Investing Talk #34: Wise Business

1. Company overview

• Wise plc (ticker: WISE on the London Stock Exchange) is a UK-based fintech company that provides international payments, multi-currency accounts and related services to both individuals and businesses. StockAnalysis+2Yahoo Finance+2

• It was founded in 2011 (originally as TransferWise) and rebranded to Wise. StockAnalysis+1

• Wise operates in many geographies (UK, Europe, Asia, North America) and its product mix includes both cross-border transfers and multi-currency business accounts. Yahoo Finance+1

2. Core business & how it works

a) Services for businesses

• Wise offers a Business Account that allows companies to hold, send, convert and receive money in multiple currencies. Exiap+1

• Features include:

  • Holding 40+ currencies (or more, depending region) and being paid in local account details in several currencies. Currenciap+1

  • Sending money internationally with fees displayed upfront (often lower than traditional bank transfer fees). FourWeekMBA+1

  • Business-friendly tools: batch payments (upload many recipients at once), permissions for users/teams, accounting software integrations (e.g., QuickBooks, Xero) via API. Business Expert+1

b) Revenue / monetisation model

• Wise’s business model is built on offering transparent, low-cost currency exchange and transfer services. REVERB | Full Service Marketing+1

• For business transfers: Wise charges fees for converting currencies and for sending funds. The fee depends on the currency pair, amount, and whether you’re using a bank debit/credit payment or local bank payment. FourWeekMBA+1

• They earn from the “spread” (though minimal) and explicit fees rather than hidden mark-ups. Wise emphasises using the mid-market rate (the “real” exchange rate) plus a transparent fee. Miracuves+1

• Business volume matters: the more money flows through their platform (especially cross-border), the better scale they get and the more margin they can realise. FXC Intelligence+1

c) Business model overview

• Wise is a platform connecting different users: those sending money, those receiving money, and the infrastructure (currencies, liquidity, rails). It essentially acts as the payment/FX engine for many businesses. Business Model Innovation

• They invest in infrastructure (payment rails, currency markets, bank-partnerships) to reduce cost per transaction and pass savings to users. Netguru

3. Strategic strengths

• Transparency & cost-competitiveness: Wise’s slogan of “real rate, low fees” resonates strongly with businesses who deal internationally and are sensitive to FX costs.

• Global/multi-currency capabilities: For businesses paying suppliers or employees in different countries, Wise’s multi-currency hold and conversion tools are very useful.

• Scalable digital platform: Being digital-first means lower overheads compared to legacy banks; batch payments, APIs and integrations make it appealing for “business-with-global-reach”.

• Growing global footprint & rails: Wise has been expanding its payment-infrastructure capabilities (for example, in Japan it gained access to a major domestic clearing network) which strengthens its competitive position.

Reuters

Wise becomes first foreign firm to gain direct access to Japan's payment clearing network

Oct 17, 2024

Financial Times

UK fintech Wise to switch main listing to New York

Jun 5, 2025

The Wall Street Journal

Wise PLC Shares Slump After Slower Income Growth Forecast

Jun 13, 2024

4. Risks & challenges

• Not a full bank: For businesses, Wise is not a traditional bank—non-bank deposits may not have the same protections (depending region), there’s limited or no lending or deposit-insurance in some jurisdictions. Business Expert

• Regulatory/compliance risk: Cross-border payments are heavily regulated (AML/KYC, sanctions) and some business users report that accounts can be frozen or restricted if compliance issues arise. For example:

   

  “Wise must absolutely not be trusted as a business bank account… My business with them is done.” Reddit

   

• Service interruption / account risk: Digital-only platforms sometimes have less recourse, and users have reported issues with account freezes, delays, or regulatory holds. Reddit+1

• Margin pressure & competition: As more players enter the cross-border/fintech payments space, Wise faces competition from neobanks, other fintechs, and even large banks improving their FX/transfer offerings.

• FX/rail-infrastructure costs: Even though Wise works to minimise them, keeping liquidity and payment rails across many currencies & geographies involves fixed cost and operational complexity. Miracuves

5. What this means for businesses (practical points)

If your business deals internationally (suppliers, payroll, converting currencies, receiving payments in foreign currencies), Wise Business Account may offer strong value. But you should evaluate carefully. Key things to check:

Pros to consider:

• Low fees / transparent pricing for international transfers and currency conversion.

• Ability to hold multiple currencies, receive payments in local currency details (in some currencies) and pay overseas without huge FX mark-ups.

• Useful features: batch payments, API/integration, expense cards for employees.

• Good for businesses with global suppliers/customers or frequent currency movement.

Cons / things to verify:

• Because it’s not a full-service bank, you may have to maintain another business bank account for things like cash deposits, local credit lines, etc.

• Verify what protections (deposit insurance, regulatory regime) apply in your country for funds held in Wise.

• Be aware of compliance risk: if your business has complex flows or unusual transactions, you may face review or account restrictions.

• For purely domestic operations (single currency, no global supply‐chain) the benefits of Wise may be marginal compared with a local bank.

• Check the fees for your specific currency pair and flows: e.g., receiving USD from U.S. clients, paying suppliers in China, etc.

6. Strategic outlook & growth

• Wise is targeting further global expansion & infrastructure upgrades (for example, direct access to domestic payment networks). This should reduce costs and improve speed for its users. Reuters+1

• Its business segment (business accounts + cross-border payments) is likely to grow as global business commerce becomes more digital and borderless.

• The challenge will be maintaining margin while scaling, competing effectively, and managing regulatory/compliance overhead.

• For businesses using Wise, staying aware of how Wise manages regulatory compliance (and your business’s alignment) will be key.

7. Summary

Wise plc is a well-positioned fintech player offering multi-currency and cross-border payment solutions, with a business account product that is particularly suited for companies with international operations. Its strengths lie in transparency, cost efficiency, and global reach. However, for businesses, it should not necessarily replace a full-service bank unless your needs align with a digital, cross-border focus and you're comfortable with the fintech regulatory model.