| Hey - great questions So the reality is that - "moving money" costs - almost nothing. Think about it. The process of doing a bank to bank transfer (what transferwise does) - involves one bank in one country, crediting another banks account in the originating country, and then the money turns up in a "correspondent"or "nostro" account in another country. The matching bit helps - but the real magic - is that monopolisitic incumbents have been charging spreads for years - TransferWise is different as they aren't greedy. You are right - that fraud and KYC checks - are significant in the industry - but lets step through what these are. I can share that we actually have pretty sizeable complaince and fraud teams - larger than many established financial services companies - but unlike them Fraud and KYC is part of the product - not a sign off team. The team understand our global regulatory responsibilities, and try to understand how tomeet them; whilst trying to figure out how to reduce customer and friction andcostin the process. There's been a complete lack of innovation in this domain for decades due to the dynamics you've outlined. Forexample with KYC: From KYC perspective - you have to verify that a customer is who they say they are - and check they aren't on any AML blacklists etc. Different jurisidictions - have different thresholds (limits) at which they ask for KYC checks in place. With Western Union Digital (and with transferwise) - someone may take apicture of their passport, driving licence, scan and upload. This then needs to be verified. For its first few years - like other players in the industry - validated every single one of these documents individually - but over time got to a point where they had built up enough data to be able to validate these documents in an automated fashion. Inevtiably given how strict regulation is in this industry - the onus is still not on letting the bad guys through I can't comment in public on transferwise's profitability - but can say the business has been operating sustainably for over a year - i.e. not losing money on a transaction - and investing sensibly on marketing. Marketing is relatively small spend for Unicorn B2c startup - with over 80%+ of new customers coming in through WoM |