- TransferWise’s priority is to offer international transfers between corporate accounts, focusing mainly on small and medium-sized companies, including those that carry out import and export operations;
- The company estimates that this should happen by the end of this year.
TransferWise, a financial technology company specializing in cross-border money transfer, has just announced that it has received approval from Brazil’s Central Bank to function as a foreign exchange broker in the country. The license will allow the startup to report its foreign exchange transactions directly to the country’s Central Bank. With this, the company intends not only to reduce costs but also to expand its service portfolio in the country.
With the pandemic, part of this integration, which requires a face-to-face visit from the Central Bank to the company’s headquarters, should take a while. But once this integration is completed and in accordance with the Brazilian rules, TransferWise’s priority is to offer international transfers between corporate accounts, focusing mainly on small and medium-sized companies, including those that carry out import and export operations. The company estimates that this should occur by the end of this year.
Today, the average remittance cost by TransferWise is 1.5% per transfer. With the new license, the company wants to bring this cost closer to its global average of 0,74%. “Currently, sending money with TransferWise in Brazil is already 3 times cheaper than with traditional financial institutions. With the exchange broker’s license, we hope to further reduce our rates, optimizing costs and offering an even better experience for our clients”, said Diana Ávila, leader of TransferWise in Latin America, in a press release distributed to the press.
In an interview with LABS in March, the general manager at TransferWise in Brazil, Heloísa Sirotá, said that the Real is always among the top 5 most traded currencies by the fintech worldwide–which also means that the country is one of the company’s main markets.
In the near future, the company also wants to bring a service to Brazil that it has already offered in the UK since 2018: global accounts, with a balance in dollars, euros and other foreign currencies.
TransferWise’s multi-currency account allows the customer to send money to himself in an even cheaper way (as if it were a remittance, in which the tax on financial transactions existing in Brazil, for example, is 1.1% against the 6.38% of an operation credit card) and receive money, even in other currencies, without spending anything.
This is possible through a debit card linked to this account and which, at each transaction, takes into account the commercial dollar rate.
Unlike the credit card operation, in which the amounts spent in other currencies are converted on the date of purchase or the date of payment of the invoice and are added with all conversion fees, there is no fee on the TransferWise debit card currency conversion.
*This story was changed on June 9 to clarify that the process of integrating the startup’s systems with Brazil’s Central Bank is still underway and that, therefore, the company will still go through some bureaucratic steps in order to effectively offer the new services in the country.