TransferWise to launch borderless debit card
TORONTO — European financial technology company TransferWise is planning a Canadian launch next year for its borderless debit MasterCard, which allows users to hold balances in multiple currencies and spend it at home and abroad with lower foreign exchange fees than traditional banks.
TransferWise CEO and cofounder Kristo Kaarmann says the card, which was launched in the U.K. and the Eurozone two weeks ago, is useful for frequent business travellers, snowbirds and expats who spend lots of time outside of Canada, but domestically as well.
“When people go out of the country, they are inevitably spending money,” Kaarmann said in an interview. “They’re booking hotels, they’re booking flights, often in other currencies, and that’s where banks scoop the hidden fees.”
Kaarmann said there would be no transaction fees for people making purchases on the borderless debit card in the currency a balance is held in. If money held in the borderless account must be converted into another currency before using the card, a conversion fee of between 0.6 per cent and one per cent applies, which Kaarmann notes is less than the banks charge.
The U.K.-based fintech launched its borderless account in Canada in August last year, and Kaarmann said it is working to offer the accompanying debit MasterCard here in 2019.
There is no limit on the balance that can be held in the borderless account, he says. Customers’ money is held in segregated accounts at banks insured by the Canada Deposit Insurance Corp., according to a TransferWise spokesperson.
Kaarmann spoke about its borderless card as it launches its batch payments function in Canada, which allows businesses to make up to 1,000 global payments at once in various currencies with a lower foreign-currency conversion charge of between 0.6 per cent and 1 per cent.
TransferWise has been beefing up the functionality offered to Canadians since its launch in April 2016. Since then, roughly $2.2 billion has been moved in and out of the country via TransferWise’s platform.
Canada is among its top 10 largest markets.
Canada’s big banks are investing heavily in technology as customers increasingly do their banking in the digital realm.