Taavet Hinrikus (TransferWise) “In the future we won’t use one bank but a multitude of services”


Taavet Hinrikus was first employed by Skype and is now at the head of Transferwise, an international money transfer service that is taking on the monopoly of banks.

Taavet Hinrikus is co-founder and executive chairman of Transferwise © S. de P. Transferwise

I and my co-founder Kristo Käärmann are originally from Estonia. We started the company out of personal frustration. I was working for Skype at the time (Taavet was the company’s first employee, ed.), and I moved to London. There a problem arose: my salary was still paid in Estonia, so I had to transfer the money every month. This was a long, expensive and frustrating process. At the same time, my co-founder Kristo was trying to send money to Estonia from London. We immediately decided that there was no need for an international money transfer: it was easiest to simply exchange the money. We soon realised that a peer to peer money transfer platform would be useful for many people around the world. The Transferwise concept was born! Based in the UK and Estonia, the company now employs around 250 people.

In a very simple way. Let’s say you want to send money from Paris to one of your friends in London: just go to our website and enter your credit card number and then specify your friend’s email or bank account number. Once this information is completed, we will then proceed with the transfer, whether we find a match with another user or not. Note that the recipient does not need to be registered with TransferWise to receive this money.

“FinTech startups offer better services than banks”

It is clear and transparent: we take a 0.5% commission on each transfer. Since our inception, we’ve transferred almost £3 billion, which means we’ve saved our customers over £150 million in bank fees! Transparency is one of our core brand values. In fact, it’s one of the reasons we decided to create this company. Unlike banks, we don’t apply any hidden fees.

We are talking about people who have friends or family abroad. But we are also noticing that more and more small and medium-sized companies are using our platform to pay their employees or suppliers.

How do you see the future of banks, increasingly competing with FinTech start-ups?

If you look at the world today, there are a lot of services that are proving to be better at what they do than banks, whether it’s in areas like payments, money transfers, person-to-person lending, etc. Banks are facing real competition from FinTech startups. That’s why I think the role of the bank is going to change in the world of tomorrow.

In the future, we will probably no longer use one bank for all our transactions but rather a range of services that will meet very specific needs. My feeling is that banks should work in the same way as Spotify or Skype, i.e. by offering a service that works online, is cheap and easy to use.

Do you think the Fintech stars of tomorrow could come from Europe?

Absolutely! There is currently a real concentration of start-ups operating in the finance sector in Europe, particularly in London. And that’s really good news both for the city and for Europe. Because it’s not New York or California, but London that is the capital of FinTech today!

You were the first employee to join Skype. At that time, what was the platform’s strategy to acquire its first users?

Skype’s early days were actually quite similar to Transferwise’s today. The success of both services is directly related to the fact that people find them useful and take the initiative themselves to tell people about them. In the early days of Skype, for example, we simply invited our friends to use the platform. Then word-of-mouth started to spread. The reason? We were offering something that didn’t exist at the time: the ability to talk to someone remotely without it costing anything. From that point of view, I think Skype changed the world and started a real revolution in the telecommunications sector.

Don’t wait and start as soon as possible! A lot of people talk about creating a start-up, but a lot of them also give up. The advice I can give them is above all to focus on very short term goals so that they can learn and improve quickly. In other words, instead of making a plan for a year, make it for a month! Create a prototype and go quickly to present it to potential users.

You raised $58 million last January from well-knowninvestors, including Peter Thiel and Richard Branson. How do you plan to spend this money?

Our goal is still the same: to get as many people as possible using Transferwise! So we plan to use the money to expand internationally. For example, we recently opened an office in New York to tackle the American market. We are also keeping a close eye on Asia. Transferwise is also due to launch in Australia very soon.

Taavet Hinrikus is the co-founder and CEO of TransferWise, an international money transfer platform, where he oversees marketing and product development. The start-up has raised a total of over $90 million from high profile investors such as Peter Thiel, Richard Branson, Max Levchin and Andreessen Horowitz. Prior to Transferwise, Taavet was the Chief Strategy Officer of Skype until 2008. He is known for being the first employee of the company. He is also a business angel and advisor in several start-ups including OMGPOP, Betaworks and Tweetdeck.


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