Why I think TransferWise is built to last

23.05.18
4 minute read

On the left taking TransferWise customer service calls in 2016 is Jesse Beyroutey, TransferWise board member and investor. And guest author of this post.

Money is just information. And, these days, moving information around costs so little it’s essentially free. Yet the prices of moving data and money are nowhere near equal even in 2018.

It costs you nothing to send a text message to your friend. It doesn’t matter if the text says “I’m sending you $1,” or “I’m sending you $10,000.” Moving those extra zeroes around didn’t increase the cost of the text. So why should it be any different to send $1 and $10,000 in actual money?

The answer is trust. Sending $10,000 needs more trust than sending $1, because $10,000 is a whole lot more meaningful to sender, recipient, and society than $1.

Are you actually who you say you are? Will you actually do what you say you’ll do? Can society trust that you’re not up to something nefarious with your $10,000?

TransferWise is on a mission to prove that trust is just information, too. It can be just as easy to trust someone with $1 as with $1,000,000 in our global Internet society.

TransferWise built a service that knows you’re trustworthy, no matter what country you’re from. It has enough information for everyone – your friends, business partners, customers, banks, and governments – to trust you whether you’re sending a little or a lot. Every obstacle is an opportunity for TransferWise to use information to create more trust.

Someone, somewhere will reduce global money transfer costs to 0

The nice thing about trust is that it can be achieved with just information and software. Both have only a fixed upfront cost to create once. And cost nothing more to run over many people and transactions.

As a society, we don’t need many different companies to build that piece of infrastructure. In fact, it’d be better if it was a single entity that everyone could use and trust. After all, trust has a strong network effect. The more people who can be trusted, the more want to use the same network to trust those people.

Eventually, it would be efficient for one entity to take over the global money transfer market. That entity will be able to spread those upfront software and information costs over such a massive number of transactions that they’ll be able to substantially reduce the price of money transfers. Inevitably, with a large enough amount of transactions, that player will, in essence, reduce money transfer costs to zero. And that will be great for everyone.

Market dominance comes with a choice

Whatever entity that can reduce the cost of trust to zero will become an indispensable, global service that’s a core piece of our society.

But if a for-profit company becomes the dominant global player, it doesn’t mean society will let them stay there.

Most companies that have created a monopoly charge high prices. Eventually, those high prices on an essential service lead customers to look elsewhere, or society regulates their profits because they can’t be trusted to behave in society’s best interests.

The right kind of company chooses on its own to be aligned with society’s interests over the long term, often at the expense of short-term profit seeking. Such a company earns the right to operate an essential service by charging a low, sustainable margin and reducing prices as its costs come down.

Only the company’s culture will determine which path it will take.

This is where, as both an investor and board member, I am extremely proud of TransferWise.

How TransferWise culture will determine its future

TransferWise’s very pricing strategy reflects their values of transparency and equality. They treat you as you would a close friend or family member – with utmost respect and care.

That means they make 6 big promises to customers.

TransferWise:

  1. Guarantees the same price everywhere. No matter how customers find TransferWise, the price is always the same whether it’s through partners or on the TransferWise website.
  2. Shows all fees clearly and upfront. No sign-up necessary.
  3. Shows how they compare to their competitors. They do the work for the customer.
  4. Is honest when they're more expensive than other options.
  5. Works tirelessly until they are the best option.
  6. Makes TransferWise even better, even when it’s already the best option. Reduces prices even further as costs to serve customers decrease – no matter what competitors do.

TransferWise stands for the lowest price and best experience for money transfers in every market. It’s in their mission, it’s in every conversation at their headquarters, and it’s in every TransferWise team member’s blood. They won’t stop until they deliver on their mission.

As a customer, you can trust you’ll be treated well, get the best price with TransferWise, and trust that your experience will always be getting better – which makes you come back again and again. With TransferWise delivering on that promise, and continually working to lower your fees, it’s hard for other companies to compete.

All of this makes TransferWise a strong, valuable brand – a company I’m convinced will stand the test of time.

transferwise growth model

In time, I believe TransferWise will deliver a continually-improving experience, reach an exponentially growing number of customers, reduce money transfer costs to unimaginable lows, and arrive at their mission of zero-cost, zero-hassle money movement for all.

And when they get there, the positive impact they’ll have on TransferWise customers, on TransferWise employees, on TransferWise investors, and on the very world itself will be a sight to behold.

I, for one, am glad to be a part of this revolution. #onwards

Jesse Beyroutey, IA Ventures
TransferWise board member and investor

TransferWise is the smart, new way to send money abroad.

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