Mumbai: Kristo Käärmann, co-founder and CEO of Wise (formerly TransferWise) came up with the idea for a fast and cheap remittance service after being overcharged by UK banks for sending money back to him. Käärmann is from Estonia, a country that has seen success due to his decision to provide digital ID and access to government services since the late 1990s. His company has been offering remittances to India from the late 1990s. ‘The West for almost seven years now. In an interview with TOI, he explains how Wise’s decision to offer remittance services from India to international destinations through a partnership with RBL Bank will benefit senders.
Wise is now ten years old. How has it evolved?
In most western countries, remittances are made through banks. It doesn’t sound that expensive is that they take the real exchange rate and add 5% to it. For me, the solution back then was to find a friend who was transferring money the other way, and we transferred money without using the banks. By the time you want to transfer you have a friend doing the reverse transfer, so we built what was TransferWise then and is now Wise. We are now transferring money for 10 million people, and additionally transferring $ 6 billion per month, we help customers with a few other things the same way they can use Wise for personal use cases. . So we have expanded and are now operating in over 50 countries and are happy that India has joined our network.
What are the main corridors for your remittances?
Money is still flowing in the biggest countries – the eurozone, the United States, so you find India to be a big economy. For people who send money, India is a great destination. Then there are Singapore, Japan and Australia.
Since your transfers are enabled using owner accounts on both ends, how do you balance payments to and from a country?
This is one of the reasons we are opening transfers from India. We have been providing funds to India for seven years, but now we are providing services to individuals and businesses in India. On a larger scale, what needs to happen is that the inputs and outputs need to be in balance and they need to be in balance. Personal transfers may only go one way, but at the macro level they have to balance out or the currency will collapse. To be able to balance our network, we have liquidity partners who can provide funds.
What USP does Wise offer?
Wise’s USP is still the same. The three things our customers are looking for is that when transferring money it has to be cheap. When you transfer through Wise, you get the same rate you see when you google for exchange rates, we don’t change the exchange rate. But we do charge a fee, and the fees are transparent. The biggest change in the world is creating transparency where fees are not in the exchange rate. Our goal is to further reduce costs. Customers also care about speed, so our goal is to increase the percentage of customers who get their money in 20 seconds. Around the world, 38% of transfers made on Wise take less than 20 seconds to arrive. It’s not universal yet, but 60% of the time it happens in under an hour, we get a greater share of instant transfers. Finally, there is the convenience as customers don’t want to go to the bank branch. They want something that works out of the box, and it’s the experience that customers should be looking for.
What are the prerequisites for you to be able to activate a transfer in 20 seconds?
There are a lot of things that need to be done to make this work. We need to be able to deliver money instantly to India and it works because you have instant payment system. In many countries, we now connect directly to the central bank. The United Kingdom, the euro zone, Singapore have just launched a connection to the payment system directly. This helps us to cut out middlemen and access funds directly.
How do you manage to participate in payment systems?
We hold licenses which in Europe are called electronic money institutions. We can handle payments and withhold people’s money. Customers hold over $ 4 billion in their Wise accounts. I hope that one day we can publish them in India. They can hold multiple currencies and use them while traveling. For example when I use it in India it uses Indian rupee balance and in Australia it uses AUD balance. If I put euros in the account, there is no exchange. If I have to use rupees, do the conversion myself or it can be done automatically. In India, when making a payment in Rupees, the account verifies, then converts from Euro or another currency and converts using the actual exchange rate. Although we issue Visa and Mastercard, they process payments in local currencies and there is no markup on exchange rates.
Are you in partnership with local banks? Do you allow Wise to integrate with banking applications?
We partner with national banks and wherever we operate we partner with national banks for money flows if we are not connected to central bank payments. In many places, banks have chosen not to make international transfers themselves, but to use our services to deliver to their customers and that is what they can do with these APIs where they build the experience. judicious of their applications. We have 13 banks using this feature, we don’t have any in India, the closest is in Singapore and we will be looking at the possibility of partnering with Indian banks.
India has special remittance laws requiring that use cases be specified. In addition, there have been numerous online frauds.
Wherever we operate we have local specifics, Indian customers using Wise will have a slightly different experience. We wonder what the payment is for, because we have to do it by regulation. Yes, it is a little less practical, but these are your laws, and we have to follow them. The second point of bad people on the internet, since money has been around there have been scams and fraudsters all over the place. Our job is to eliminate them as we see them. Our strength is that we see so many international volumes going through our pipes, because of the visibility of transfers, we probably have more information than anyone to be able to catch these bad guys. The way to understand this is that some type of scam idea is tried out a few times locally and we’ve seen it happen elsewhere and can catch it. If we find something specific to India, we will approach it in a way specific to India.
Wise is now ten years old. How has it evolved?
In most western countries, remittances are made through banks. It doesn’t sound that expensive is that they take the real exchange rate and add 5% to it. For me, the solution back then was to find a friend who was transferring money the other way, and we transferred money without using the banks. By the time you want to transfer you have a friend doing the reverse transfer, so we built what was TransferWise then and is now Wise. We are now transferring money for 10 million people, and additionally transferring $ 6 billion per month, we help customers with a few other things the same way they can use Wise for personal use cases. . So we have expanded and are now operating in over 50 countries and are happy that India has joined our network.
What are the main corridors for your remittances?
Money is still flowing in the biggest countries – the eurozone, the United States, so you find India to be a big economy. For people who send money, India is a great destination. Then there are Singapore, Japan and Australia.
Since your transfers are enabled using owner accounts on both ends, how do you balance payments to and from a country?
This is one of the reasons we are opening transfers from India. We have been providing funds to India for seven years, but now we are providing services to individuals and businesses in India. On a larger scale, what needs to happen is that the inputs and outputs need to be in balance and they need to be in balance. Personal transfers may only go one way, but at the macro level they have to balance out or the currency will collapse. To be able to balance our network, we have liquidity partners who can provide funds.
What USP does Wise offer?
Wise’s USP is still the same. The three things our customers are looking for is that when transferring money it has to be cheap. When you transfer through Wise, you get the same rate you see when you google for exchange rates, we don’t change the exchange rate. But we do charge a fee, and the fees are transparent. The biggest change in the world is creating transparency where fees are not in the exchange rate. Our goal is to further reduce costs. Customers also care about speed, so our goal is to increase the percentage of customers who get their money in 20 seconds. Around the world, 38% of transfers made on Wise take less than 20 seconds to arrive. It’s not universal yet, but 60% of the time it happens in under an hour, we get a greater share of instant transfers. Finally, there is the convenience as customers don’t want to go to the bank branch. They want something that works out of the box, and it’s the experience that customers should be looking for.
What are the prerequisites for you to be able to activate a transfer in 20 seconds?
There are a lot of things that need to be done to make this work. We need to be able to deliver money instantly to India and it works because you have instant payment system. In many countries, we now connect directly to the central bank. The United Kingdom, the euro zone, Singapore have just launched a connection to the payment system directly. This helps us to cut out middlemen and access funds directly.
How do you manage to participate in payment systems?
We hold licenses which in Europe are called electronic money institutions. We can handle payments and withhold people’s money. Customers hold over $ 4 billion in their Wise accounts. I hope that one day we can publish them in India. They can hold multiple currencies and use them while traveling. For example when I use it in India it uses Indian rupee balance and in Australia it uses AUD balance. If I put euros in the account, there is no exchange. If I have to use rupees, do the conversion myself or it can be done automatically. In India, when making a payment in Rupees, the account verifies, then converts from Euro or another currency and converts using the actual exchange rate. Although we issue Visa and Mastercard, they process payments in local currencies and there is no markup on exchange rates.
Are you in partnership with local banks? Do you allow Wise to integrate with banking applications?
We partner with national banks and wherever we operate we partner with national banks for money flows if we are not connected to central bank payments. In many places, banks have chosen not to make international transfers themselves, but to use our services to deliver to their customers and that is what they can do with these APIs where they build the experience. judicious of their applications. We have 13 banks using this feature, we don’t have any in India, the closest is in Singapore and we will be looking at the possibility of partnering with Indian banks.
India has special remittance laws requiring that use cases be specified. In addition, there have been numerous online frauds.
Wherever we operate we have local specifics, Indian customers using Wise will have a slightly different experience. We wonder what the payment is for, because we have to do it by regulation. Yes, it is a little less practical, but these are your laws, and we have to follow them. The second point of bad people on the internet, since money has been around there have been scams and fraudsters all over the place. Our job is to eliminate them as we see them. Our strength is that we see so many international volumes going through our pipes, because of the visibility of transfers, we probably have more information than anyone to be able to catch these bad guys. The way to understand this is that some type of scam idea is tried out a few times locally and we’ve seen it happen elsewhere and can catch it. If we find something specific to India, we will approach it in a way specific to India.
