(Reuters) - London-based money transfer startup TransferWise said on Tuesday that it had been granted permission by the UK’s financial watchdog to offer retail investment services in Britain.
The company said it expects to offer its first investment product there over the next year, one that will enable customers to invest money stored in their multi-currency accounts into affordable funds by established providers.
Money held as investments of a value up to £85,000 will be protected under the Financial Services Compensation scheme, the company said.
The move into investment services makes TransferWise the latest financial technology startup to branch out into offering a wider range of financial products. Online investment managers Betterment and Wealthfront recently started offering cash or checking accounts, while student lender SoFi expanded into offering stock trading.
Founded in 2011, TransferWise is one of Europe’s most well-known financial technology startups. It has over 8 million customers worldwide and processes £4 billion ($4.96 billion) in cross-border transactions every month. It gained popularity among consumers because it offers a more user-friendly and less costly alternative to banks for international transfers.
Since 2017 it has offered multi-currency accounts which allow customers to store money in 54 different currencies. Customers are increasingly using the product as an alternative to international bank accounts and they have £2 billion ($2.48 billion) in deposits with the services, the company said.
“We’re seeing people use the account as an alternative to setting up multiple bank accounts abroad,” Kristo Käärmann, co-founder and Chief Executive of TransferWise, said in a statement. “That means they’re holding more money in their borderless accounts, and for longer.”
Adding investment features will enable customers to generate potential returns on those deposits, TransferWise said.
Reporting by Anna Irrera; editing by Grant McCool
Our Standards: The Thomson Reuters Trust Principles.