History of Wise: The Fintech That Made Cross-Border Money Cheap

When in 2011 two Estonians living in London realised how much banks were charging them just to move their own money between pounds and euros, they didn't say "that's just how it is." They said "this can be done better." That's how Wise was born - today a publicly listed fintech with 16 million customers that treats the mid-market exchange rate as gospel.

And that's exactly why the story is worth knowing. Not for nostalgia, but because the same principle that brought Wise into existence is still the reason it's worth using.

How it all started: two friends and 90 pounds in fees

Kristo Käärmann and Taavet Hinrikus knew each other from Estonia. Both worked in London - Kristo as a Deloitte consultant, Taavet as Skype's first employee. Kristo earned in pounds but had a mortgage in euros. Taavet got paid in euros by Skype (headquartered in Estonia) but lived in London and needed pounds.

Each month they both wired money cross-border through the bank. And each month it cost them tens of pounds in a "hidden" fee buried inside an unfavourable exchange rate. So one day they thought: why not just do it directly? Kristo took Taavet's euros, Taavet took Kristo's pounds. They used the real rate they saw on Reuters. No banks, no fees.

Within a few months they wondered how many other people had the same problem. The answer: millions. In January 2011, they launched TransferWise.

From TransferWise to Wise: rebrand and IPO

The idea was simple, but the mechanism turned out to be robust enough to scale into something much bigger:

2011 - TransferWise launches in London, first investment from the PayPal mafia (Peter Thiel).
2016 - launch of the multi-currency account and own debit card.
2018 - "Borderless account" with 40+ currencies and local bank details (EUR IBAN, GBP sort code, USD routing number…).
2021 - rebrand to Wise (you can move stocks, invoices, salaries - not just "transfers") and direct listing on the London Stock Exchange at an 8-billion-pound valuation.
2024 - over 16 million customers and 13 global offices.

In that time, what started as a local P2P startup became proper infrastructure that banks (Monzo, N26, GMO Aozora) and companies like Google Pay and Stripe plug into.

How Wise works (and why it's cheap)

A traditional bank moving EUR → USD actually shuffles money through SWIFT and several intermediaries, each taking a cut. Wise flipped that on its head: the money physically doesn't cross borders.

When you send 1000 EUR from Europe to a friend in the US:

You send 1000 EUR to Wise's European account.
Wise pays your friend the USD equivalent from its US account - using someone else's money going the other way.
The mid-market rate is applied (the one you see on Google) plus a transparent fee of typically 0.4-0.6%.

No hidden markups, no exchange spread. That's the entire trick.

Main benefits of Wise for travellers and freelancers

Why add it to your wallet:

Real (mid-market) rate - no markup. On a card payment in a foreign currency you save 1-3% over most banks.
Multi-currency account - hold balances in 40+ currencies simultaneously, convert whenever you want.
Local bank details - your own EUR IBAN, GBP sort code, USD routing number, AUD BSB. A US client sends you dollars as if to a US account - no SWIFT fees.
Debit card (Mastercard or Visa) - free payments in any currency, free ATM withdrawals up to 200 GBP/month, small fee after that.
Transparent fees - before confirming, you see exactly how much lands on the other side.
Regulated - FCA (UK), CNB licence (EU via Belgium), client funds held separately.

Downsides worth knowing

Wise isn't a magic bullet. What to expect:

It's not a classic bank - you don't earn interest on the balance (apart from USD/EUR/GBP "Interest balance" in some countries).
ATM limits - past the free tier (typically 2 withdrawals / 200 GBP a month) it's 1.75% + a fixed fee.
Some exotic currencies convert at a higher fee or aren't instantly available.
For everyday spending at home, your local bank still makes sense - Wise doesn't have a Czech branch or local CZK account number.

Examples where Wise makes sense

1. A traveller in Thailand paying by card in THB. Instead of the bank charging 60 USD for a 1000 THB purchase (with a 2% rate markup), Wise converts at mid-market - easily a few dollars saved per transaction. Over a longer trip that's hundreds.

2. A freelancer invoicing a US client. Instead of the client paying via SWIFT (25-40 USD on both sides plus a bad rate), they wire the dollars to your US account in Wise as a local transfer - free, by the next day.

3. A digital nomad before a Mexico trip. Converts 2000 EUR → MXN inside Wise at mid-market. After landing they have pesos in the app, withdraw from an ATM or pay by card with no extra rate.

4. A parent sending money to a kid on Erasmus in Spain. Instead of a 15 EUR bank transfer with a lossy rate, they send EUR via Wise for fractions of a percent. Arrives within hours on the Spanish account.

5. An e-commerce shop accepting payments from multiple countries. A Wise Business account can receive payments in local currencies without SWIFT and hold them until the right moment to convert.

Wise vs. Revolut - when to use which

Both cards are great, but they go about it slightly differently. You can find a detailed comparison on the Revolut detail page, but in short:

Wise = cheaper rate for big/occasional conversions, better for freelancers and receiving money from abroad.
Revolut = better for everyday spending abroad, more "bank-like" (interest, insurance, premium features), more free ATM withdrawals.

Best combo: Wise for receiving and big conversions, Revolut for daily card spending.

How to start

Opening a Wise account takes about 5 minutes and is free. The card costs roughly 10 USD one-off (mailed to your home address).

Conclusion

Wise isn't a sexy product. It's boring, transparent infrastructure that does one thing properly: it moves money across borders at the real price. From those two Tallinn-born friends who got fed up with bank fees, it's now a global fintech - and the logic for using it hasn't shifted an inch in 13 years.

If you travel, invoice abroad, live across two countries, or just occasionally send euros to a sibling in Berlin - Wise pays for itself on the very first transfer.