I don’t know about you, but I always have a hard time sending money abroad. Banks are still exceptionally slow and expensive. That's why I was searching for a better solution. Here is when Lithuanian startup TransferGo caught my sight.
TransferGo is a money transfer service, which was launched in 2012 by Daumantas Dvilinskas, Justinas Lasevicius, Arnas Lukosevicius and Edvinas Sersniovas. Before working on this project, Daumantas and Justinas had a traditional import/export business which had a huge set back due to lost payment for one of the suppliers. According to Daumantas, this mistake, which almost cost his business, was made by one of the major retail banks in the UK. Soon after that, they realised that there is a big problem to solve. Money transfer across borders should be simple to execute and fast to receive.
Compared to international money transfer, which, depending on a bank can take from 2 to 7 working days, TransferGo guarantees next business day delivery, but keep in mind that up to 90% of their transfers are actually transferred same day. The quickest transfer that they have ever made was 1.17 min. Regarding transfer fee - most of the banks charge the transfer fee which can go as high as $15.00, sometimes it also depends on the amount one is sending. However, the most important thing to know and understand that banks hide their cost in the exchange rate which on average is around 5%. TransferGo only charges 0.2-1.3% on FX depending on the amount you send and a fixed transfer fee of $1.3.
TransferGo uses a digital account-to-account business model. “Funds are paid in locally and then paid out locally. This innovative system means that company does not have to send money across borders. The sender makes a local payment to TransferGo, which then makes a local payment to the recipient, from any account to any account.” - states Daumantas Dvilinskas, CEO of the company. With this mindset TransferGo, in 3 years of existence already attracted 100,000 registered customers, having transferred more than $150 million. Their primary market is the United Kingdom which remittance market in 2014 was worth $ 25 billion.
I was curious to learn more about this London-based startup, so I decided to compare it with Paypal - leading money transfer service in the world and Bitcoins - most popular cryptocurrency, as they are growing very rapidly, especially as they are fast and cheap.
TransferGo vs. Paypal
In opposition to Paypal, TransferGo infrastructure doesn’t require neither sender nor receiver to have any special accounts, so their service can be used by anyone anywhere who owns a bank account. “Therefore, TransferGo it’s a more accessible service for the consumers.“ - Daumantas adds. In terms of prices, PayPal is way more expensive, as it charges 2.5% of currency conversion, plus 3.9% of the sum that is transferred.
TransferGo vs. Bitcoins
Bitcoins are tricky business for some of us, so TransferGo is a simpler solution. To send bitcoins from one country to the other is most of the time free, but the deposit/withdrawal to your bank costs around 1% - 2% depending on the service that you are using. Also, it might take up to three days. Daumantas doesn’t see Bitcoins as their competitors: “The money physically needs to appear in our client’s account as quickly as possible. Cryptocurrency doesn’t solve for that.”
This year for TransferGo is all about growth. They want to expand from 42 countries to 100. This Lithuanian startup is expanding across major markets within Europe with a 20% monthly growth rate. “We want to grab market share in the biggest corridors there and prepare everything for going global. We want to offer our service for all major currencies in the world and help migrants across the globe not just in Europe. Our plans are to scale horizontally into other cross-border markets. One example of that is our latest product TransferGo for Business, which serves small and medium businesses, with tailored B2B industry leading product offering.“ - Daumantas shares.
Overall, TransferGo looks like a perfect solution if you are looking for an easy way to send money across borders.Back to news