LONDON (Reuters) - Money transfer company TransferWise said on Tuesday it is launching a low-cost “borderless” account and debit card in the first quarter of this year, in its latest bid to win customers by undercutting the foreign exchange fees charged by banks.
Users will be able to hold and convert 28 currencies at the real exchange rate with the account, TransferWise said.
Fees to convert funds into foreign currency, send them overseas or withdraw cash abroad have amounted to billions of dollars in income for banks globally, but critics say services are slow and often contain hidden charges.
A number of smaller firms have rapidly attracted businesses and consumers by offering quicker and cheaper alternatives.
TransferWise is one of the most successful, growing to become one of Europe’s largest financial technology firms.
It became profitable for the first time last year and was valued at $1.6 billion in its most recent funding round in November.
The group is backed by Old Mutual Global Investors and Silicon Valley venture capital firm IVP. Media reports have said founders plan to float the firm in the coming years.
“For the first time we’re bringing true multi-country banking - with real bank details in key currencies - to anyone who needs it,” Taavet Hinrikus, chairman and co-founder of TransferWise, said.
Until now, consumers using TransferWise could only send money overseas. Users pay into the firm’s account at home, and TransferWise pays the sum out of its bank account in the recipient’s local country at the real exchange rate.
Reporting by Emma Rumney; editing by Alexander Smith