Seattle startup Remitly just announced pricing for its new international money-transfer service to the Philippines, and customers are probably going to like the price.
Money transfers of more than $100 are free — if you’re willing to wait three business days. If the money needs to be wired immediately, Remitly plans to charge a flat rate of $4.99 or less.
How does the company, bankrolled by the likes of Amazon.com founder Jeff Bezos; Google chairman Eric Schmidt; Isilon co-founder Sujal Patel and John Stanton’s Trilogy Equity Partnership, plan to make any money?
CEO Matt Oppenheimer says that they make some revenue on the foreign exchange rate spread when it holds the money, but he notes that its rates are far below other competitors in the market. Those include Western Union, Moneygram and Xoom, the latter of which is a San Francisco company that went public earlier this year at $16. (It is now trading at just over $20 per share, with a market value of $647 million).
Remitly, formerly BeamIt Mobile, is led by Oppenheimer and Josh Hug, who previously sold book social network Shelfari to Amazon.com. It has raised $5.1 million to date, including cash from Seattle angel investors Geoff Entress, Alex Algard, Chris DeVore and Neil Patel.
Oppenheimer started Beamit in Boise, Idaho, but relocated the company to Seattle after getting accepted into the TechStars incubator program. He came up with the idea while overseeing mobile and Internet banking for Barclays Bank Kenya, helping them implement a new mobile banking strategy.
Remitly is licensed to operate in 18 states (including California, Washington, and Oregon), and the company said that it has transferred “millions of dollars” to date with transaction volume up 200 percent in the first quarter of 2013.
Previously on GeekWire: Bezos-backed Remitly lands $2.6M to help immigrants send money home