From Faster Payments to PIX: Wise’s infrastructure play

Hey!

I’ve been planning to write about Wise for a long time. Wise is a UK Fintech company (founded by two Estonians) that enables individuals and small businesses to send and receive money internationally at significantly lower costs than traditional banks. Wise competes with PayPal Xoom, Remitly and a bunch of traditional remittance companies.

However, under the hood, Wise is a totally different play pursuing a much bigger opportunity. In pursuit of its mission, making cross-border payments fast and cheap, Wise is building a global payment network, aiming to connect to as many domestic rails as possible and eliminate the need for correspondent banks.

In this respect, Wise is somewhat similar to Citigroup, one is one the largest correspondent banks in the world. Similar to Citi, Wise establishes a local presence, gets regulatory permissions, and eventually wants to connect to local rails. Citi’s network is its crown jewel. And Wise is replicating it. 

Now, imagine if Citi had the technological muscle and agility of Wise and could put its global network in the hands of consumers and small businesses instead of solely serving large enterprises and other banks. This sounds like a massive opportunity, doesn’t it? And it is an opportunity that Wise is pursuing.

Let’s dive in!

Jevgenijs

p.s. if you have feedback just reply to this email or ping me on X/Twitter

I think some of my readers might not be familiar with Wise $WIZEY ( ▼ 0.51% ), a cross-border payments company based in the UK. You might be familiar with its U.S. competitor, Remitly $RELY ( ▼ 0.7% ) , though. If you are not familiar with either of them, it’s even better! Just keep reading!

Wise enables individuals and small businesses to send and receive money internationally at significantly lower costs than traditional banks (Wise also powers cross-border payments for many neobanks, but more on that later).

At first glance, Remitly seems to be doing pretty much the same thing, with the key difference being its focus on individual consumers. As mentioned above, Wise serves consumers, small businesses, and even larger enterprises through its Wise Platform offering. Remitly just recently started exploring the opportunity of serving business customers.

Wise is a bigger player, handling significantly higher cross-border payment volumes than Remitly. Even if we focus solely on consumer volumes, Wise processed more than twice as much as Remitly in 2024 - $128.6 billion versus $54.6 billion. Including business transfers, Wise’s total cross-border volume in 2024 was $174.9 billion.

Wise’s revenue is well-diversified between the UK, Continental Europe, North America, and Asia-Pacific. Remitly has a higher geographical concentration than Wise, with the primary use case being customers in the U.S. and Canada sending money to India, Mexico, and the Philippines.

Wise also has a broader product offering, including Wise accounts (and debit cards) for consumers (“Wise Account”) and businesses (“Wise Business”). Wise customers can hold funds in their Wise accounts and use them to send and receive both domestic and international payments.

Actually, at the end of 2024, Wise customers held $20.8 billion in their Wise accounts, up from $16.4 billion a year ago. As can be seen from the chart below, Wise accounts are actively used by both consumers and small businesses.

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