Wise Money Transfer Expands Global Operations After India Launch
The launch of Wise money transfer services in India shows that the UK-based remittance company is looking to expand its operations worldwide. The low-cost international money transfer service entered the Indian market with its Mumbai-based office that started services from the 1st of June, 2021. Wise money transfer has received approval from the Reserve Bank of India (RBI) to commence its services by partnering with a local bank. Therefore, it has partnered with RBL bank, allowing Indians to transfer money under the Liberalised Remittance Scheme (LRS).
Users from India will now be able to send money to 44 countries. This includes the US, the UK, UAE, Singapore, Malaysia, and some countries in the Eurozone. Furthermore, the service is available on various platforms like Android, iOS, and the web. Wise co-founder and CEO Kristo Käärmann says that this is a big step forward for Wise money transfer’s mission in easing global money transfers. Likewise, since Indians are becoming more international than ever, having a cheap and pleasant global money transfer service is crucial.
Company Background and History
Wise, formerly known as TransferWise, was founded by Kristo Käärmann, an Estonian financial consultant and businessman, and Taavet Hinrikus in 2011. Their revolutionary idea came as a result of constant frustration due to higher fees and bad exchange rates adopted by banks.
Wise money transfer has had a fair share of spotlight since its inception in 2011. It was already making headlines as one of the hottest tech startups in various magazines across the UK. In 2012, it was included in the top 100 startups in the UK by Startups.co.uk. Within 2015, it was inside the top 10 of CNBC’s Disruptor 50 list, which means it was constantly building a prosperous future.
Wise money transfer already had about 10 million euros in transactions during its first year of operation. Today, it allows holding and converting money in 54 currencies and sending money to 80 countries throughout the world. Likewise, it has more than 10 million customers throughout the world. Similarly, cross-border transactions exceed over 7 billion US dollars every month.
On 7th July 2021, it went public through a direct listing on the London Stock Exchange. The valuation was at 11 billion US dollars.
The Indian Remittance Market
India is one of the world’s largest players in the remittance market. Its inbound remittance recipient market is about 85 billion US dollars a year, which is the largest in the world. Similarly, the outbound remittance market is about 15 billion US dollars a year, which is still one of the largest. Most of the outbound market is covered by expenses in travel and abroad studies. According to Venkatesh Saha, Head of APAC and Middle East Expansion, Wise money transfer has a great opportunity to bring disruption in this less invested and less explored space.
Although inbound remittance processing is easy and free of hassles, the same is not true for outbound remittances. There was a great frustration that came with the hidden fees charged by banks. The intervention of fintech has brought some sense of transparency in this matter.
How Wise Money Transfer Works
Traditionally, people who wished to send money abroad could only do it with the help of a bank. Similarly, there were a lot of hidden fees involved in addition to high exchange rates.
Wise money transfer, on the other hand, is easy and comfortable, and more transparent than most other methods. Likewise, it works differently as compared to traditional cross-border transfer methods. First, Wise has its bank accounts in several countries in the world where it holds the local currency. Therefore, when you initiate a cross-border transfer, you pay with your local currency in Wise’s local account. With a small transaction fee and suitable exchange rate, Wise will release the corresponding amount in terms of local currency in the recipient country.
For example, consider that you are sending money from the UK (GBP) to your family in India (INR). First, you pay the required amount in terms of GBP in Wise’s British bank account and enter the recipient’s bank details. Wise will then communicate with its India-based bank account, convert the sum and release money in terms of INR.
Pros and Cons of Wise Money Transfer
As with any other money transfer service, Wise money transfer also comes with its own sets of pros and cons. First, let us talk about the advantages of using this service. For smaller amounts, Wise trumps over other methods of money transfer with their very low fees. This is because they only use a small transaction fee in addition to a mid-market exchange rate. Similarly, their methods are transparent and you can check them out on the home page of the company website. As they are fully regulated, you need not worry much about the security of the transfer. Furthermore, creating a Wise account is very easy and you can do it online. Moreover, the transfer period is a couple of business days, which is quicker compared to some other methods.
On the other hand, Wise money transfer has some disadvantages too. As of now, it supports only bank transfers or debit and credit cards. Therefore, you cannot use cash and cheque. Similarly, the person on the receiving side should also have a bank account. Furthermore, if you are transferring a huge sum of money, the transaction fee, which is a percentage of the total sum, can be a problem.
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In this blog, we came across the details of Wise money transfer services in India. We learned what this meant for the people of India and how it has eased the process of sending money abroad. Then, we learned about the background and history of the company and how it has always been in the spotlight as a game-changing, disruptive innovation. Likewise, we understood the basic status of the Indian remittance market and why this is a great opportunity for Wise. Similarly, we understood how cross-border transactions work and how they are easier with Wise.
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