This week, we put our spotlight on Daumantas Dvilinskas, CEO of TransferGo; an online money transfer service. The interview took place at the Innovate Finance Global Summit. Daumantas explains how to transfer money to other countries for a tenth of the cost that we would normally pay.
Please tell us who you are, what your business does, and what you aim to achieve with the service
My name is Daumantas and I’m the founder and CEO of TransferGo. We offer an online international money transfer service that is at least 90% cheaper than banks, and traditional cash bureaus. We are specifically targeting migrants who work in the UK, Germany and Scandinavia and send money back home to support their relatives.
How is TransferGo able to do things so differently?
In the case of banks, sending money across borders involves SWIFT payments which use an international payment network as a sort of middleman. This is both expensive and slow.
In the case of Western Union, and other cash bureaus, these companies use air mail. So while sending cash to another country is fast, the inherent risk management cost is quite high.
Banks are bound by system problems and Western Union deal in cash, yet we’ve found a sweet spot online. Because we send money across borders using the web, compliance is low cost.
We use a ‘local in/local out system’, which means that we don’t actually transfer money across any borders. So if you want to send money, you pay a local transfer fee. We then use pre-funded capitals pools across the world to send the money directly to the recipient.
As we don’t send money from country to country, this reduces costs. And because money doesn’t travel physically, payments are fundamentally quicker and cheaper to settle. In fact, we can usually send and deliver money within 30 minutes.
How are you reaching out to people who could benefit from your service?
That’s a good question, as many of our potential customers are still using cash. To start using a new service, they need to trust it. At the moment, most of this trust comes from word of mouth.
In addition, we understand our customers because we’re just like them. After all, this company was founded by economic migrants in the UK and US – it’s all in our DNA.
We know that our customers want the money the send to be safe. We also realise that they want the money to reach their families as quickly as possible. Because we know our customers so well, and as we give them exactly what they need, it’s easier for us to gain their trust.
There’s a lot of hype surrounding Fintech at the moment. How do you break through that to build trust?
We overcome any barrier to trust by constantly overdoing it. In other words, we always deliver more than we promise. That strategy is working very well. In fact, we’ve been growing at double digits for the last three years.
Since 2008, there’s been a gap in the market and people are looking for new brands they can trust – especially in finance. We and other Fintech companies are here to fill the gap; so far, we’re doing that quite well.
2015 was supposed to be the year of Fintech. What do you see happening in the industry in 2017?
A lot of these companies are at the very beginning of their product innovation curve. A lot of them just have a good idea. Just now, they’re focused on gaining trust. Once these companies achieve this aim, they will be able to branch out and do many more things.
So I think that 2017 will be the year of more value for the consumer – especially in the mobile space. Once you’re in people’s pockets, you can take a more proactive role in helping them to manage their finances better in many different ways.
Do think there’s a chance that more traditional companies, such as banks, can collaborate with TransferGo and others to improve the end-user experience?
Yes, our business could not exist without banks. Over the last three years, we’ve been building a large bank partner network.
Right now, we work with close to 40 major brand banks across the globe. The market is moving more towards online anyway, so we’re an increasingly good partner for banks to have.
We believe that niche products are the key of the future and banks are starting to understand that as well, thus they are more and more interested in partnering with us.
Three years ago, banks were shying away. But now, they’re not only working with us; they’re also changing their policies in order to do so. This is because they know that our methods are very much part of the future of finance.