Peer-to-peer money transfer platform TransferWise has opened up what has been one of the world’s most difficult and expensive currency corridors.
TransferWise customers can now make transfers to China from 14 different currencies, including the U.S. dollar, British pound, and the Euro.
According to the World Bank, the average cost to send $200 U.S. to China is $17, or 8.5 percent. With hidden charges the rate grows to 11.4 percent. Given that 50 million native-born Chinese live overseas (including 2.5 million in the United States), the global tab grows quickly.
In 2014 that tab exceeded $4.5 billion as people sent more than $65 billion to China. U.S. customers paid close to $1.4 billion in $16.3 billion in transfers.
TransferWise said it will charge 1.5 percent on transfers with maximum three-day delivery. Any Chinese citizen using UnionPay, China’s most popular account, can receive transfers.
Customers can make and receive transfers through an integration with WeChat, which is one of the world’s most popular messengers. More than 400 million Chinese citizens and 150 million people outside the country use WeChat. WeChat users access TransferWise from inside their WeChat account.
“It’s shocking to see just how badly the incumbents such as the banks and Western Union are treating their customers transferring money to China,” Nilan Peiris, TransferWise’s VP of Growth said. “For customers to be paying almost 10 percent to transfer money between the two of the world’s largest economies is simply unjustifiable.”
“It’s incredibly exciting for us to be able to offer an alternative that is exponentially better in terms of both cost and convenience to such a large group of customers who have been so terribly served.”