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Business Operations Business Models

How Does TransferWise Make Money (Business and Revenue Model)

The TransferWise (Wise) business model

TransferWise logo
Here’s what you should know:
  • What is TransferWise, and how does TransferWise work?
  • How does TransferWise make money?
  • Transfer fees (Wise Transfer)
  • Account Fees (Wise Account)
  • Currency Conversion and ATM Fees (Wise Card)
  • TransferWise subsidiaries, acquisitions, and exits
  • TransferWise profit and revenue
  • What is the TransferWise business and revenue model?
  • TransferWise funding, net worth, and market cap

How does TransferWise make money? Well, here is a full, in depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the TransferWise business and revenue model, how much TransferWise makes per year, and how TransferWise works.

What is TransferWise, and how does TransferWise work?

Wise, formally TransferWise, is a money transfer and currency exchange service that allows users to send and receive money internationally.

Founded in 2011 by Taavet Hinrikus and Kristo Käärmann, TransferWise began trading on the London Stock Exchange on July 7, 2021, under the ticker symbol “WISE”.

Since that time, Wise now has more than 10 million customers using Wise to send, spend, receive, and store their money.

So, how does TransferWise work? To use Wise to send or receive money, users must first create an account by either heading over to their website or downloading their mobile app in the Apple App Store or Google Play store.

Once signed up, users can send or receive money from anywhere in more than 50+ currencies.

Some of TransferWise’s competitors include PayPal, Cash App, Venmo, Western Union, and other money transfer / currency exchange services.

TransferWise App in Apple App Store | TransferWise Business Model | How Does TransferWise Make Money? | How Does TransferWise Work?
Source: Apple App Store | TransferWise

How does TransferWise make money?

According to TransferWise, Wise has more than 10 million customers and has processed over $65.70 billion USD in payment volume in 2021.

So how does TransferWise make money off of all those users and payment volume?

Below is a breakdown of how much money TransferWise makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 3 ways of how TransferWise makes money in 2022

TransferWise has a revenue model that makes money in three (3) ways; from transfer fees, account fees, and TransferWise Card fees.

#1. Transfer fees (Wise Transfer)

TransferWise (Wise) makes most of its money from the fees it collects on the money transfers between users.

As noted above, TransferWise processed more than $65.70 billion USD in payment volume in 2021. Of which, they received a transfer fee on all of it. How much they take varies by currency. Though you can see the average TransferWise fees below.

How much are TransferWise fees?

  • starting at 0.41% ~ the average is 0.77%
How much are TransferWise fees? | TransferWise Business Model | How Does TransferWise Make Money? | How Does TransferWise Work?
Source: TransferWise

#2. Account Fees (Wise Account)

Another fee TransferWise (Wise) makes its money on is from the account fees that accrue from the money held in an individual’s Wise account.

Wise accounts are multi-currency accounts that allow users to send, spend, receive, and hold more than 50+ currencies at a time in their accounts.

According to TransferWise, Wise hold more than $4.5 billion USD of funds in Wise accounts. And of that $4.5 billion, Wise takes a 0.07% monthly account fee of that. Which you can see below.

TransferWise Pricing:

  • 0.07% of the total account balance (charged monthly, accrues daily)
TransferWise Pricing | TransferWise Business Model | How Does TransferWise Make Money? | How Does TransferWise Work?
Source: TransferWise

#3. Currency Conversion and ATM Fees (Wise Card)

When customers create a Wise account, they can order a Wise card if they choose to do so. Which, currently, more than 1.6 million customers have Wise debit cards.

There are three (3) different fees attached to this card from which TransferWise makes money from. First, there is a $9 one-time fee to get the card. Then once customers have the card, they pay for currency conversion and ATM fees.

TransferWise Card Fees:

  • Getting the Wise debit card: $9 USD (one-time fee)
  • Currency conversion fee: starting at 0.41% (fees vary by currency)
  • ATM fee: 2% of withdrawal amount + 1.50 USD per withdrawal
TransferWise Card Fees | TransferWise Business Model | How Does TransferWise Make Money? | How Does TransferWise Work?
Source: TransferWise

Note: TransferWise has more than 1.6 million customers have Wise debit cards

TransferWise subsidiaries, acquisitions, and exits

To date, TransferWise Ltd has made a total of 2 investments.

TransferWise profit and revenue

In 2021, TransferWise reported $512.25 million USD in revenue.

Note: Because TransferWise Ltd is a publicly traded company on the London Stock Exchange. You can find all of TransferWise’s publicly released financial reports, including annual reports, through TransferWise’s investor section on their website.

What is the TransferWise business and revenue model?

TransferWise (Wise) makes money through a few revenue models that they combine within their company, they are:

  • Fee for service (FFS) business model

TransferWise funding, net worth, and market cap

According to TransferWise’s Crunchbase profile, TransferWise has raised $1.3 billion over 12 rounds and has a market cap of $4.6 billion as of June 2022.