TransferWise, the international money transfer platform started by the first employee of Skype, has today launched the world’s first peer-to-peer money transfer app.

The free app, which is compatible with iPhone, iPad, and iPod touch, enables users to bypass banks and their ‘hidden fees’ in order to transfer money abroad cost effectively and at the touch of a button.

To set up a payment users simply select currencies, import contact/payment details and upload the amount they wish to transfer. TransferWise then processes the money and sends a final notification when the payment has been completed.

Taavet Hinrikus, co-founder of TransferWise, said: “This new app has been designed to take the hassle out of transferring money overseas, by saving users both time and money. We offer significantly cheaper and more transparent money transfers than banks – just 0.5% of the money being transferred, while banks charge up to 5%.

“We can afford to do that because our technology bypasses the traditional international bank payments system and directly matches consumers and companies in different countries who want the opposite currency.

Following the launch of the app, users will now be able to take advantage of the service while on the go. So, whether you’re an international student, expat or business owner, the world really is becoming a smaller place”.

TransferWise was founded by Mr Hinrikus, a former Skype director, and consultant Kristo Käärmann in 2010. Following a recent $6m (£3.9m) investment from Peter Thiel, the co-founder of PayPal and influential Silicon Valley venture capitalist, TransferWise is transferring up to £1 million a day for consumers and small businesses.

Following the investment, TransferWise has launched a new ‘pay button’ service to allow freelancers and small companies to easily invoice and receive payment from overseas clients at the lowest possible cost to both parties.

It has also doubled the number of currencies it offers – with the Indian Rupee, South African Rand and Turkish Lira among those recently added – so more of its users can avoid the complexity and hidden costs associated with traditional foreign exchange providers.

Unlike banks and brokers, TransferWise is always transparent about its pricing. The technology removes the hidden fees that have been used by traditional foreign exchange companies for decades. It can be up to 10 times cheaper than using a bank.