Online money transfer startup TransferWise announced today it is setting up its Asia-Pacific hub in Singapore.
The Singapore office will be in business by next week, starting with eight employees. The company hopes to have that number up to 30 by the end of the year. It will be hiring for a variety of roles including engineering, operations, customer support, and regulation.
This gives Transferwise a central location in Asia-Pacific, allowing it to reach more customers in the region. The city-state’s progressive central bank and fintech-friendly regulations make it an ideal place for the UK-headquartered startup to be closer to its local users and address their specific needs.
Building your own brand is damn hard.
“Whenever we launch somewhere, we make sure we build in very good feedback loops, conduct lots of research,” TransferWise co-founder and CEO Taavet Hinrikus tells Tech in Asia. The startup also places great emphasis on word of mouth, which is still a major driver of new sign-ups to the service – over 60 percent of them.
TransferWise allows its customers to send and receive money across borders for a fraction of the charges imposed on bank transfers.
To do that, it uses a peer-to-peer system that matches users according to the currencies they want to send and receive. Users’ money is credited into bank accounts the startup operates in each market so that corresponding payouts are made without funds ever actually crossing borders.
The service has been available in Singapore for some time but due to regulations, users had to verify their identity by contacting TransferWise and doing it manually. Now, the Monetary Authority of Singapore (MAS) has approved online verification for the startup. This means that people in Singapore will be able to prove who they are as easily as snapping a selfie with their phone through the TransferWise app.
“This is super cool and shows how the regulator is very responsive and really thinking about how to develop the local ecosystem,” says Taavet.
While MAS is embracing tech like the blockchain for money transfers, TransferWise isn’t jumping into it just yet. “We’ll use whatever enables us to offer the fastest payments for the lowest cost,” Taavet muses. “We’ve looked at bitcoin and the blockchain but we haven’t seen how we can use it yet.” If the opportunity arises, the startup will move quickly to use it, he adds.
State of love and trust
In Singapore, where consumer-facing fintech companies generally find it easier to partner with banks and financial institutions rather than fight them, TransferWise doesn’t count out the possibility of such deals. But they will have to be on the startup’s terms, using its branding and its pricing.
After all, customer trust remains vital to TransferWise’s business. “Building your own brand is damn hard, earning trust is hard,” Taavet says. He recalls having the first-ever article about TransferWise being published on TechCrunch in 2011, after he and co-founder Kristo Käärmann launched their product. Within 15 minutes, a customer had sent them GBP 2,000.
“Why did that person trust us? At that point, we were just two Estonian guys on the internet – and Estonia wasn’t exactly a symbol of trust. We didn’t even promise any service levels, we just said send us your money, we will try to convert it and pay out.”
Since then, the company has come a long way by building on the good will of its customers. “We focused on listening to them, on building the service, we haven’t been greedy, and as a result, we’ve enjoyed great word of mouth,” says Taavet.
TransferWise is available in 37 countries and can send money to 58 in total. The company also has offices in Sydney and Tokyo, where it launched last September. Countries like India and China are next in the startup’s radar.
It has nine offices around the world with over 650 employees in total. Its largest market remains the UK, where it claims a 10 percent share in the space of international money transfers.
The startup claims over 1 million users worldwide, moving more than US$1.3 billion every month. Taavet doesn’t break down user numbers in Asia-Pacific. TransferWise has raised over US$117 million in funding from investors including Andreessen-Horowitz, Bailee Gifford, and Valar Ventures. After its last fundraise, in May 2016, it’s valued at US$1.1 billion.
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