[tompazourek]

It's quite smart what Transferwise are doing.

When a transfer is made from country A to country B, the money gets first transferred from the sender in country A to local Transferwise account in country A (avoiding fees and conversions). Then they send the money from local Transferwise account in country B to the recipient in country B (again avoiding fees and conversions).

The magic is how they ensure that the local Transferwise accounts in each country have enough money to do the transfers. They own a bank account in every country they operate in, and the money flows between those bank accounts. They need to move money between their local accounts in each country while minimizing the amounts transferred, but also minimizing the fees and conversions. When they actually move the money is up to them, they just need to ensure they have enough on each account. I guess there's a lot of variables to optimize for, and it would be interesting to know more details of the process.

I've also seen a company called Azimo trying to do a similar thing, but I haven't tried them yet.