HSBC launches Global Money account in US to rival fintechs
HSBC is launching an account in the US designed to rival cross-border payments fintechs like TransferWise.
Global Money is a free, no-fee account, which facilitates transfers between 20 different markets. HSBC plans a set of new geographies to join in 2021.
It follows Santander’s launch of PagoFX, another incumbent effort to rival cheaper, fintech alternatives to cross-border payments.
The bank’s aim behind the new service is to create “one global account” for customers to use both at home and abroad.
“This will allow them to pay bills in multiple markets, make cross-border transfers and spend like a local wherever they are”. That’s according to Carolyn Criscitiello, HSBC USA’s head of digital payments wealth and personal banking.
Is it really competition?
In its current state, HSBC’s new service doesn’t really rival TransferWise. It allows two HSBC customers to send money between two different countries.
But this isn’t a new service for the wider industry, with banks such as Citi having already rolled out the same service.
HSBC does have plans to fully rival the likes of TransferWise. Criscitiello adds that the bank intends to extend the payment service to facilitate instant international transfers to customers with other banks, too.
TransferWise isn’t slowing down
TransferWise’s model uses the standard mid-market rate. shown by platforms like Google and Reuters. This is what the firm claims makes it cheaper than bank alternatives.
In August, the fintech extended its card issuance partnership with Mastercard to issue cards in any market where the latter is accepted.
The two firms have worked together since 2018, previously covering the European Economic Area (EEA), US, Singapore, Australia and New Zealand.
It also recently landed a licence from the Financial Conduct Authority (FCA) to offer retail investment services in the UK.
TransferWise hit a valuation of $5 billion in late July. The valuation followed a liquidity round which saw $319 million worth of shares sold by employees and stakeholders.
Last year, the fintech was on a valuation of $3.5 billion. It says it has seen a 43% uplift in its value since May 2019.