London-based TransferWise is a pretty smart operation. Backed by PayPal co-founder Peter Thiel and led by former Skype director Taavet Hinrikus (pictured above), the financial technology firm allows users to bypass the banks’ largely unjustified fees for international money transfers.
On Tuesday, TransferWise gave an update on its progress: the service has now been used for the “peer-to-peer” transfer of over £250 million ($399 million) and its customers are transferring over £1 million ($1.6 million) each day on average.
It also outed its first proper mobile app, for iOS — yes, it already has an Android app but that’s little more than a shortcut to the TransferWise mobile website. According to Hinrikus, the Android app was an “old trial” that will be removed from the Google Play Store shortly; a proper Android app is under development now.
But wait, there’s more…
On top of that, TransferWise has now also added more currencies — the Indian Rupee, Australian Dollar, Singapore Dollar and Turkish Lira — and brought in the ability to send money internationally to an email address rather than requiring bank details (a bit like PayPal, actually). Also, you can now embed a TransferWise payment button on your website and…
Hang on. Is TransferWise morphing into PayPal?
“I wouldn’t quite agree,” Hinrikus told me Tuesday. “We’re doing things just to make it easier. It’s a complaint we’ve heard often from people — when sending money to a friend, they don’t have their bank details to hand. The payment button started from analyzing how our customers are using it.”
Uh-huh. Keep going…
“One typical use case we have is people who are providing services internationally — if they’re renting a villa in Greece to people in the U.K., for example.” So why use TransferWise rather than PayPal for that? “PayPal charges a hell of a lot for foreign exchange — between 3-4 percent, which I would call daylight robbery. TransferWise charges 0.5 percent,” Hinrikus said.
“PayPal is a payment method nowadays and we’re a million miles away from that. There’s a lot of work to do to help people move money internationally, and we can’t let ourselves be distracted by what other companies have done.”
OK, fair enough. But — particularly with Thiel being in the mix — it’s hard not to shake the idea that TransferWise is evolving into a PayPal rival.
After all, I’m pretty sure PayPal would still describe itself as a money transfer outfit as well as a payments firm and, certainly as far as a large segment of consumers and businesses is concerned, it’s a straight-up choice between the two.