Premier money transfer startup TransferWise is set to begin operations in 2020 after obtaining a an operating license in the United Arab Emirates. Local sources in the Emirates report that the fintech startup announced this a few hours ago and that the company intends to start business in the middle east starting from the UAE in 2020.
In what comes as a series of successes for the company, TransferWise has been competing in the marketplaces that belong to global money transfer giants such as Moneygram and Western Union which have been losing their market share in the global remittance market to startups and upstarts recently.
The new branch of the company is regulated by the Abu Dhabi Global Market Financial Services Regulatory Authority and will operate from there to provide the low-cost remittance services for which it is known for. This is a great entrée into the Middle East because the United Arab Emirates is an expatriate haven of which remittance services are a large part of the burgeoning financial services market due to the large expatriate community there.
This will allow for greater inclusion. Especially for those expats who can’t afford the higher transfer fees offered by other remittance services. It also indicates that fintech companies can hold their own and even compete in conservative markets such as the UAE.
Kristo Käärmann, CEO and co-founder of TransferWise indicated:
“Money transfers from AED have long been one of our most wished for currencies, so we always knew we’d begin our expansion into the Middle East in the Emirates. The latest World Bank data shows an uptick in the cost of sending money from the Middle East, and there’s such a strong expat community locally who desperately need a better way to manage their money across borders.
TransferWise will soon be able to help those living and working in the Emirates by bringing innovation and competition to the market, resulting in lower prices and a better experience for customers.”
TransfwerWise started business in 2011 and is backed by venture capital heavyweights including Peter Thiel, Billionaire Richard Branson and, Andreessen Horowitz. Its profits grew over 65% in the fiscal year ending March 2019 to about $12.8 Million indicating that the organization is getting it right in terms of its operating and corporate strategy. The startup was able to attract about $689 Million in investments from the investors.
This indicates that cross-border payments are the next playing field for any fintech company wishing to get it right in the next year and beyond. The only issue left to be tackled in this regard is if the marketplace will recognize this and move in the same direction.