response led to another light bulb moment – why not start a business around their money transfer scheme?

And so, they set to work – by the start of 2011, Transferwise’s website went live.

The Early Years

The restrictions placed on fintech startups can be onerous. Transferwise didn’t receive permission from the Financial Services Authority to offer large transfers until February 2012. In spite of this, they still had a tremendous first year.

In 2011, they managed to move 10 million EUR. Even more stunning – they did it whilst barely spending a quid on advertising. In retrospect, these results shouldn’t surprise anyone. After all, when you offer the interbank rate and charge fees a fraction of the banks, people tend to tell their friends.

This fantastic debut captured the attention of venture capitalists. In 2012, they collected 1.3 million USD from firms like IA Ventures (NYC) and Wonga (UK-based). By 2013, Peter Thiel, arguably the grand poobah of venture capitalists, invested in a funding round worth 6 million USD.

At that point, the company had moved 195 million USD around the world. But, as you already know, their biggest and best days were still ahead of them.

Transferwise Rises To Dominance

January 2017. A meeting of Santander executives takes place in Andorra – a favoured enclave of the rich and powerful. Up for discussion, among other things, was their international money transfer unit.

According to an internal memo, fees and margins on international cash transfers netted them 585 million EUR in 2016. In that meeting, though, Santander’s Innovation Director warned of choppy waters ahead.

Transferwise, a new upstart on the global finance stage, was charging six times LESS than they were. If they ignored them, this company would eventually steal a significant chunk of its market share, impacting profits.

Santander’s rates haven’t budged an inch since then. So, it’s fair to say that their senior execs ignored the poor sod. He was right to be scared, though. In 2017, co-founder Taavet Hinrikus estimated that Transferwise had captured 8% of the UK money transfer market. That year, they were moving 800 million GBP – per month.

By May of that year, they announced a momentous milestone. For the first time since founding, they had turned a profit. At the same time, they ploughed forward with another innovation – The Borderless Account. With this, they moved beyond transfers, giving freelancers and entrepreneurs worldwide unprecedented financial flexibility.

They rode the exponential growth curve into 2018. By September, they had doubled their customer base from two to four million. They also revealed that they were moving a mind-boggling 4 billion GBP per month. By some estimates, they were the world’s second-largest non-bank money transfer firm, rivalled only by Western Union.

Why Do We Love This Money Transfer Provider?

“I hate saving thousands of pounds per year” – said no one, EVER. That’s one reason our fellow Britons have taken to Transferwise so readily.

We are a nation of travellers. Ever since Britannia ruled the waves, we’ve had the itch to explore. Whilst most return, some set up a life abroad. Others start businesses that have international customers and vendors. And many decide to purchase property on the Continent.

All of these arrangements involve international money transfers. When you offer savings that can give back hundreds of pounds per transfer, it’s easy to sign up customers. However, many of these converts have stayed on board, thanks to Transferwise’s easy-to-navigate design and excellent customer service.

Hesitant to trust accounts on sites like Google or Trustpilot? Around the internet, you’ll find plenty of glowing expert reviews too, on sites like MoneyTransferComparison.com. Check them out and judge for yourself!

Enable Your International Life: Use Transferwise

Life’s too short to limit yourself to just one country. A world of opportunity lies beyond our shores – with services like Transferwise, getting started needn’t be so expensive.