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TransferWise started out as an upstart processor enabling international remittances, but now it’s expanding into a much bigger arena. On Tuesday, it announced the availability of virtual accounts that let small businesses pay and receive payments internationally as if they had a local account.
The service, called Borderless Account, covers 15 currencies to start with. It works in the United Kingdom and Europe for now and will begin what the company calls a “gradual” addition of the U.S. market next month. Australia, Canada, and “others” are coming later in the year, the company says in a press release. The account will be offered to consumers as well, TransferWise says, later in the year.
The move beyond remittances also involves a move beyond purely digital services, as the company is introducing a debit card to go with its Borderless Account. The card will be available for both consumers and businesses.
“The infrastructure we’ve built can help people do more than just transfer money. It can help them manage their international finances completely differently, giving them more freedom and control,” said Taavet Hinrikus, chief executive and cofounder of TransferWise, in a statement. “Business banking is notoriously expensive and difficult to set up and manage. Based on what we heard from our customers, we thought TransferWise could do something to help.”
TransferWise is joining what appears to be a trend. A rival processor, Flywire Corp., in March introduced a cross-border business-to-business payment service based on a similar local-account concept.
Launched in 2011 and based in London, TransferWise now has nine offices around the world and 700 employees, including 100 in the United States. It is processing $1 billion monthly in money transfers and achieved profitability this year, according to its release.
Financial accounts aren’t the only complexities businesses confront in cross-border trade. Also on Tuesday, e-commerce gateway BlueSnap Inc. said it is teaming up with Federal Express to streamline international sales for e-commerce merchants.
Working with FedEx Cross Border, BlueSnap says it will attack difficulties that often stymie retailers, including shipping logistics, taxes, local payment pages, and local payment processing. “FedEx Cross Border allows merchants to sell internationally like never before,” says Ralph Dangelmaier, chief executive at BlueSnap, in a statement. “Their advanced platform solves so many of the tough challenges of global e-commerce.”
The opportunity for Internet merchants is sizable. Nearly 100 million online consumers will spend almost $1 trillion on cross-border purchases by 2020, according to Waltham, Mass.-based BlueSnap.
