Company & Team

TransferWise was born out of frustration

Taavet Hinrikus and Kristo Käärmann are two friends who believe that money, like water, is meant to flow freely. But in the absence of a global currency, it doesn’t. Besides, water can toggle elegantly between its various guises: ice, liquid and steam. Money can’t. Transforming pounds into euros or dollars, and sending them across borders, is expensive. And frustrating.

After some cursing and head-scratching, Taavet and Kristo had an epiphany. A year later, they had saved each other thousands of pounds in bank fees. Here’s how.

The friends had been splitting their lives, income and spending between the UK and mainland Europe. Taavet worked for Skype at the time. He was paid in euros, but spent his earnings in London. Kristo was paid in pounds, but had a mortgage in euros and spent a lot of time in Belgium.

Whenever Taavet needed to get pounds for rent, Kristo had pounds to spare -- but lacked euros to pay his mortgage. The pair devised a simple scheme: Kristo put his pounds into Taavet’s UK bank account, and Taavet topped up his friend’s Belgian account with euros.

To find a suitable exchange rate, the friends picked that day’s mid-market rate on Reuters. At TransferWise, we simply call it the real rate. (By the way, banks and currency brokers never use this rate with you.)

“Hmm,” Taavet and Kristo wondered. “What if we add technology and turn this into a global platform?” So they did. The rest is TransferWise. A financial service built for people, not banks.