Till Wirth, product director at Wise, spoke to FinTech Intel to discuss making cross-border payments instant, convenient and eventually, free.
Can you tell me about Wise?
Wise is a global technology company building the best way to move and manage money around the world. Today, we have over 16 million personal and business customers, and we move around £25b each quarter. Our USP is that we move money internationally faster and at a lower-cost than other providers, and we are always transparent about the fees we charge. Over the past year, we have saved customers $1.5b in fees.
Can you talk about the consumer and enterprise parts of the business?
The consumer brand, or Wise Account, is still the biggest part of our business. We have spent over a decade building this amazing infrastructure that moves money across borders in a seamless way, and we now serve 16 million personal and business customers globally.
A few years ago, we realised that by offering this same infrastructure to other financial institutions and enterprises, we could help them to move money faster and at a lower-cost too. So, we built Wise Platform to bring all the benefits of Wise to what’s now over 70 partners globally.
For our partners, it can be useful to think of the Wise app as the billion-dollar demo app showcasing the power of our infrastructure. Our goal is to make everything available on the Wise app available to our partners, so that they can offer faster, cheaper international payments directly to their own customers directly.
Wise Platform is a major focus for us and it will become a bigger part of the business over time.
You started off in publishing, spent some time working for the UK government, then at TrueLayer, before joining Wise. How do those experiences help with your role now?
TrueLayer is an awesome scaleup in the fintech space, so it’s similar in a lot of ways. It’s also a B2B company which has given me a strong understanding of how to frame product offerings that resonate with the right audience, and crucially, solve their problems.
At the UK government, I also worked in payments. While I was there, I learned how decision making happens at big organisations. There are some parallels working for a government compared to a financial institution, such as how you deal with compliance and security.
Can you talk about the technical details of Wise’s infrastructure, and how it’s used by your partners?
We have spent over a decade building our own proprietary global payments infrastructure. We have over 50 licences, four direct connections to central banks and payment schemes, and over 100 bank partners worldwide. By building this network ourselves, we are often able to reduce the number of intermediaries needed to process an international payment, which brings down costs for customers and makes payments faster.
We also work very hard on the operational side of payments, such as being able to resolve sanction hits in a very efficient way.
We provide several integration methods at Wise Platform, each of which allows them to leverage our network in a slightly different way. For example, we offer easy-to-use API integrations which are simple for our fintech partners in particular to integrate. But this isn’t necessarily the case for some of our big bank partners, who are reliant on their existing payments architecture. Our new Correspondent Services solution solves this problem by allowing banks to connect to Wise Platform simply by redirecting their Swift messages to Wise.
Cross-border payments is a growing market. Where do you see it heading in the next five to 10 years?
Wise currently powers 3.5% of cross-border payments. I think both the overall market and our share of it will only continue to grow. Which is very exciting.
Some people only want to send a cross-border payment twice a year. In that case, it’s probably not a high priority for them to open a Wise account just for those two transactions. But they are still losing money regardless. Our vision is to help banks provide their customers with all the benefits of Wise directly within their existing app or platform. That way, customers gain faster, lower-cost and more transparent international payments, without the inconvenience of switching providers.
What can improve international payments?
At Wise we advocate for countries to develop instant payment schemes and then to provide direct access to those schemes to fintechs like us. In fact, Wise was the first to integrate into the faster payments service in the UK.
Some countries are already ahead of the game—Australia has recently implemented NPP, an instant payment scheme. But where these don’t exist, it’s harder to send money instantly, which is in the best interest of the customers in that market. It’s especially important as instant domestic payments become the standard, because consumer demand for the same speed when it comes to international payments will only grow.
We also actively campaign for greater transparency when it comes to international payments. It’s unfortunate but transparency won’t happen on its own. Legislation that enforces the transparent breakdown of fees for customers from banks is the best way to ensure that customers know what they’re paying and to help them make informed decisions about which provider they choose to send money with.
Why is instant so important?
First, it’s important to define what instant even means. We define instant as a payment that settles with the recipient in less than 20 seconds after it was sent. If it’s 21 seconds, it’s not instant anymore in our data analysis. Last quarter, 57% of the payments made on Wise’s global payments network were instant.
It’s simple: people need money to move instantly, no matter where it’s going. If you’re on holiday and you end up needing an urgent operation, you might need your family to send you money to cover those costs in a matter of minutes. A less extreme example might be needing to pay rent in another country.
We also know what happens when money doesn’t move instantly: customer contacts skyrocket because they’re concerned about where their money is. This is inconvenient for the customer, as it takes up their time, and it entails an additional cost for Wise, too.
What’s in the pipeline for Wise?
Over the last few years, Wise has grown from a money transfer company to an international account allowing customers to send, spend and manage their money internationally. You can see more about our mission roadmap on the Wise website.
My job at Wise Platform is to eventually make all of these features available to direct Wise customers available to banks and enterprises, too.