Wise Expands Global Reach as Customer Growth Hits 25%

International money transfer company Wise plc has reported a 25% increase in active customers to 11.4 million in the six months to September 2024, marking a 2.8-times expansion in its customer base over four years as the fintech deepens its integration with domestic payment systems.

The London-based firm, which offers cross-border payments and multi-currency accounts, processed £68.4bn in transactions during the period, representing 19% growth year-on-year on a reported basis and 21% at constant currency. This volume growth has driven a 3.4-times increase in underlying income and a 7.7-times rise in underlying profit before tax over the past four years.

Boosting infrastructure investment

Wise has added three new approvals for direct integration with domestic payment systems in Brazil, Japan and the Philippines, bringing its total to eight connections once fully implemented. Direct integration allows Wise to process payments through a country's central payment infrastructure rather than relying on correspondent banking networks.

“Our infrastructure is developing quickly. This week we launched our sixth live direct connection to a domestic payment system, this time in the Philippines,” Kristo Käärmann, Wise’s Co-founder and Chief Executive Officer, said in an earnings statement.

The company reports that 63% of transfers now complete instantly – defined as under 20 seconds from end to end. This increases to 83% of payments completing within an hour and 94% within 24 hours.

Regulatory developments, fee reductions and market share

In India, Wise secured approvals to remove a previous US$5,000 cap on outward transfers, which the company expects will reduce costs for Indian corridor transactions. The firm also obtained an Australian Financial Services Licence for Investments, enabling it to launch its 'Assets' investment product in Australia.

The company's average cross-border take rate - the fee charged as a percentage of transfer value - decreased to 62 basis points, down 5 basis points compared to the previous year. The rate entered Q3 FY25 below 59 basis points.

“Our customers value the speed, convenience and price we offer, with over 70% of new customers joining Wise through recommendations by existing customers,” says Kristo.

Wise holds regulatory licenses across 65 jurisdictions and maintains relationships with over 90 local bank partners. The firm estimates it has less than 5% market share in personal transfers and under 1% in small-medium business transfers across a total addressable market of £27 trillion.

“If we maintain our focus on this long-term opportunity, Wise has the potential to move trillions rather than billions around the world as 'the' network for the world's money for cross-border transfers,” says Kristo.

Partnership and product development

The company's Wise Platform division, which provides infrastructure for banks and fintechs to offer international payments, added partnerships with Brazilian digital bank Nubank, French business banking platform Qonto, and UK foreign exchange provider AbbeyCross.

A new agreement with Standard Chartered will power the bank's SC Remit service, enabling customers across Asia and the Middle East to send money in 21 currencies.

Customer funds held with Wise increased 31% year-on-year to £18.5bn, including £3.8bn in its 'Assets' investment feature. The proportion of personal customers using multiple account features rose to 53% from 44% year-on-year, while business customers' multi-feature usage increased to 60% from 58%.

Financial outlook

The company expects investments in pricing during the first half of FY25 to move its underlying profit before tax margin towards a target range of 13-16% in H2 FY25, from 22% in the first half.

“It's reasonable to expect that in ten years, someone can transfer $10,000 across currencies for $10, compared to the current banks' price of $200-$400. We intend Wise to be the one operating these transactions at that price point, with our cost base brought down to $5 or less,” says Kristo.

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