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TransferWise keeps growing money transfers despite global turbulence

You dont have to follow the financial technology industry or work with developers in faraway lands to know TransferWise, arguably the worlds leading peer-to-peer money-transferring startup. Thanks to its presence in more than 70 countries, low-cost rates for moving money internationally and, of course, its famous nothing to hide PR campaign that featured its semi-naked employees running through the streets of London and New York, TransferWise has become one of the worlds most recognizable fintech brands. Along the way, the company helped usher in the age of the rebel-fintech adolescent startup that could compete and win against dusty incumbents on the basis of transparency, value, technology and, perhaps most importantly, moxy.
But today, the macroeconomic, business and political conditions that served as the feedstock to co-founders Kristo Kaarman and Taavet Hinrikus when they launched TransferWise are ancient history. Can it keep scaling amidst heightened trade tensions, the unfortunate rise of xenophobia and capital controls? Will it continue to grow profits in the face of competition from other well-funded fintech startups and incumbents that look less dusty? Does the company, which has recently launchedimportant partnerships, a revamped borderless business offering and a Mastercard debit card, have aspirations to provide other financial services? And, why isnt TransferWise public? In the interview below, CEO Kaarman addresses these questions head-on. In doing so, the Estonian native makes the case for his companys future as a trusted partner for its dedicated (and growing) customer base.
Gregg Schoenberg: Its good to connect, Kristo. I recently took a look at your financials, which show that despite your fairly large size, youre still growing at a very fast pace.
Kristo Kaarman: Yes, things are going very well. Tracking back to the very early days when we started, our hypothesis was that we can service customers about 10 times cheaper than banks. That was really proven out about two years ago when we reached break-even, which is an important proof point: tech thats paying for itself. Its not paid for with investors.
GS: So it actually works.
KK: Yes, this thing actually works. In fact, in our original hypothesis, we thought that we could probably do our biggest trade routes for 0.5 percent in fees. Weve now revised this and are now operating at 0.3 percent in our largest routes.
GS: I assume thats all in? Because TransferWise always uses the mid-market or spot rate.
KK: Yes, and from the beginning, weve taken the approach that we never hide anything in the spread.
GS: Before we leave the topic of your financials, is there any color that you would care to give on how things are going subsequent to when you reported your numbers?
KK: Things are going in the same direction, which is consistent with the mission of the company: Grow the volume and the customer base, which gives us more scale to enable us to charge skinnier and skinnier margins.
GS: Taavet has said that he knows the moment when TransferWises transaction volumes will surpass Western Unions. When is that?
KK: Were a little bit behind Western Union, but give us a few years.


Whats more powerful? Anti-trade factions or the natural forces leading us to become more global?
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