[TorKlingberg]

As a customer, I love TransferWise. The banks charge outrageous rates and fees. The competing money transfer/currency services promise the best rates, but make you sign up before telling you. Then you get constant calls from your "personal currency advisor". In the end you find out their rates are higher, and now you're on call with a sales person. This includes companies HN posters in a previous thread were recommending. TransferWise is upfront and self-service. The one time I had to email support they were great too.

On the business side, TransferWise tells an interesting story about peer-to-peer currency exchange, but I think that's a media play. In practice most transfers will not immediately match with reverse flow. TransferWise have to keep a buffer of each currency and trade on the open market, just like the banks do. That in turn exposes them to currency risks, and it wouldn't surprise me if they lost a lot of money on 24 June 2016. As a VC funded startup they could eat that as a learning cost.

[patio11]

I think you're entirely right on the media thing. I've used them on JP->US and US->JP over the years as my sources of income and expense destinations have shifted around. They're pretty brilliant, but it's clear that they're just buying dollars from UFJ (who has a lot of dollars to sell) at a rate better than the one UFJ would quote me.

Which is fine! It does exactly what it says on the tin.

[bboreham]

TransferWise reserve the right to cancel out transaction if the market moved too far.

I think you're right they would eat a fairly big loss to avoid the bad press this would generate, but there is ultimately a limit.

It bugs me this aspect of their business model is never cited, so most people assume they are selling the same product as the banks. They're not: banks take the risk; TransferWise leave it with the customer.