The Exchanges

Q there, even though the banks are making way more, they're not passing all of their, you know, upside back onto consumers like a Bezos would do who constantly manages Amazon at a -14% margin. Um, why aren't you passing more of those costs off to your consumers and continue to operate in the black? It sounds like you guys can do this. This is why you've raised so much money.

A I mean, I would, uh, you know, maybe you should update your knowledge on Amazon. I think they've been profitable for the past quite a number of quarters. Uh, you know, it's, it's a good point to raising, but I actually think that it's to the benefit of our consumers that we are a profitable company, because that means they can feel sure that we will be around for a long time to come. If you look around today, there are many, you know, I would say way too many companies outside Sort of being funded by venture dollars that will never break even. You know, it's kind of ridiculous that you can order an ice cream, pay one dollar for it. It'll get delivered to you in 15 minutes. You know, that's only because some venture capitalist is paying for ice cream, which, you know, you should enjoy it while it lasts, but don't, don't bet on it lasting forever. So I think it's important for our consumers to see that we're profitable. It's important that we don't become too greedy. And I think we're, we're pretty good at it, you know. And in terms of prices, you know, we have done a large number of price cuts this year because we've seen we can do things better than we thought. So obviously we're going to lower the price and make sure we're passing on these savings to our consumers.

AI assessment note: “it's to the benefit of our consumers that we are a profitable company”

Q basically negotiate almost a 30, you know, X cheaper rate versus how you were having to do it in the old way, which is go through a bunch of middleman. And then it sounds like you maybe pass that through to consumers by decreasing kind of the rates that you're charging to consumers. Uh, is that accurate? And how did you get access to the Bank of England's payment system?

A Yeah, absolutely. So I mean, and that's, that's really a, it's a really important milestone we reached a couple months ago. So now in, in, in UK maybe taking a step back in UK, we've had a faster payment system for about 10 years, which means that money moves between UK banks in real time. UK was one of the first countries to have it. I mean, now many countries have it. US still doesn't have it, which is, you know, a big, big mistake, I think. And when the FAFSA payment system was launched in the UK about 10 years ago, there was a number of about 10 banks that were kind of founding members. And no one else has been added to Fast for Payments since then until we became the first new member and first non-bank to be added. What that means is that we get to play in the same terms as the banks. We can move money inside UK in real time and the cost of that is really low. And obviously, you know, what this means is that our customers get even faster speed and we can pass on the savings to our customers. So we're pretty happy about that.

AI assessment note: “Yeah, absolutely... until we became the first new member and first non-bank to be added.”

Q And so walk me through why this hasn't, you know, the US kind of is trying to do real time things, you know, obviously Canada is trying to do things as well. I mean, how long until you get this kind of direct access in Canada, US and other big markets?

A Well, I think in U.S. the question is, when will U.S. have a real-time payment system? You know, people are working on it, but it's still a good few years away, and, but what this does highlight, highlight is, it's a question about regulation, and U.K. has a financial regulator that is really driven by bringing innovative solutions to the U.K. consumers. It's one of the few regulators that has innovation as part of its mission statement, and I think it's really important because it means they're actively working on making sure there's more competition and people have more choice. You know, the example of getting access to the payment system is one of them. You know, it's really, it hasn't happened in many other countries yet. It didn't need a regulatory change, And we spent a long time with the Bank of England and, say, FCA to make sure we can do it. You know, it's, obviously, given that it's a critical piece of, kind of, national infrastructure, it has to be controlled somehow. So, you know, it shouldn't be that every startup that gets started yesterday gets access. But, you know, at a certain point, you should, you should be eligible to get access. And I think that's what regulation can play a big role. You know, US, I think there's a long way to go. To make regulation simpler. You know, we are subject to state by state regulation in the US, which is a big pain in the backsid…

AI assessment note: “people are working on it, but it's still a good few years away”

Q Walk me through, uh, the, let's start first off with your borderless account. So, and we'll touch a bit on blockchain here. So your borderless account, is that kind of your version of blockchain or is it more of a multi kind of currency brokerage account where you can hold multiple currencies kind of at once and then exchange when you see fit based off when you see favorable rates?

A So, uh, I think, you know, really we, we need to take a step back and, you know, we started out with Consumer mind transfer, you know, helping, helping consumers and later on businesses move money from one country to another. So now as we were kind of learning the behaviors of our customers, we realized that they still have to work with two, three, four banks in different countries. So we're going to, and you know, and nobody was particularly happy about the experience or getting it. So we thought, wait a moment, you know, why, why don't we offer them a way to keep a balance at TransferWise in multiple currencies? You know, today you can get the multi-currency bank account, but typically that means you either have to pay your bank a lot, you know, it could be a hundred bucks a month, or you have to be like a top one percent customer, in which case you pay your bank a lot anyways, whether you know it or not. So it's really about giving our customers kind of more convenience and kind of taking a little bit of a bigger, bigger, like being able to help them more in their banking journey. So as a portalize account allows you to keep a balance in a number of currencies, you can exchange them in one click. You also have a debit card which you can use, which has launched in Europe already. It's coming to US early next year. You get a debit card which you can use to access the balance. …

AI assessment note: “allows you to keep a balance in a number of currencies, you can exchange them”

Q kind of the start story. For the listeners, I want to give a kind of a flashpoint in time where you're at today so that people can understand growth, and we'll go back and capture more of the story. Last public update you gave, I believe, four million users, Four billion processed kind of every single month through the platform. Where are you at today in terms of those numbers?

A That's where we are. I mean, literally when we, you know, when the story I spoke about was in like 2007, eight, we actually, uh, you know, suddenly we were using this method between us and a few friends. And a couple of years later, we were like, Hey, wait a minute. There are many other people around the world who are in need of a service like this. And we think we can do something. It helps them. So we built what I would call a prototype, a medium viable product, and we launched it in January of 2011. And when we launched, it was me and Christophe, that's the two of us. 15 minutes after launching, the first guy sent us 2000 pounds.

AI assessment note: “That's where we are.”

Q know, and onwards, you start obviously getting secondaries where early folks want to get out. You know, uh, what I'm curious about, I know you guys haven't released an exact split, but would you, is it fair to say more than 90% of that turn, eighty million actually went into operating and growing your Asia footprint or was more than that going to second, you know, paying off early folks?

A Um, it was a split, you know, we, we, we frankly raised money, uh, not because we needed it, but because, uh, we were already profitable. You know, we saw it would be a good thing to have a slightly stronger balance sheet for the business. You know, as we continue expanding around the world, it's good to have more money in the bank. And just make sure that to our partners, to our customers, we are a much more trustworthy partner where you have certainty is going to be around for a long time. At the same time, you know, I remember hiring some first people in 2011, you know, telling them, Hey guys, you know, you know, we have this crazy idea. We're building this kind of alternative way to move money. It may work. It may not work. You know, I'd love you to join the journey. We can pay you a high salary.

AI assessment note: “Um, it was a split, you know, we, we, we frankly raised money”