TransferWise, Mastercard bring global gig-worker debit card to U.S.

As the global gig economy expands, more workers moving between the U.S. and other countries for jobs or school need ways to handle funds in different currencies.

London-based international remittance company TransferWise is addressing this pain point by introducing a cobranded Mastercard debit card in the U.S. that supports multiple currencies so users can earn and spend in any currency with no markup on the exchange rate, TransferWise announced Wednesday.

The product builds on a similar one TransferWise rolled out last year in Europe that’s gained in popularity. A feature available only with the U.S. version of the card enables customers to link it to digital wallets like Apple Pay and Google Pay, TransferWise said.

One of the most popular features for cost-conscious gig workers is TransferWise’s instant notifications confirming payments and transfers, with the latest exchange rate on each transaction, said Josh Aziz, TransferWise’s head of product for North America, in an interview.

“A lot of cross-border payment apps mark up the exchange rate on transactions and users don’t learn the ultimate cost is until later, but we have no markup and we show the total cost of the transaction and any fees instantly, which is pretty unusual in this niche,” Aziz said.

The U.S. TransferWise debit card targets immigrants, gig workers, travelers, expats and entrepreneurs who want to take the funds they earn in one currency and spend them in another one, using TransferWise’s network of banking licenses in key markets around the world.

TransferWise’s debit card supports direct deposit, and while unbanked consumers are eligible to apply for it, the product works best for workers with a local bank account to enable free ingress and egress of funds, Aziz said.

“We think of this as a multi-country card, so if you’ve got funds loaded to the card in U.S. dollars and you go to the U.K., you can move dollars to pounds within the app and get the best exchange rate to eliminate fees,” Aziz said.

TransferWise's business model is based on repeat usage, and so far it's accumulated more than $10 billion in deposits from a core base of freelance and small-business users, according to Aziz.

TransferWise contends its fees for sending funds across borders are 12 times lower than the average fees charged by U.S. banks and PayPal.

The cost to convert US$1,000 to U.K. pounds is $7.25, and there is no fee for receiving the same amount from the U.K. in dollars, TransferWise said.