Infra
Wise Will ‘Double Down’ on Payment Infrastructure Investment
![Wise Will ‘Double Down’ on Payment Infrastructure Investment Wise Will ‘Double Down’ on Payment Infrastructure Investment](https://www.pymnts.com/wp-content/uploads/2023/04/Wise.jpg)
Wise is upping its investment in payment infrastructure as its customer base grows.
The U.K.-based money transfer firm on Thursday (June 13) released year-end results showing double-digit percentage increases in revenue and customer numbers.
“We moved £118.5bn around the world for 12.8m customers, 29% more customers than last year, with much of this growth driven by the popularity of the Wise account,” said Kristo Käärmann, the company’s co-founder and CEO, who noted a 31% increase in underlying income.
“We are investing in infrastructure and customer experiences to serve as much of this huge, under-served cross-border payments market as possible, including starting FY25 by reducing fees further for our customers,” the CEO added.
Kingsley Kemish, the group’s interim chief financial officer, said Wise would “double down” on investment in its payment infrastructure, an upfront cost that the group is betting will allow it to cut fees by making the processing of payments more efficient.
Kemish said that the new forecasts would be a “slight detracting factor” but maintained the investment would help Wise to reach its long-term goal of becoming a global leader in the field of cross-border payments.
As the Financial Times (FT) reported, the earnings were a disappointment to investors, after the company revealed it was shooting for an underlying pre-tax profit margin of 13% to 16% medium term, which fell short of analysts’ expectations.
Hannes Leitner, an analyst at Jefferies, told the FT the forecast was “disappointing” and “created some uncertainty,” as Wise would depend on more investment to drive up its customer numbers and volumes.
Elsewhere on the cross-border payments front, PYMNTS wrote earlier this year that these payments have seen a resurgence along with global trade, although businesses operating in foreign markets often realize that traditional cross-border payment methods, such as wire transfers, come with delays and complexities.
American merchants lost $3.8 billion just last year to faulty cross-border payments, according to data in the PYMNTS Intelligence report, “Cross-Border Sales and the Challenge of Failed Payments.” That study also found that seven in 10 U.S. firms experienced higher rates of failed payments in cross-border sales versus domestic sales.
“Traditional cross-border payment systems are often slow, involving multiple intermediaries and manual processes, which can take several days to complete transactions,” PYMNTS wrote. “Innovation can streamline these processes, reducing the time it takes for funds to transfer from one country to another.”