A new money-transfer service that helps users sidestep banking fees has opened for business in Ukraine.
TransferWise, an Estonian startup, is a Web-based solution that allows users to connect their bank card to an online profile and transfer any amount straight to a recipient’s own card account. Recipients in Ukraine can get their hands on the money in just one working day either at their bank branch or in cash from an ATM in hryvnias.
To make a transfer, the sender should know the recipient’s first and last names, their phone number, and the last four digits of their card number. TransferWise charges a three percent fee on transactions.
Compared to other money transfer services, TransferWise offers considerable savings. For instance, to transfer 300 pounds from a U.K. bank account to a Ukrainian bank account, the sender pays just nine pounds to TransferWise, compared to 29 pounds through popular money transfer service MoneyGram and 39.50 pounds through Western Union, according to rates set as of May 30, says Roman Rossov, product manager at TransferWise.
There is, of course, a catch – at the moment only clients of Privat Bank, Ukraine’s biggest privately-owned bank, can receive transfers to their cards, since it’s the only bank that has signed up to work with TransferWise so far, Rossov says.
“They (Privat Bank) offered the most convenient legal solutions, and technically it was easy to (set it up) through Privat Bank,” says Rossov.
Clients will have to wait to transfer money out of Ukraine using TransferWise, however.
“It all depends on legislative changes,” says Rossov.
TransferWise needs to get a license from the central bank – National Bank of Ukraine – to offer services in transferring money out of Ukraine, and it will take the company time to obtain one.
In the meantime, the company decided to launch its incoming money-transfer serviceto Ukraine given that the volume of money being sent is growing: The country was the 10th biggest recipient of money transfers in the world in 2014, with $7.5 billion being sent, according to Rossov.
Three global payment systems, MasterCard, Visa and American Express, and six global money transfer systems, MoneyGram, Western Union, MEEST, RIA, Caspian Money Transfer and Khazri, are registered in the NBU’s money transfer registrar and have permission to make both inbound and outbound transfers.
TransferWise was launched in 2011,and now transfers over 26 currencies in 48 countries to 360 destinations. The very first developer that the company employed was from Cherkasy in central Ukraine, and its first research and development center ended up being opened there as well. It now employs 12 people.
“All the guys have senior level qualifications in development. Basically, we have some of the best developers from Cherkasy,” says Rossov.
The Cherkasy office is the company’s core R&D center, although it also has offices in Tallinn and London. The option of receiving money transfers became available to Ukrainians in early July.
Since its foundation, the startup has attracted $91 million in mutual investment, including money from Sir Richard Branson, several other venture funds, and independent investors.
Kyiv Post staff writer BozhenaSheremeta can be reached at [email protected]. The Kyiv Post’s IT coverage is sponsored by AVentures Capital, Ciklum, FISON and SoftServe.
