Americans can now send money abroad through London-based money transfer startup Transferwise, which launched its US operations with the opening of a New York office yesterday.
Transferwise now allows money transfers to and from the US dollar using its peer-to-peer platform. Brazil, the Philippines, Canada, Malaysia and Nigeria were also added to the platform.
The company claims that its model ensures a better exchange rate and much lower fees than those currently offered by banks, and has been campaigning to ‘clean up’ the money transfer market. Transferwise charges 1 per cent for transactions below $5,000 and 0.7 per cent for amounts above that, which means it can be on average eight times less expensive than banks, the company says.
The service is particularly popular with expats and freelancers who are paid in one currency and spend their money in another, small and medium-sized businesses and pensioners retiring abroad. Customers have transferred £3 billion using the platform, the company said, which continues to grow between 15-20 per cent a month.
The launch follows a recent $58m Series C funding round led by Andreessen Horowitz, the VC firm founded by Netscape and Opsware founders Marc Andreessen and Ben Horowitz. Transferwise committed to using this funding to boost its global expansion, and is opening offices in Germany and Australia in the coming months. It also plans to launch another 300 currency routes later in the next year
One of the company’s early employees Joe Cross will be leading the US office from a new hub in New York’s Soho West.
Online money transfer service WorldRemit, which focuses on the remittance market, announced a $100 million Series B funding round led by Technology Crossover Ventures yesterday. The funds will be used to fuel the company’s expansion through partnerships with mobile money providers in Africa, Asia and Latin America.
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