Dive Brief:
- London-based online money transfer service TransferWise is broaching the U.S. banking market, the company said Thursday, years after fashioning itself as a Robin Hood-like rival to banks.
- Stanford Federal Credit Union and small-business neobank Novo will become the first U.S. financial institutions to integrate the company's application programming interface (API) in the coming weeks, TransferWise said. The company claims its platform offers international transfers to more than 70 countries in 40 currencies at a cost that is up to eight times cheaper than what traditional banks charge.
- European challenger banks Monzo, N26 and Bunq have already integrated TransferWise's platform. Estonia's LHV and France's Groupe BPCE have also partnered with the company.
Dive Insight:
TransferWise's API will let consumers initiate money transfers without leaving their bank or credit union's mobile app.
"TransferWise has always been about giving people and businesses access to the best possible payments experience that we can provide them," Murali Akella, TransferWise’s head of banks, said Wednesday, according to American Banker. "The more we thought about it, the most logical place to expand our services to was banks and credit unions, and make this available to those entities."
The company's position now is a stark turnaround from when it established a U.S. office in 2015. Fancying itself a disruptor to the banking market, TransferWise staged a publicity stunt during which staffers stripped to their underwear and ran through New York City's streets to show they had "nothing to hide," an apparent jab at traditional banks' fees.
Customer feedback led the company to avail itself to banks and credit unions, said Harsh Sinha, TransferWise's chief technology officer, according to American Banker.
"We continued to iterate on what customers were telling us they wanted," Sinha said. "We started hearing from customers, why can't you be in my bank app?"
Paul James Jockisch, Stanford Federal's chief financial officer, said the credit union's members were already using TransferWise to make international transfers. The credit union lets members access an international payment platform through partnerships with Wells Fargo and Western Union. But that setup increases the cost to consumers beyond the regular foreign exchange rate fees.
"One of the questions that we get from members is, why am I not getting the exchange rate that I Google online?" Jockisch told American Banker.
TransferWise's latest move is another example of a growing number of U.K. financial firms attempting to make inroads across the Atlantic. London-based fintech GoCardless, which lets businesses set up recurring bank payments from customers online, announced its U.S. rollout last week. Monzo launched in the U.S. in June.
