WISE

Kristo Käärmann was an Estonian working at Deloitte in London, getting paid in British pounds but needing to send money home to Estonia in euros. Every time he made a transfer, his bank skimmed 3-5% through hidden markups on the exchange rate.

Taavet Hinrikus had the opposite problem — he was Skype's first employee, getting paid in euros but living in London and needing pounds.

They came up with an elegantly simple hack. Käärmann would put pounds into Hinrikus's UK bank account.

Hinrikus would put the equivalent in euros into Käärmann's Estonian account. Both used the real mid-market exchange rate — the one you see on Google — with zero markup.

They were essentially matching currency needs without ever sending money across borders.

In 2011, they turned this hack into a company called TransferWise (rebranded to Wise in 2021). The product automated what they'd been doing manually — matching people who needed to send money in opposite directions and settling the transfers locally in each country.

When perfect matches weren't available, Wise used its own float to bridge the gap.

Wise charges a small, transparent fee on every transfer — typically 0.3-0.7% depending on the currency pair. That's it.

No hidden exchange rate markup, no receiving fees, no minimum amounts. The fee is shown upfront before you confirm the transfer, and Wise always uses the real mid-market exchange rate.

Banks typically charge 3-5% through hidden rate markups, making Wise roughly 8x cheaper. Wise also earns interest on customer balances held in the Wise account and on the float between receiving and settling transfers.

Wise International Transfers is the core — send money to 160+ countries in 40+ currencies at the real exchange rate. The Wise Account is a multi-currency account that holds 40+ currencies with local bank details in major markets (USD, GBP, EUR, AUD).

The Wise Business Account serves companies with international payroll, batch payments, and multi-currency management. The Wise Card is a debit card that automatically converts at the mid-market rate when you spend abroad.

Wise Platform is a B2B API that lets banks and businesses embed Wise transfers into their own products — major banks like Monzo and N26 use it.

Wise grew through a combination of radical price transparency and media-savvy campaigning. Käärmann was unapologetically loud about how much banks were ripping people off.

Wise ran campaigns showing the exact markup banks charged versus Wise's fee. They published a "hidden fees calculator" that let people see how much their bank was stealing on international transfers.

Banks hated it. Customers loved it.

Word of mouth was enormous. Expats, immigrants, freelancers, and remote workers — anyone who sent money across borders regularly — told everyone they knew once they discovered Wise.

The savings were so dramatic (sometimes hundreds of dollars per transfer) that people couldn't help sharing.

The Wise Platform created a new growth vector. By licensing its infrastructure to banks and financial institutions, Wise got embedded into products used by millions of customers who had never heard of Wise.

When your bank offers "powered by Wise" international transfers, Wise grows without acquiring the customer directly.

Regulatory complexity across 60+ countries. Wise holds licenses in dozens of jurisdictions, each with different compliance requirements.

In 2023, Wise received a record £7.8 million fine from the UK's FCA for anti-money laundering control failures between 2020-2022. Käärmann himself was fined by the FCA for personal tax compliance issues.

For a company built on trust and transparency, regulatory problems hit the brand harder than they would for a traditional bank.

Growth is slowing as the easy gains are captured. Wise grew rapidly by converting customers away from overpriced bank transfers.

But as the most price-sensitive customers have already switched, finding new growth requires either expanding into new products (which dilutes focus) or new geographies (which adds regulatory complexity). Revenue growth has decelerated from 50%+ to the 20-30% range.

Competition from Revolut, PayPal, and traditional banks. Revolut now offers competitive exchange rates.

PayPal has improved its international pricing. Some banks have started matching Wise's rates for premium customers.

The "banks are ripping you off" message becomes less powerful when banks start charging less.

Andreessen Horowitz, Peter Thiel's Valar Ventures, IVP, Lead Edge Capital, Baillie Gifford, Richard Branson