Fintech start-up TransferWise is set to launch an investments feature
TransferWise says it has received permission from the U.K.'s Financial Conduct Authority to deal in investments.
It now has 8 million users globally and processes £4 billion worth of transactions each month.TransferWise co-founders Kristo Käärmann and Taavet Hinrikus.TransferWiseFinancial technology firm TransferWise has obtained a license from the U.K. markets watchdog to offer retail investment services to clients.
The London-based firm started life as a means of sending money internationally online. In 2018, it made a deeper push into banking by offering a "borderless" multi-currency account tied to a debit card.Now, TransferWise plans to launch a service that lets users of the account invest passively in investment funds from third-party providers. The company said Wednesday that it had received permission from the U.K.'s Financial Conduct Authority to deal in investments.
"About three or four years ago we saw that people — and more so businesses — are not only sending money, they're also receiving money internationally," TransferWise CEO and co-founder Kristo Käärmann told CNBC in a video call.Käärmann said the problem the platform's users have had lately is finding a way to make a return on their cash. He added that TransferWise wanted to take a different approach to traditional banks, which lend out customer deposits and charge interest.
"It's not like if you put money into a savings account in a bank, money magically grows there," said Käärmann. "It's still going to be invested in something."TransferWise isn't the only fintech start-up looking to take on the investment industry. Plenty of other companies, such as Robinhood, Revolut and eToro, have gained popularity thanks to their zero-fee stock and cryptocurrency-trading features. However, Käärmann says his firm isn't looking to act as a stockbroker.
TransferWise said it expects to launch its first investing feature in the next 12 months. Though the firm is starting with the U.K., it hopes to also roll the product out internationally later down the line. Read more: CNBC »
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