TransferWise, a European startup that offers expats, students and businesses a low-cost money transfer service, has announced it is expanding to enables users to make foreign currency payments through their debit cards. Before the new feature was introduced, users were required to log into their financial institutions in order to initiate a push transaction. Now, however, TransferWise users can use peer-to-peer technology and avoid cross border bank fees.
“By providing a service that is now substantially better in all three core metrics (ease of use, price, speed) we are showing the consumers how much better financial services are being done outside the banks,” says TransferWise co-founder Taavet Hinrikus. The success of TransferWise has not gone unnoticed; it was awarded the Europa award for ‘best middleweight startup’ of 2012 and in its short two year history, TransferWise has transferred over £50 million ($75 million) in currencies ranging from the Euro, to the Dollar to the Norwegian Krone.
By charging a mid-market exchange rate, TransferWise is capitalizing on a growing consumer trend that is seeking low cost alternatives to international transactions and forcing banks and other financial institutions to rethink cross border fees. Like Skype (which co-founder Taavet Hinrikus was at one point, Director of Strategy) TransferWise has the potential to shake up the cross-border transaction market with its low cost consumer approach.
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