If you travel frequently, you know there are always exchange rates and transaction fees to deal with on your credit card.
But starting next year, European fintech TransferWise says it plans to launch a borderless debit card in Canada, to let Canadians spend money both locally and abroad, with foreign exchange fees lower than incumbent banks.
According to the Financial Post, TransferWise CEO and co-founder Kristo Kaarmann says the card will be convenient for business travellers, snowbirds and expats who spend time in Canada and abroad. The company launched their debit card two weeks ago in the U.K and Eurozone, but Canada’s rollout is slated for 2019.
“When people go out of the country, they are inevitably spending money,” Kaarmann told the Canadian Press. “They’re booking hotels, they’re booking flights, often in other currencies, and that’s where banks scoop the hidden fees.”
Purchases will not have any transaction fees in the currency balances are held in, but if money needs to be converted in the account before using the card, a fee of 0.6 per cent to 1 per cent will be charged—which TransferWise says is still cheaper than traditional banks.
The company launched their borderless account in Canada back in August 2017, which supports 28 currencies. Currently, users can manage their balances and send money using the company’s iOS and Android app.
TransferWise says it holds customer money in segregated accounts at financial institutions insured by the Canada Deposit Insurance Corp., with no limit on balances in the borderless account. CDIC insures Canadian deposits up to $100,000 in the case of a bank failure.
The UK-based company also recently launched its batch payments service in Canada, which lets businesses make up to 1,000 global payments simultaneously in multiple currencies, with what comes at a lower foreign currency conversion charge than regular banks.
Since launching in Canada two years ago, TransferWise says nearly $2.2 billion has been moved in and out of the country via their platform here, with our market among its top 10 largest and also now the sixth-fastest growing, when it comes to transfers.
Canadians are still waiting for Apple Pay Cash to land in Canada, as an easy way to send money to each other. But for those who need to deal with multiple currencies, companies like TransferWise look to take away business from big banks with their lower foreign currency conversion fees.
Update: the article has been updated to reflect this has nothing to do with MasterCard, as per TransferWise PR via email:
In a May 8 story, The Canadian Press erroneously reported that Transferwise was planning a Canadian launch next year for its borderless debit MasterCard. In fact, the borderless debit card to launch in Canada is not related to MasterCard.