Transferwise has stepped in, which it stopped a year ago – we found out what’s behind it

He became an investment provider from Transferwise

On Wednesday, Transferwise, a popular international money transfer application in Hungary, announced that they were trying out something completely new and enter the retail investment sector.

British fintech with an office in Budapest also received permission from the FCA, the UK Financial Supervision Authority, to start marketing investments, and their clients also receive deposit protection of up to £ 85,000 per account. The service would be available to customers with a Borderless card. We wrote about the announcement itself here:

We tried to find out at Transferwise exactly what investment products they wanted to sell to the public, and how Balázs Barna, the head of European expansion, revealed that in the first round they want to offer investment funds managed by cheap, reliable asset managers to their investors.

We offer tools that meet Transferwise’s principles of speed, transparency, convenience and pricing

Said the driver.

Based on his words presumably these would be primarily ETFs, these exchange – traded funds broadly meet these criteria. Chances are, even Transferwise hasn’t decided exactly which providers they want to work with in this area, the palette is quite wide, so we can’t even speculate.

It’s worth noting that one of Transferwise’s main competitors, Revolut, expanded its value offering with a limited free stock trading platform a few years ago, and recently opened a gold trading and cryptocurrency trading feature for its free customers:

There wasn’t even a word about it a year ago

Last year, when we talked to Balázs Barna, we also asked if they wanted service diversification like their competitors, for example by offering stocks and ETFs to clients. At the time, the leader even said he had no such plan, as they wanted to be the best in the field of international remittances:

Now Transferwise is still entering the securities market, for this according to Balázs Barna, the reason is that many of the company’s eight million customers have requested the introduction of the service in the past year. We also asked if the coronavirus had anything to do with the intention to diversify, but the leader did not provide a clear answer.

The question is important because Many fintech companies have begun to diversify with steam power to alleviate the loss of revenue due to the coronavirus. With the decline in international tourism, revenues from currency exchange applications such as Revolut have declined significantly, which is also the main reason why many premium services were previously opened to the public, one of their rivals, Curve, starting to market insurance with AXA. which also pay for a coronavirus infection if it is caught and treated abroad:

At Transferwise, by the way, the problem may not be so great, while many of their competitors have started downsizing or unpaid leave, fintech is still recruit is.

What are the long-term plans?

It will be about a year before the investment product range becomes available to Transferwise UK clients, how quickly the package reaches Hungarian users depends primarily on whether the fintech company manages to pass the FCA license, if at all possible after the British exit.

Balázs Barna told us so much that the passport for the permit had already begun, so there are definitely plans to internationalize the investment palette, but it can even be a matter of years.

We also asked if they plan to expand the product range with other tools such as stocks, cryptocurrency or gold over the next 2-3 years; they replied that their mission was to achieve a free and convenient international cash flow and to apply their aspirations in the investment and savings market as well.

Based on this it is possible that in the future investment instruments other than ETFs will be available to Borderless clients, but it may be a matter of years before it turns out exactly what devices will be available on the Transferwise platform and under what conditions. The experience gained after sharpening the investment-sound trading platform will certainly be a valuable experience for the management of the fintech company and there will be a good chance that they will decide exactly in which direction it is worth moving.

In any case, free stock trading is now a pretty hot topic, it would be surprising if Transferwise’s next step wasn’t this:

Cover image: Transferwise’s Budapest office opened last year. Photo: Transferwise