Transferwise, a top UK based Fintech and transfer/payments platform, has received Financial Conduct Authority (FCA) approval to offer retail investment services, according to a report.
Transferwise has emerged as a global stealth bank providing border-free currency services with ultra-low-cost transfers attacking the domain of traditional finance with great success. Currently, Transferwise users may hold funds in various currencies and move money around without egregious exchange rates and excessive fees. The one thing missing from Transferwise’s tech stack is a sweep account or investment service for cash holdings but apparently this feature will be made available at some point in 2020. Transferwise expects to first offer the service to UK customers with the rest of the world following.
According to CNBC, TransferWise CEO and co-founder Kristo Käärmann said a problem with the platform has been its inability to generate a return on parked cash. Transferwise is expected to “launch a service that lets users of the account invest passively in investment funds from third-party providers” in the not so distant future.
This is big news as Transferwise caters to over 8 million customers who transfer over $5 billion every month with £2 billion held in accounts. A multi-currency account is free whereas big banks like JPMorgan/Chase and Citi tend to charge silly fees, not to mention the cost of spending money in a foreign currency. Free ATM withdrawals and a debit card are part of the equation.
At some point in the distant future, you will be able to hold money in your Transferwise account and generate income. So why would you ever want to use an old bank? If you are part of the digital generation its hard to ignore.