Banks Losing, Fintechs Winning

Note from the Publisher:  It’s a racy headline, that’s all.  Not our opinion, but it is that of the co-founder of TransferWise, which we recently featured in a story on FintekNews on August 4th, after they raised a $24M VC round.  Also interestingly, he specifically cited the recent Wells Fargo debacle, which we wrote about on October 14th, as symptomatic of the post-2008 banking crisis, and said that banks charge up to 8x more than their firm does for money transfers.  While they are not yet profitable on their $6M/month net income, they claim they have plenty of money (as evidenced by that nice, juicy recent VC round) to get through their initial stages of growth and scale up to profitability over time. 

“The CEO made a stateside visit last week to announce that TransferWise, which opened its consumer-oriented business in the U.S. a year ago, would begin offering a new business-payments service. Hinrikus estimates that roughly a million businesses here routinely send money overseas to full-time and contract employees.

During an interview with USA TODAY, Hinrikus confirmed that while the company generates roughly $6 million a month in revenue thanks to nearly $1 billion in monthly transfers, the company is not yet profitable. And he’s not concerned.

‘We have plenty of money,’ he says, noting that while TransferWise isn’t on the hunt for more funding, he is glad that the connection to plugged-in Valley players like Marc Andreessen means ‘we know what’s going on with the funding ecosystem even if we aren’t looking.’

Read Full Article at USA Today