It's very simple. 50bps of every transaction that you make. They will need MANY transactions to justify a $1B valuation :)
They're investing heavily now (at a loss) in marketing and in international expansion (note the recent US launch). Have you seen their recent marketing campaign in the UK? If you refer 3 paying users, you get £100 ($155) cash. Their cost of acquisition is therefore £33/user if not more. Assuming a 0.5% margin, they are therefore implying that each paying user will make at least £7,000 ($10,000) in transfers with them. And that's just to break even...
They're investing heavily now (at a loss) in marketing and in international expansion (note the recent US launch). Have you seen their recent marketing campaign in the UK? If you refer 3 paying users, you get £100 ($155) cash. Their cost of acquisition is therefore £33/user if not more. Assuming a 0.5% margin, they are therefore implying that each paying user will make at least £7,000 ($10,000) in transfers with them. And that's just to break even...