Its motto is “money without borders”, but the £8.26 billion ($16.92b) payments technology company Wise only transacts an estimated 5 per cent of all money moved globally.
“We are still very much in the beginning and we have our hands full,” Wise co-founder and chief executive Kristo Käärmann told Markets with Madison from Sydney.
“There’s plenty of opportunity to get your money to work as well internationally as it does in your home country.”
Käärmann founded Wise, previously called TransferWise, alongside Taavet Hinrikus, the first employee at Skype, in 2011.
It’s now one of the fastest growing technology companies in the world.
It listed on the London Stock Exchange in 2021 - its valuation has slipped about 16 per cent overall, but improved this year with an increase of more than 40 per cent.
It has 10 million active users that can hold, manage and spend their money in varying currencies across numerous countries. It charged the mid-market rate for currency conversion and an average fee of 0.67 per cent from cross-border transactions.
It made a gross profit of £638 million ($1.3b) in the 2023 financial year, from revenue of £846m ($1.73b).
“We want to have people and businesses be able to use their money internationally, the way that they do it domestically, so make it cheap, make it fast, make it super convenient to pay and to get paid anywhere in the world.”
Ultimately, it wanted to stop consumers from being ripped off by foreign exchange fees - which Käärman said banks were not transparent about. “There’s still a lot of people who are figuring that out, a lot of business owners that are figuring that out and then starting to look for alternatives to their to their bank.”
Unlike banks, Wise does not lend money, so is not impacted by higher interest rates.
“If anything, it’s a bit of a financial tailwind to us.”
Wise Payments operates as a foreign entity in New Zealand and is not licensed by a regulator. It’s supervised by the Department of Internal Affairs (DIA) for anti-money laundering purposes.
Watch Kristo Käärmann discuss the money moving market and how Wise plans to win more of it, in today’s episode of Markets with Madison above.
Get investment insights from the experts on Markets with Madison on the NZ Herald - starting again on February 5, 2024.
Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.