New ‘Borderless’ Accounts From TransferWise Make It Easier To Bank Overseas
Banking across borders used to be an expensive pain in the neck until TransferWise found a better way to do it. The London-based startup matches users in one country who want to move money abroad with counterparts in another who want to move cash in the opposite direction. Instead of dealing with exorbitant wire fees at a bank, TransferWise charges 1% or less.
The service is so popular among expats that TransferWise has become not just a unicorn (a startup valued over $1 billion) but a profitable one too. Now the company, which is backed by big names like Andreessen Horowitz and Richard Branson, is moving into banking for businesses.
On Tuesday, TransferWise announced “Borderless accounts,” which allow a business to have a local bank account in up to 15 countries, and pay and receive money, without having to step foot there.
In practice, this means that a tech company in Paris can easily pay a developer in Sydney in Australian dollars, and its designers in Zurich in Swiss francs. Or an artisan in Texas can let its customers in London or Singapore pay her by transferring currency to a local bank. Here is how it works:
“The Borderless account is like having a local bank account in any country without ever having to set foot there. Businesses can keep money in 15 different currencies and, in seconds, get local account details (i.e. a unique account and routing number) for the UK, Europe, and the US,” TransferWise said in a news release.
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According to Joe Cross, the company’s general manager for the U.S., the Borderless accounts will provide a new low-cost way for small and medium-size businesses to do global banking.
“It attacks the problem that traditional bank accounts only work in one country,” he told Fortune. The new service, he said, offers business a cheap and relatively pain-free way to create account and routing numbers in multiple countries.
Companies that want to offer banking services face a raft of regulatory requirements such as anti-money laundering rules and “know your customer” laws—which is a complex and expensive task. But TranserWise, which debuted in 2011, says it already has the compliance tools in place thanks to its experience serving consumers.
The launch of the business accounts comes months after TransferWise announced a service to let consumers transfer money overseas using an automated messaging service from Facebook known as chatbots.
The company says Borderless accounts will be available starting today in Europe and the U.K., and in the U.S. starting in June.
As for fees, TransferWise says there are no set up or monthly charges, and that there is no fee to receive money. It says there is a “small transparent fee” to send money (the company doesn’t say how much), and that it transfers the money at the actual mid-market exchange.
Here is a full list of currencies that business customers will be able to move around through the Borderless accounts:
British pound, Euro, U.S. dollar, Australian dollar, New Zealand dollar, Japanese yen, Hong Kong dollar, Singapore dollar, Canadian dollar, Swiss franc, Polish zloty, Hungarian forint, Swedish krona, Norwegian krone, and Danish krone.
An earlier version of this story incorrectly identified Hungary’s currency. It is the forint not the florin.