From today, transfer fees to the Eurozone and Switzerland have dropped from 0.5 to 0.35 per cent, to the United States of America from 0.5 to 0.4 per cent, and to Australia from 0.7 to 0.45 per cent.
In addition, every transaction now has a flat transaction fee as well as a percentage fee, replacing the £2 minimum fee for transfers.
Transferwise says this will make smaller transfers cheaper overall, but will make medium-sized transfers more expensive to cover the real cost to the firm.
It has also announced that the prices for sending money to countries like Hong Kong, Poland and Bulgaria are set to increase in December, to cover costs and keep the routes open.
The news has been welcomed by UK customers, according to money transfer comparison tool Monito, especially as the value of Sterling continues to be unpredictable in the wake of Brexit.
Recent data from Monito shows that Brits are losing £600m per year in excessive international transfer fees. However, this new price drop will make Transferwise the cheapest way to send £5,000 to the United States.
Direct rival Revolut, which previously aimed to undercutTransferwise by making international transfers cheaper through its premium app and Turbo option, will most likely be rushing to adapt to competition.
Revolut CEO Nik Storonsky has been critical of Transferwise before, accusing its boss Taavet Hinrikus of “fear mongering” after saying at a conference that he wouldn’t choose to base Transferwise in London in a post-Brexit world.
Transferwise itself is performing well, having posted its first operational profit in May this year. It is set to achieve revenues of £100m by the end of 2017, and was recently valued at $1bn in its latest round of funding.
François Briod, CEO and co-founder of Monito, has weighed in, saying “Transferwise’s decision to reduce transfer fees will likely cause a ripple effect amongst competitors within the international money transfer industry. Companies that follow suit and promote transparency will win over consumers and ultimately, come out on top.”