The financial and technology company TransferWise has obtained a license from the UK market surveillance agency to provide retail investment services to customers.
A London company began its life as a means of internationally sending money online. In 2018, he made a deeper push in the banking sector by offering a multi-currency account without borders tied to a debit card. Users have already contributed £ 2 billion ($ 2.5 billion) to the account.
TransferWise is now planning to launch a service that allows users to passively invest in third-party investment funds. On Wednesday, the company said it had received permission from the UK Financial Conduct Authority for investment transactions.
“About three or four years ago, we saw that people, and especially enterprises, not only send money, but also receive money at the international level,” said TransferWise CEO Cristo Kärmann and co-founder of TransferWise in a video call.
Kyarman said the problem that platform users have recently encountered is finding a way to get their money back. He added that TransferWise wanted to use a different approach to traditional banks, which issues customer deposits and charges interest.
“This is not to say that if you put money into a savings account at a bank, the money there will magically grow,” said Kärman. “It will still be invested in something.”
TransferWise is not the only fintech startup looking to conquer the investment industry. Many other companies, such as Robinhood, Revolut and eToro, have gained popularity due to their features with zero commission and cryptocurrency trading. However, Kärman says his firm is not going to act as a stockbroker.
TransferWise said it plans to launch its first investment function in the next 12 months. Although the company starts in the UK, it also hopes to bring the product internationally later.
Founded in 2011, TranferWise quickly rose and became one of the leading European startups, receiving last year a valuation of $ 3.5 billion. The company claims to have 8 million users worldwide and processes monthly transactions worth £ 4 billion. Its investors are Andreessen Horowitz, Richard Branson and Peter Thiel’s Valar Ventures.
Although the tourism industry paused this year due to the coronavirus pandemic, Karman said TransferWise still expects to make annual profits in its 2020 reports. The company has been profitable for three consecutive years, but the big point in selling its multi-currency debit card is the ability to convert into local currency while traveling.
“We were somewhat humiliated and proud that our clients are financing our mission,” he said. “They continue to execute TransferWise through the fees they pay; they pay us salaries; they allow us to hire more people and grow the product.