TransferWise Ltd., a British peer-to-peer money transfer startup launched last week on the promise of cheaper prices, is betting its service will change the way Japanese and foreign residents send and receive money overseas.

“We are very honored to have finally made it to Japan,” said Taavet Hinrikus, CEO and co-founder of the London-based fintech firm, during a visit to Japan last week.

“We knew from the beginning that we are solving a global problem. We’ve always wanted to make sure it’s available for customers everywhere,” said Hinrikus, a 35-year-old Estonia native who used to work for Skype.

TransferWise, which was founded in 2010 and has more than 1 million users worldwide, works by member matching — finding a service user in the target country looking to transfer a similar amount and then matching the currencies to keep the bank transfers local, thus eliminating many cross-border and other the banking fees.

For instance, if person A in Japan wants to send $1,000 to a party in the U.S., TransferWise finds a person B in the U.S. who wants to send the same amount to Japan. The transaction is then carried out by the firm locally on both ends.

Hinrikus said another reason that TransferWise can make the company’s service cheaper is because the platform is online-based, meaning there are no costly physical branches to maintain.

While cheaper fees are generally appealing to customers, a major challenge for the firm is to actually get Japanese to use the service as many people often only trust conventional banks when it comes to handling their money.

“What’s going to be hard for us is to earn the trust of the Japanese people,” said Hinrikus.

Hinrikus said TransferWise aims to gain 5 percent of the remittance market in Japan in two to three years, targeting about 1.3 million Japanese people living overseas and 2.2 million non-Japanese in Japan who are looking for better ways to transfer money to other countries.

Our aim is “making sure that it’s fast, making sure that it’s low-cost and easy to use,” he said.

To use the service, people need to register with TransferWise’s online platform, which is also available for smartphones. They can begin using the service after submitting bank account details and identification checks.

TransferWise said the cost is roughly three times cheaper compared to transferring money through banks in Japan.

TransferWise, which allows people to send money to 55 countries, charges ¥500 for sending less than ¥50,000 or 1 percent of the total amount transferred when wiring ¥50,000 or more.

Japan Post Bank, for example, charges a basic commission of ¥2,500 and an additional cost of at least ¥1,000 for most recipient banks. Sumitomo Mitsui Banking charges a ¥4,000 fee and ¥2,500 to recipient banks.

In addition, banks usually make a commission on the exchange rates, which TransferWise said is another “hidden cost.”

Sumitomo Mitsui adds ¥1 to its daily exchange rate, meaning customers pay ¥1 per $1 dollar, though the bank said this can be discounted for those who send large sums or are corporate customers. Japan Post Bank said it does not disclose its rates.

TransferWise said the firm does not charge commissions on exchange rates, stressing that the cost is just 1 percent of the transferred funds.

TransferWise is a licensed money transfer service provider in Japan, so it deposits money with the Legal Affairs Bureau. That means, even if something happens to the company, the bureau will make payouts to its customers.

Hinrikus said that TransferWise has mostly grown through word of mouth, so he hopes that positive feedback in Japan will also help it grow.

At the same time, he said the firm may look for partnerships to promote the service.

“We are starting to think about it now,” he said. “Now that we have launched, we’ll be looking for any opportunity that makes sense for our customers.”

While the firm is expanding its business overseas, with Japan becoming the eighth country to have a base office, he said it has yet to make profit.

Still TransferWise has already raised over ¥11 billion from investors, such as Sir Richard Branson, Peter Thiel’s Valar Ventures and renowned venture capital Andreessen Horowitz. “We’re making very long term investments,” said Hinrikus.

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