How does Transferwise avoid transferring the money through traditional banking where the corridor is one way. Currently it does not allow transferring from Pakistan, so how do they balance the accounts without actually transferring the money?*
Maybe TransferWise doesn’t avoid the traditional banking channel in this case?
TransferWise is known to use the traditional banking channel even in bidirectional corridors when currency matching at either or both ends of the corridor is unlikely to happen within the traditional bank transfer duration of 3-5 days (because of insufficient transaction volume or whatever reason). Maybe the same is true in the case of unidirectional corridors.
AFAIK, TransferWise does not charge anything extra to Payers over its normal fees when it resorts to traditional bank channels. Since the company’s fees are lower than traditional bank transfer fees, we can only presume that it eats the differential cost, leading to a loss at transaction level.
Like all VC funded companies including fintechs, TransferWise is probably in the valuation game and is no under pressure to post profits. So, as long as it shows growth in user / transaction numbers, it can raise VC funds to fund its losses almost in perpetuity.
*: This is the original question I answered. I’m repeating it to help me make sense of my answer in case it’s moved to / merged with some other question that I didn’t answer.