ImpactAlpha, March 28 – Israeli fintech company Rewire has secured $12 million for its digital banking platform that allows migrants to affordably transfer money to friends and families bank home. The company’s funding round was backed by venture capital firm Viola FinTech, BNP Paribas’s venture capital arm Opera Tech Ventures, Standard Bank, OurCrowd, Moneta Fund and several private investors.
Fintech and blockchain companies targeting the high-cost international money transfer market have made progress on reducing average transfer rates in recent years. But the average cost of sending money from one country to another is still above 7% – higher than the 3% target set out in the 2030 Sustainable Development Goals. In parts of Africa, rates are 10% or higher.
Rewire launched in 2015 to help migrant workers save on money transfers and access mainstream banking services. “We have seen a surge in global migration in recent years and identified an opportunity where Rewire can provide an efficient, transparent and affordable international banking platform for migrants which have previously been disadvantaged by banking systems,” Rewire’s Guy Kashtan said in a statement.
The company offers a free online bank account through a partnership with South Africa-based Standard bank, and its own money transfer service, which it says costs 60% less than other banks. Its account holders can transfer money both to receivers’ bank accounts or for cash pick up.
Rewire’s accounts number in the tens of thousands, primarily in Italy and Germany, and it caters largely to migrants from Nigeria, the Philippines, India, Sri Lanka, Nepal, and Thailand. Funding from the equity round will be used to expand to other European markets and build new bank partnerships.