Koho is diversifying beyond its core bank account features by adding the ability to send remittances, or international money transfers, to over 190 countries.
The Toronto-based FinTech firm claims to have better-than-average exchange rates, as it uses the live rate for every transfer. It also touts no hidden fees and quick transactions.
“Our focus is very much on being as helpful as possible to our users and not on what a traditional bank may offer.”
Ziv Deutsch
VP,
Growth and Data
Koho
Growth and Data VP Ziv Deutsch claimed in an email that Koho negotiated “preferred” pricing and offers the best rates on the market for transfers to the European Union (EU), India, Mexico, Pakistan, the Philippines, and the United States (US), which are some of the top money destinations for Canadians, while its rates for other countries are “competitive.”
Deutsch added to BetaKit that Koho did not roll out the feature with any specific competitors in mind. The main focus was on “creating more transparency and equity in the pricing,” the executive said.
He argued that banks and other money transfer providers tend to either add service fees or rely on markups.
Most of the market share for remittances has traditionally gone to conventional banks and money wiring companies like Western Union. More recently, companies like US-based Remitly and the United Kingdom’s Wise have aimed to shake up the sector with digital-friendly products. Some of them make similar promises to Koho’s, such as Remitly’s vow to eliminate hidden fees and deliver funds on time.
Koho was founded in Vancouver in 2014 and moved to Toronto in 2017. While the neobank doesn’t yet have a banking licence, it has widened its services over the years to include a prepaid Mastercard, a line of credit offering, credit history building for renters, and tenant insurance. It also has an eSIM (embedded SIM) product that lets travelers use data (but not calls or texts) abroad.
The company has completed multiple rounds of financing in recent years. It landed $210 million in a mix of equity and debt in 2022—one of the largest FinTech funding rounds ever raised in Canada up to that point—followed by a late 2023 $86-million Series D extension meant to fuel growth and profitability. A year later, it secured $190 million in equity and debt to help with its bank licensing efforts.
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Remittances are part of a broader expansion for Koho. The company has publicly previewed expansions that include cheque deposits and a buy-now, pay-later service with monthly installments. The international transfers were part of that roadmap. Deutsch told BetaKit that Koho planned to help Canadians with their finances in “whatever ways make sense for our users,” rather than to copy competitors’ features.
“Our focus is very much on being as helpful as possible to our users and not on what a traditional bank may offer,” he said.
Feature image courtesy of Koho.