Good morning, a warm welcome to everybody here today. I'm Martin Adams. I'm the Head of Owner Relations here at Wise. We have a presentation that we prepared for you today. It will take about 60 minutes. That'll be followed by Q&A. There are copies of the slides on the Owner Relations website if you would like to take a look at those. We'll be making many statements about the future this morning based on our current expectations.
Actual outcomes are subject to many factors and may therefore differ materially as a result. Please review our comments on the slide here and the risk factors that you can find in our latest Form 20-F filed with the SEC for additional information. With that done, let's get started. Please join me in welcoming to the stage the Founder and CEO of Wise, Kristo Käärmann.
Thank you, Martin. Thanks for organizing this. Hi everyone, and welcome from New York to those who are following us on the stream. Yesterday we listed our shares on Nasdaq. That was fun. It was awesome to be here.
It's awesome to be here, not only to meet the new owners, the new analysts who follow us, but also for the opportunity to grow into the largest market there is in the world for our products. With me today, I have some of my team and I'm actually quite inspired by our extended team, working on Wise, many of us over a decade together now.
What binds us together is this very clear mission that we're going to be talking about today and our irreversible impact on how money moves across borders. Together we're going to remind today what Wise does, what is unique about our infrastructure, our products, and how this creates value for both our customers and also for our owners. It's great to see a lot of long-term owners here, some of the new faces as well.
For those new joiners with us, let me take you back to why did we start Wise in the first place? For a long time, people and businesses have moved money internationally through their bank, and even if they're frustrated by the high cost, how long it takes, and the hassle, they didn't really have a choice.
Banks not competing with each other on those international transfers has led to decades of underinvestment in correspondence, in technology, in this infrastructure. Over the past 15 years, we've built Wise from scratch to give people and businesses a better way to move and manage money across borders. We've made money work without borders for them.
We're going to soon talk through what makes Wise fundamentally different than anything else in quite a bit of detail. Before we explain that, let me explain how our customers feel about that difference. When you ask people who do live across borders, travel frequently or run international businesses, they describe their experience with their bank, describe it as expensive, slow, and as a hassle.
Often they're actually most disappointed with the lack of transparency and fees and how unpredictable it is that the money is actually gonna arrive at the right person at the other end. To fix these cross-border payments, two things needed to be done. Firstly, completely rebuild a new payment network from the ground up.
When historically international wires relied on chains of correspondent banks across a number of jurisdictions stringed together, it caused the whole process to be unpredictable in cost and in time and in the effort that you need to go through. Now we're bringing together local central banks and instant payment systems into that one network. Secondly, on top of this network, we redefine what's possible for our customers and those customers we serve in three segments.
First of all, Wise Account for people, Wise Business for small businesses, freelancers, micro businesses, and Wise Platform for banks and financial institutions who are using our infrastructure to provide these benefits to their own customers. What does that mean for our customers? How has their experience changed after switching to Wise because of those two things?
In the last year alone, we estimate that we saved our customers, or rather they saved using Wise, $3.3 billion in those hidden fees on cross-border transactions compared to using their bank. Saving money is usually the biggest reason people say when they switch to Wise, but when they experience these transfers, it is the speed and the predictability that comes with it. This is what usually makes them glued to the product. We've completely redefined the expectations to international transfers.
On Wise, 75% of transactions, international transactions from one end of the world to the other, from one bank to the other arrive in less than 20 seconds. This is in contrast to the prevailing estimate of three-five business days that you still get from your bank. Given all of that, it's no wonder that 70% of our new customers who join Wise, it's because their family, their coworkers, their friends recommended Wise to them.
Which in turn means that our active customer numbers have grown very fast now to GBP 19 million at the end of last quarter. That's for the last financial year. Has the volume of money that we move in cross-currency transactions. Last year, GBP 243 billion, and this is growing fast.
As you'll hear from Nilan, it's no longer just the international wires that people use their Wise Accounts for. At the end of March, our customers held GBP 39 billion on their Wise Accounts and used their Wise cards for GBP 44 billion on travel, spending abroad and at home.
These are large numbers. In the context of the enormous size of this market, we're really only starting to scratch the surface. We move less than 5% of the money moved by people and less than 1% moved in the small business market. This means that overall, we're less than 1% of this enormous 43 trillion market of cross-currency transactions. It also means that there's a huge opportunity ahead of us. We've gone from zero 15 years ago to now moving a quarter of a trillion.
We are building this network and the apps to move trillions. We had a great start, but it's just the beginning. How are we going to get to the 1st trillion? How are we going to get to the next 10 trillions? My team will take us through the investments that we're making right now, how to make the money with out borders work for people, for businesses, and for banks.
In just a moment, Nilan Peiris will come on stage and introduce you to our products and to our customers. You'll hear about how we ship new products and enhancements and how we increase the velocity to do that. Harsh and Diana Avila will then explain the structural advantages that Wise holds through the infrastructure and the regulatory architecture that we're developing. Finally, the numbers.
Our CFO, Emmanuel, will explain how all of this translate into the financials and how the flywheel for growth works. We know this approach will make Wise an increasingly valuable company for customers and owners alike. Let me pass the clicker to Nilan, who's going to tell us about the products and customers. Over to you. Thank you.
Morning, everyone. I'm Nilan Peiris, Chief Product Officer here at Wise. I've been here for the last 12 years building our products here at Wise. I'm really excited to share with you the impact those products have had on our customers' lives. One personal highlight for me was launching our payouts to Sri Lanka, which is where my parents are from, a few years ago, delivering super fast, super cheap payments to Sri Lanka.
Whilst it was powerful for my family, I think it was the first time my dad really ever understood what I did at work. Onto our products. I'm gonna take you through the Wise Account for people, then onto Wise Business. A little later on, I'll talk about Wise Platform towards the end of the presentation. We build and deliver and expand our products at speed.
We started with the first cross-border transaction over 15 years ago. We learned that customers didn't want to just send money. They wanted to hold money internationally as well. For them, we launched the Wise Account in the U.K. Once they were holding money, they wanted to spend it. We then launched multi-currency debit cards. They wanted a return on their holdings. We launched Wise Assets.
The rate at which we've been deploying new features has been accelerating. We recently launched Wise Assets in Australia and in Brazil. Let me take you through in a bit of detail what's inside that Wise Account today and why customers are joining us. At the heart of it is still our money transfer product. Instant, transparent, low cost, and convenient payments.
Instant, 20 seconds for money to move from a bank account on one end of the planet, say in the U.K., all the way to Australia at the other end. Transparent, you can see exactly how much you are getting paid and really low cost. How much better this product is than the alternative directly correlates with the rate at which customers recommend us and our NPS and our growth, That is why we keep investing in making our products and payments better.
It is not just sending, it is holding. Customers hold more than 40 currencies within Wise, They use Wise Assets to earn a return. We have two products here, Interest and Stocks. Customers can hold their balances in interest in stocks, earn a return, Spend with their card on these balances. This multi-currency debit card is much more than that.
It's a really intelligent debit card. It uses the right balance when you're using it. If you're in Europe, it'll use your euro balance. In the U.S., your U.S. balance. If you have neither, it'll use whatever's cheapest. The Wise Account is so much more than that. We build scheduled payments, spending alerts. You can split bills with friends when you're out. Many banks and providers don't offer all of these features.
This is why customers keep coming back to us and spending more and more with us every day. We've taken AI and used it to create incredible experiences for customers in making payments more convenient. For example, when paying an invoice, you get these fiddly account details that you need to enter in and make sure you've entered it correctly for the money to turn up at the other end correctly.
What would be really cool is if you could maybe live demo. I've got video of a demo here. See if this works. If you could take a picture of the invoice like this. This is an invoice for some garden plants that we're giving to our designer. takes a picture of the invoice, and then Wise will scan this and automatically populate the recipient details with the account holder name and their account details.
This feature's live. There you go. That's a really convenient experience. One of the reasons customers keep coming back to us. Putting this all together, our vision for the Wise Account is to be the world's best account for managing and moving your money. Who are our customers? Today, they're customers with international needs, ranging from travelers through to remote workers, digital nomads, expats and immigrants, and freelancers.
As they have an increasing international need, we provide them increasing value, and our most valuable customers are the ones that use us the most. We also, you may have seen, launched a new product for a new segment, current account in the U.K., or what's known as a checking account in the U.S.
Here, we enable customers on their spending to earn a market-leading return of 3.26% through Wise Interest. They earn while they spend. They got this, the great international debit card and payments features. As we get to developing this product footprint in markets around the world, we'll be launching this everyday account globally. How does our roadmap evolve? Well, our investments in that international account are our primary route into the market for consumer cross-border payments.
We'll continue to invest in making this the best Wise Account for these use cases. We'll continue to invest in building and launching Wise Accounts globally. As customers hold more with us, we'll be giving them more opportunities to generate a return by onboarding new asset types. All of these investments result in increased utilization of the Wise Account, and these two metrics you'll hear a lot about today, cross-border volume and holdings will grow.
Moving on to Wise Business. Businesses come to Wise to pay and get paid internationally. To pay, businesses have invoices to pay. Most businesses have some international dimension, suppliers or customers overseas. With suppliers, they'll get an invoice to pay, and they start off by using Wise to pay that invoice.
They can also use Wise to get paid internationally. One feature of the account I've not talked about so far are these local account details. These are things like a routing number in the U.S., a sort code and account number in the U.K., an IBAN in Europe. If you're a U.S. business today and you have a customer in the U.K. and you want to get paid in pounds, small businesses don't have access to international accounts.
They'll need to fly out to the U.K., incorporate an entity, and then go to a bank to get a U.K. bank account. With Wise, with a few clicks, you'll get a U.K. account number, and you can put that on your invoice to your U.K. customers who get paid in pounds and keep the pounds there instead of having to move it back to dollars all the time.
Wise Business is so much more for this. We've made it work for your team, with payment approvals, the ability to add your team, multi-currency invoices you can set up within Wise, batch payments, API payments, employee debit cards, accounting integrations, plus so much more. Who are our customers for Wise Business? Today, they're predominantly small micro-businesses with less than 10 employees.
As we continue to invest in the product, we expect the size of businesses using Wise to increase. This all comes together into our vision for Wise Business, to become the world's best business account for moving and managing money. Let me take you through our roadmap to make that happen. Historically, as I shared, businesses came to Wise to pay, get paid, and hold and earn a return through our Send Money product, local account details, and Wise Account.
Today, they do more with control. They get employee cards, approval flows, create invoices with Wise, send them out, and get told when those invoices get paid. They earn a return on their interest and can set up groups with permissions. In the future, businesses will be able to run their entire financial operations on Wise as we continue to invest in building out expense management workflows.
We enable them to take payments online, and they add more asset types. Wise Business goes from just making payments easier to enabling businesses to run their entire financial operations. Putting this all together over the Wise Account for people and for business, it's a pretty simple story. We invest in making the account more and more useful.
This leads to consumers and businesses using us more and more every day, and this results in holdings growth, cross-border volume growth, and card spend growth. You'll hear from Emmanuel how we earn revenue on these. We've been really successful at making our product more and more useful. We grew send volume at 31% last year, spending at 37%, and holding at 40%.
Whilst we're really proud of those numbers, we're really proud of this number that Kristo shared earlier. The $ 3.3 billion that customers saved last year by using Wise instead of the alternatives. That GBP 3.3 billion in savings wouldn't be possible without our decades-long investment in infrastructure. I'm really excited to welcome our CTO on stage to take you through how we make that happen. Over to you, Harsh.
Thank you, Nilan. Hello, everybody. Good morning. I am Harsh. I am the Chief Technology Officer here at Wise, and I have been at Wise for 11 years. Actually, I have a story. About 20 years ago, I moved from India to the U.S. to go to grad school.
I paid 6% in exchange rate markups when I brought my first semester tuition to the U.S. Unfortunately, at that time, Wise did not exist. I didn't have an option. Over the years, I've lived a pretty international life. I've lived in, you know, India, U.S., in Europe. I found Wise as a key tool for me to continue to live this international life.
I basically bank with Wise, or it's my primary account, and my favorite feature is the ability for me to hold GBP, euros, and USD and earn a return on that everyday spending money every day. Together with, in the next few minutes, me and Diana Avila, who will come on later, will share with you the details of the infrastructure we have built that powers these products that Nilan Peiris talked about. And it's this infrastructure that really makes Wise very unique.
As Kristo Käärmann shared, we are building a network and products to move trillions around the world, and we have been making outstanding progress on this. This network is all underpinned by the Wise infrastructure, which we have built over the last 15 years.
This is what enables us to send money globally, have international accounts, like Nilan just shared, and give our customers unparalleled coverage and speed and price. Almost 19 million active customers used Wise last year. As more and more people and businesses use Wise, we get greater flows within the network. With that greater flows, we get more economies of scale, which leads to cheaper price and faster speeds. These are the better outcomes that people come to use Wise.
This is the flywheel that continues to make the network even better as more people join. This network is powered by this underlying Wise infrastructure, which we believe is the best infrastructure to move and manage your money around the world. This infrastructure has got four components. It's the technology, proprietary built from the ground up to solve this problem.
It's our global operations all around the world, 24/7. Also our regulatory footprint with our licenses and the ability to operate this infrastructure around the world and the connections for us to do payments and payouts and move money around the world. We will walk you through these components in more detail. This infrastructure is pretty scaled out. We now have over 80 licenses globally to operate Wise.
From a connections perspective, we use local bank partner and payment partners in over 90 local bank partners and payment partners in countries. Also we are super proud of our eight direct connections where we are directly connected to the instant payment schemes around the world and have settlement accounts with the central banks in these countries. We have over 1,000 engineers solely focused on this cross-border payments problem.
This is one of the biggest engineering teams in the world focused on this problem. Finally, we have an amazing operations team that helps our customers when they need help sometimes with moving funds or managing the funds across the globe. This infrastructure is what leads to these amazing outcomes. We're right now in the U.S.
Sometimes when you do domestic payments in the U.S., it's amazing to me that even ACH payment can take as much as same day to clear. What this infrastructure can do is move money between a source account in the U.S. or in the U.K. to a destination account in India or in Australia in less than 20 seconds. This is unheard of. This was unheard of seven years ago before Wise existed.
75% of our payments are now instant, and we do this at scale, but at really low rates. We charge on a blended basis 52 basis points for our customers, and we continue to invest to make sure this infrastructure is resilient and scalable. Going deeper on our technology. We have built Wise on a single global technology stack.
It is global by default and design. Let me give you an example. If you were banking with a, say, a bank in the U.K., and if you were to move, what would happen? Let You have a bank account in the U.K., you decide to move to the U.S. What would usually happen is you would have to go through full KYC or onboarding again with the new U.S. bank. You would have to give your documents.
You'd have to prove you're an individual who's allowed to live here. You would have to go be issued new account details, new debit cards, new internet login and password, new apps to be downloaded. That is not how Wise works. If you move from the U.K. to the U.S., you basically get the same product and the same experience.
Everything works seamlessly, and that's what allows you to be much more global in using a bank account. Also, when you think about how we've built these products and this infrastructure globally, we add a lot of local flavors to it, and this is this local unique expertise that we've built by not only how our payment systems work, but also how our teams are organized.
We have teams across Asia-Pacific, North America, and Europe who have key insights in these local markets in how the payment systems are evolving. The example I give to my friends who live in San Francisco or New York is you don't know how QR code-based instant payments are evolving and operating in Singapore because you've never experienced it in your life.
You have to live and breathe payments locally to be able to build an amazing experience, and this is what this infrastructure allows you to do, and also our team setup allows you to do. Finally, by having all of this code and all of this infrastructure in one common stack, this allows us to have insights on all the transactions and all the data that's moving through across the globe.
This allows us to build amazing machine learning models to help us manage our treasury system, building one global treasury system to manage our funds flow efficiently and predict where funds will be needed, for example, going into the weekend. Also, it allows us to fight financial crime much better because it allows us to build these models which are global.
This global-local setup is what makes Wise's technology very, very unique, and its infrastructure unique. We've always shipped pretty fast. As Nilan was showing, we've shipped a lot over the last few years, this shipping speed and execution speed continues to increase with AI. I thought I'd pull up a few things. These are three examples of how things have improved or gotten faster over the last 12 to 18 months.
Now at Wise, all our engineers are using AI to ship code faster and getting more features out for our customers. We already shipped multiple 1,000 times a month, while most banks ship usually a few times a quarter. That shipping speed has already gone up by 25% over the last year, and we have over 6,000 releases per month now happening.
I'm even more happy about the other two things that we've done. We've improved our experience for our customers to help themselves by using AI. We've launched a Wise Chat Assistant, which is completely powered by LLMs, and this allows customers to come and get their questions answered in a 24/7 manner without having to talk to a human.
The resolution rate or the quality of these responses are now showing that these resolutions are better than when a human is involved. We are getting close to 50% of chat contacts being powered by LLMs. Similarly, we are seeing amazing productivity improvements in our back-office operations.
We've built tooling such that our financial crime teams and onboarding teams who have to work through documents when customers onboard are being able to use AI end-to-end, and in some cases, we are seeing 50% improvement in operational handling times and giving that time back to our teams. These are just three things I thought I'd call out, but we have hundreds of use cases now in production being run by AI agents. Next, operations.
Moving money and managing funds across borders is hard work, and sometimes things do get stuck. When our customers need us, we are there for them 24/7, 365. We have invested heavily into bringing down contact rates and payment defects such that customers do not need to contact us, but when they do, we are there for them. I already covered our push into automation and how things are moving with the investments in AI.
There will still always be cases where a user will want to talk to somebody on the phone because they are moving money. Sometimes we have regulatory requirements where a human has to be in the loop before a transaction or a transaction goes through fully. Let me give you an example.
If you're a customer who is moving GBP 500,000 or $1 million across the world, you want a better experience or a different experience than if you're moving $ 10 around the world. That's where you may want to call us and get a much more white glove experience. We have invested in that, and that experience at Wise is called Total Service.
Similarly, business customers increasingly want someone who knows and understands their business. We've invested in account management experience for these businesses. This just isn't support. You don't call your account manager just when you have an issue, but they actually understand your business and help you grow more volumes on Wise. We invest in operations because we will always anchor our experience in high NPS customer interactions.
This is because we know a majority of our growth still comes from word of mouth. If you have a good experience when you talk to Wise or when you contact Wise or when you use Wise, that leads to the word of mouth wheel continue to move because you will tell your friends and family that Wise is great.
When I talk to our users, people are just amazed at how we've made things simple. What seems to usually be a very daunting task of moving and managing your finances globally, they basically said Wise has made it very simple. This simplicity is thanks to our infrastructure, the technology and the operations I just covered, but also how these two pillars interact and go hand in hand with the licensing and connections. For that, I will give it to Diana to cover these.
Thank you so much. Hello, everyone. I'm Diana Avila. I have been with Wise for nearly 11 years, and I look after our international expansion. I first, Sorry, one second. Hopefully, you can hear me better now. I heard about Wise before joining when I had moved from Colombia, where I'm originally from, to the U.K. to study a master's degree.
As many of us here today, I'm sure at some point I had the need to send money back to Colombia, to my country of origin, to pay for the student loan. I realized how expensive, how complicated, how slow, and how obscure it would have been to do this using traditional banking when I was doing my research.
Since then, I realized that Wise was building something unique, and I became obsessed with the idea of having these products and this solution available for more customers in more places. Today, in addition to taking Wise to more places, I get to use it as my everyday account. By far, my favorite feature is that I get to send money back to Colombia, and this gets instantly to my mom, for example.
It takes 20 seconds for me to send money from the U.K. to my mom in Colombia. This is powered by the infrastructure that we have been talking about, not only this transfer, but 75 of our transfers arriving instantly. To continue explaining this infrastructure, let me take another step back and go into the detail of how traditional correspondent banking works.
If there's someone, for example, in Australia that is trying to send a payment to the U.S. and they decide to use their bank, this one bank in Australia likely is not going to have a relationship with every single bank around the world. They probably have one correspondent relationship with a bank somewhere else in Singapore. This is how this long chain gets started.
The bank in Australia will send a message to their correspondent. Then every correspondent in the chain will be adding their own fee. They will be adding an FX spread and their own processes, making this payment probably last two to five days to arrive all the way to an account in the U.S. and would likely cost over 3%. We have dramatically improved this process through our infrastructure, through our licenses and our connections.
What happens is that for the past 20 years or so, most jurisdictions around the world have significantly improved how money moves domestically. If we see most jurisdictions today have instant payment systems that allow us to move money locally within seconds, free or a very low cost and very convenient.
Let's say in the U.S. now we have FedNow. What happens is that these payment systems work really well domestically. What we are doing at Wise is we're bringing these amazing domestic payment systems under our own network in order to move money internationally or move money cross-borders. This is the network that we create for the world's money. This is how we have made something complex now be way more simplified.
We have our own licenses. We have these connections to payment systems around the world so that we can control each of these payments end to end. We do this in many cases leveraging or connecting indirectly those domestic payment systems with our more than 90 domestic payment partners.
We hold commercial relationships directly with more than 90 banks around the world, and we also connect with them. What is even more exciting and unique is that in many cases, we don't work with domestic banks. We have a direct connection to the domestic payment system, controlling the whole transaction under our own network.
Let's say if someone is in Australia and they need to send money to the U.K., they will instruct the bank in Australia. Wise receives this instruction and this payment directly. We will do the same in the U.K. We will send this money and this payment directly to the recipient bank, everything happening under our own network.
We have achieved this level of direct connectivity and direct participation in eight jurisdictions already. This is huge. Back in 2018, Wise was the first non-bank financial institution to became a direct participant to the payment system in the U.K. Throughout the years, we have been adding more of those, and we are getting faster at building these direct connections. I believe what is really impressive is the scale at which we can do this across the world.
For example, last year, we completed this direct participation in Brazil and in Japan. We are talking about two completely different markets, we went live last year with those two. When we talk about direct connections and operating as direct participants in payment systems, this might sound simple or straightforward, but it is actually very difficult to build.
Let me take the latest connection as an example to explain what it takes to become a direct participant. As I said, last year, in November, we completed our connection to Zengin, the instant payment system in Japan. In order to do this, first of all, we have to obtain a license. In Japan, we got our first license 10 years ago, later on, we added another license. You already heard from Harsh that globally we have more than 80 licenses.
This enables us to operate in different jurisdictions and improve our product in these places, for example, allowing customers to hold more money in the Wise Account. Once we have this regulatory license, we need to get the approval to have the connection, to have the participation to the payment system. First, we started with one bank, then we added more banks.
Throughout the years, we were working with the payment scheme and with the central bank to become a direct participant and also to have our own settlement account with the Bank of Japan, their central bank. To build this connection, we need to deploy technology locally. This is a regulatory requirement, so we have built the relevant technology to have this connectivity. Of course, we need the local operations.
To maintain this license, to maintain and operate this connection, and to serve our customers locally based in Japan, but also customers that are globally based and want to have, operation and support in Japanese, we also run local operations because we're literally moving money and operating a system that is in Japanese.
This is the expertise that we have been building throughout the last 15 years that enable us to reach this level of connectivity to the payment systems. This starts with us engaging with regulators, with policymakers. Wise has now become an authority and well-recognized amongst policymakers to think about how to improve cross-border payments and enabling access to the payment systems domestically to non-banks that are focused on these cross-border money movement.
Once the regulation allows this, we also need to have the right type of license, and this is normally a multi-year process for Wise to obtain these regulatory licenses. When we think about connecting and participating directly into national payment systems, as you can imagine, the payment scheme, the central bank would be requiring the highest level of requirements because they need to preserve the safety and the stability of the money movement in this country.
We go through a lengthy approval process from a compliance, from an operational, from a technical resilience perspective. At Wise, we have been doing this for 15 years. We have developed this credibility, this ability, this knowledge that is well-recognized by regulators and payment systems around the world. To sum it up, the first enabler for us to go to different markets is having our regulatory licenses.
We have more than 80 of these around the world. Our portfolio of licenses continues to increase. In terms of connections, we're very proud that we already have eight direct connections around the world, and we expect to have more. What is very unique, because if you're a customer, you might not necessarily get excited that Wise is direct participant or not. What you see are the outcomes of this infrastructure and this connectivity.
Every time we have deployed a new direct connection, we see the clear outcomes with underlying costs significantly dropping, and this is how we are able to sustainably reduce price for our customers. We also see the dramatic increase in speed because we're connecting payment systems that already allow us to move money instantly, and this is how we achieve 75% of cross-border payments arriving in less than 20 seconds.
We also see contact rates significantly increasing because we don't have customers having to ask, "Where's my money?" Because the money would have already arrived where they need. With this, I'm gonna pass it on to Harsh again to wrap up how the four components of our infrastructure come together to create these competitive advantage.
Thank you, Diana. One of the things So Diana and I talk about infrastructure too much, I think people think. Just generally, our conversations are very fascinating to me about licensing and how tech combines together to run money around the world. Hopefully that gives you a quick run-through on each of our pillars and what makes this infrastructure unique and actually a very big competitive advantage for us.
I want you to take away that it's not just the technology, it's not just software, but it is actually the mix of how we build the tech, the operations, the licenses we own, and the connections in each of these countries, and the direct connections to payment systems all together that constitutes this infrastructure and the competitive advantage we have.
The other bit that Diana, when she showed those flags on the screen, one of the things that we should cover is we were the first in most of these countries to be able to get access to these payment systems as a non-bank. That is what adds credibility. When you're a regulator and you want to open up access for others, non-banks to your payment infrastructure, we are usually the first one they would call and ask for learnings.
What Diana talked through on direct connections is no small feat. Each of these domestic payment systems have highly complex rails, and they run on very unique and sometimes very obscure protocols, and they'll have APIs that are very different.
It's not just you take a wrapper or you take a published API and wrap it around and everything will start working. Each of these domestic payment systems have a very unique standard to maintain and a very unique integration to do. The fact that last year in itself we added two direct connections, hopefully that gives you a proof point on how flexible and extendable this infrastructure is that we've built.
We've built this infrastructure from the ground up such that it is very easy to integrate new payment types and technologies in a very easy way. Every time, of course, as a technologist, when I see new technologies coming out that could help us solve the problem of cross-border payments and really help our customers, we actively look at this.
As you can imagine, in the last 12 months, I've been asked quite a few times about our opinions on stablecoins. How will that impact cross-border payments? What I thought I'd do is take a few minutes to talk through an example of a USD stablecoin-based transaction, like how would that impact cross-border payments?
Having spent the last decade in this space, let me give you an example. When people talk about usage of stablecoins in cross-border payments, they're basically talking about two things from a customer experience. One, using USD stablecoins in this example to do cross-border money movement, and two, using stablecoins to manage currency volatility. Let's talk about the first.
If you were to use USD stablecoins for doing cross-border payments, we've learnt that the infrastructure we've built is by connecting local payment systems and direct payment, direct connections that we've built, is delivering a better price and speed than current stablecoin solutions can provide in this space. As we covered before, we charge 52 basis points on average, and this is actually the global average.
In some jurisdictions, if you were to move Swiss francs, like 1 million Swiss francs to GBP, we could get it as low as 20 basis points or even lower. In most players in this space using the stablecoin route or the stablecoin sandwich would charge anywhere between 100-200 basis points or more. Obviously, the question you should ask is why.
The key insight here is while moving value using stablecoin, USD stablecoin is easy from one person to the other. The real complexity arises when you actually have to on-ramp or off-ramp these stablecoins to different currencies. Remember, people and businesses want to use money in their local form.
They want to pay their taxes in, say, the U.K. or in Brazil. They want to buy properties, they want to pay for college tuition in their local currency. They can't pay for this in USD if this that is not the native currency. Eventually, if you on-ramp and off-ramp this is where the complexity lies. This is where the complexity lies around financial crime screening. The complexity lies around converting and the pricing you get. This is what determines how much you're being charged. Guess what?
These local payment systems that Diana Avila talked about, they're very, very large systems. They're moving trillions in the domestic economy, so they're already very efficient, hence the pricing is much cheaper. That said, that is the story today. We will continue to invest and see how this space evolves.
As it evolves, and if it does solve the problems for cross-border payments for our customers in some regions, some maybe globally, to make it cheaper and faster, we would of course use this technology. The key thing here I want you to take away as the infrastructure we've built is extendable, so as that it'd be easy to add this. The other use case we are seeing is some folks want to manage their local currency volatility.
If you take the example of Brazilian real, the Brazilian real has lost 15% against the USD in the last year. It makes sense that some people living in Brazil would want to hold non-Brazilian real as a hedge. For some of them, they might use stablecoins.
In a lot of these markets, there's already a very solid offering. It's a really good offering, and it's called the Wise Account. With the Wise Account, you can already hold 40 different currencies at a click of a button, and you can hold fiat USD, and you can get interest on that USD holdings. That's very powerful. Here we could add other asset types.
As Nilan said, we have added stocks, we've added money market funds. We will continue to build this infrastructure with the same way we've built this over the last 15 years. When our customers want new things to solve problems for them, we will add those things. This could be, in this example, a stablecoin offering. It's an asset type.
The infrastructure is extendable that allows you to continue to add new payment types because we've built this from the ground up in this way. 'Cause eventually what I see is if you take a longer view, looking forward 10 years from now, I will leave you with this. I see most roads in cross-border payments leading to the Wise infrastructure.
We have built something very unique with this infrastructure, which gives us a competitive advantage on cost and speed with the use of superior technology, and also how we connect directly to payment systems and the regulatory licensing footprint we have built. No other competitor has built this kind of infrastructure at such global scale. Given the head start we have, we will continue to invest in this over the next decade. It's not just our customers whose expectations are changing.
We are seeing expectations globally change from customers around what cross-border payments should look like. As I said before, 20-second cross-border payments did not exist about seven or eight years ago, and definitely did not exist before Wise was created. These expectations now are evolving even for our customers, for people who are not our customers, but they're customers of banks.
We are having financial institutions come to us and say, "How are you doing this magic? How are you doing 20-second cross-border payments? Our customers are asking for this." This is where our Wise Platform product comes in. Now let me introduce or let me bring back Nilan to talk through our fastest-growing product, which is Wise Platform.
Thanks, Harsh. Wise Platform is our fastest-growing product, and that's a reflection from what you've heard from Harsh and Diana Avila about how great our infrastructure is that underpins our products and our growth. Let me tell you how. The growth we see is customers leaving their incumbent providers, their banks, to come to Wise. This churn that banks are seeing shows them explicitly how valuable the infrastructure we've built is, and it's so valuable they want to use it themselves.
Wise Platform enables them to do that. Banks are partnering with us because their customers are demanding just what we provide our own customers. We've reset the expectations of consumers and businesses from what they want from payments. They want low-cost payments. They want convenient payments. They want it fast.
The infrastructure we've built not only gives that to them, but it also solves the pain points that banks have in moving and managing money internationally. Cross-border payments are really inefficient, have really inefficient back office operations. They're really hard to do. Providers have poor visibility of where is the money. It's really slow, and it's a really manual process. What this results in is customers churning away from their providers and turns into a customer growth challenge.
While some customers do leave their bank, we think it's unrealistic for everybody in the world to download our app. There is inertia in banking relationships, but through Wise Platform, we can reach more and more of these individuals and businesses. Fundamentally, we believe the most convenient experience for moving money internationally is within your bank or the apps you use every day, and Wise Platform enables that to happen.
Wise Platform is a global business. We have go-to-market teams around the world, and we break the market into three. Neobanks, such as Monzo and Nubank. These are tech-savvy companies that know about Wise and can integrate us fairly quickly. Tech companies such as Ramp and Brex. These are complex integrations with non-regulated institutions that are normally unlicensed.
Finally, we have relationships with tier one banks. These are some of the largest banks in the world, and this is where around 90% of the world's money moves through today. It's early days with these banks, but these are banks such as Standard Chartered in Asia-Pacific, UniCredit in Europe, Itaú in South America, and Morgan Stanley here in North America. These are multi-year relationships and multi-year journeys. We usually start with an initial launch with a subset of customers on a subset of currencies.
As we prove the model, we'll expand to more corridors and more customer segments and product types. Over time, we may add more of Wise products to the relationship. Wise Platform, as our third product, is what gives us a path to moving trillions. As we onboard more and more of the world's banks and products, it enables us to get greater leverage of the infrastructure that we've built. Now I'm going to hand over to Emmanuel, who's going to discuss how this growth is not only profitable, it's sustainable too. Over to you.
Thanks, Nilan Peiris, good morning, everyone. Warm welcome also from me, from N.Y. I am Emmanuel. I am the CFO of Wise, I am not only the CFO. I also become a very Wise everyday customer since I moved to London two years ago. I have to move this one. I moved to London, I am becoming a Wise user.
While benefiting from their services that we are offering, Wise is also allowing us to enjoy the quality of our UX by when I get my salary paid on my Wise Account, when I use the Wise card every day, and also by keeping my money growing with Wise Assets. Since I am traveling also frequently, I am using my Wise Account when I go back to France, whenever I go back to Germany, and also when I am traveling to the U.S. lately.
Obviously you have heard from Kristo, but also from Nilan Peiris and Harsh and Diana Avila, we are building infrastructure and products that give great value to our customers, allowing them to grow and also to create substantial value for both our customers and you, our owners, over time.
Wise has delivering amazing financial performance. We have a track record of delivering sustainable growth at attractive returns, and we've been profitable every year for the last decade. Since Wise was founded, we continuously delivered volume growth as we tackle the massive opportunity ahead of us. Over the past 10 years, not only that we have been profitable, but we've also grown our cross-border volume over 30 times.
Since we set our own margins based on our unit cost, we are in control of our own destiny. 2026 hasn't been an exception. As you will have seen from the press release yesterday, we continue to drive active customers volumes and its growth whilst targeting the top end of our target margin range.
During our last fiscal years, around 19 million active customers transferred over $240 billion. Guess what? They also increased their holdings by 40% to up to nearly $40 billion. Today, I want to take a step back and take you through our financial profile, focusing on three main items of our P&L.
Well, the first one would be our net revenue and answering the questions on how we generate revenue from customers' activities, including our approach on their interest framework or their interest income. Second, operating expenses, explaining how we invest part of our margin back to supporting our existing customers, but also into driving our growth.
Lastly, our income before tax or margin framework. Let's start with our top-line metric and the net revenue. As you have heard from Nilan, our net revenue is a combination of revenue generated by, as a result of our customers' activities, but also the interest on customer deposits.
Looking at 2026, our total revenue was $2.5 billion, of which $1.9 billion or 76% was related to our customer transactions, and roughly GBP 600 million of net interest income. This revenue is driven by customers using our products for international needs.
Also, as you have heard from my colleagues before, they are also using Wise to manage their everyday finance, just like me. I take you through now each component of our net revenue. Let's zoom in and start with the first component of the cross-border revenue from customers sending and receiving money internationally. Cross-border is at the core of what we do, supported by our best-in-class infrastructure.
As I mentioned earlier, in 2026, we had nearly 90 million active customers using Wise for cross-border transactions, generating over $240 billion of cross-border volume. We monetize these customer activities by charging a low, transparent fee to our customer. In 2026, this was an average 52 basis points, generating GBP 1.3 billion of cross-border revenue.
We are able to offer these low fees by being focused on our unit cost with strong cost discipline, but also by driving efficiencies. We seek to sustainably reduce our price when maintaining a cost-plus margin framework and sharing part of our excess margins with our customers. We do this mindfully, but also actively. We only reduce our price when we have achieved sustainable reduction of our cost.
We finished the year with a take rate at 51 basis points, and this is a drop of around 20% if you compare this to Q1 2025. These price adjustments are strategic, and we see the clear benefits from it. For the first one, price is very important for our customers, both personal and businesses, and even more relevant for our customers moving high volumes.
Our cost-plus margin logic ensures sustainability of our price reductions. As such, we can maintain a price advantage, and we've been the driver of the industry in this. Finally, our platform partners, they appreciate the benefit of partnering with us because we are focused on driving continued efficiency.
As you have heard today, as we have been more products of customer love, we have seen increased adoption of a Wise Account. There's a great example of these customers using a Wise card while spending money both at home but also when they're traveling, just as mentioned before. In 2026, customers spent over $40 billion with a Wise card, sorry. This is an increase of 37% compared to last year.
We monetize also this activity through interchange and other card-related fees. Sorry. Customers are using Wise more as an everyday account, just like me, leveraging other products to manage their money or making it grow. In March, from the total customer holding of nearly $ 40 billion, our customers held $9 billion on Wise assets.
We get a revenue from fee related to domestic currency transactions and the use of other products such as Wise Assets. In total, these transactions related to customer activities generate $1.9 billion in transaction revenue in 2026, an increase of 22% year-on-year. This include our price adjustments. That's not all. Our customers are trusting Wise more and keeping more money in their Wise Account.
At the end of 2026, customers held $30 billion on their Wise Account. We invest these funds in liquid instruments and generate interest income from the balances. When we invest our customer balance, we follow our interest income framework. On the left-hand side, you can see the components of this framework.
Under this, we would seek to use the first 1% yield to cover the cost of the Wise Account, and also to retain 20% above this first 1% yield as a profit, and to redistribute 80% back to the customers.
We build this framework to avoid cyclical movements of the interest rates set by the central banks, just like the Fed, and what's making this account interesting for customers. On the right-hand side, you can see how it played out in 2026. We generate $800 million of interest income, and we're able to pay around $200 million back to the customers. Roughly half of their 80% target.
This is obviously below our target due to certain geographical restrictions, like in the U.K. as of today, where as of today we're not able to pay interest on a customer balance. Overall, I took you through the different layers of our customer activities, sending and converting money, spending with our Wise card, and also growing with Wise Assets, and holding balance with us.
These drive our net revenue generation. Again, in 2026, we deliver $2.5 billion in net revenue. As you just saw, the growth is also creating a diversified business. As customers adopt more of our product, this is or has reduced our mix of cross-border revenue. In 2026, this was around 50% of our net revenue.
We also have a diversified geographical footprint as we have launched new countries, but also grow and roll out products in countries where we already have a presence before. If you were to look at this from the volume perspective, it will be even more balanced since we are generating more net income in the U.K. due to the regulation I just mentioned before.
As you have heard today, we still have a massive opportunity ahead. One reason we are so excited about the listing here in the U.S. is that we see the U.S. market as the bigger single market opportunity for our products, presenting a very attractive potential for growth.
I'd like now to cover the second part or the second item of our P&L and our operating expenses, and now how we invest in our business, in a different area my colleague covered before. Ensuring that we are invest to build the best infrastructure, but also acquiring and onboarding more and more customers an attractive return.
Through our operating expense, we invest to maintain and service our current customers through transaction and expense and services. We also invest to drive future growth through tech and development, but also marketing. We invest into having the right support functions. Our transaction expense and transactions, and also credit loss, reflects the cost of providing our services and correspond to roughly 20% of our net revenue.
This include things like the banking and partner fees, where we work with domestic bank and other partners to provide our services to customers. For example, to access the domestic payment systems where we not have access yet. Like banks and partner fees are the largest component of the transaction expenses.
These also include FX-related cost and other product costs. We are continuously seeking efficiency in this area, making sure we get the best terms from our partners as we grow in scale, while also becoming more efficient in how we deliver our products to our customers. As an example, today, transaction cost for Wise for transferring $10,000 from the U.K. to the U.S. is only 2 basis point.
Our service expenses relate to onboarding but also providing the great services to our growing customer base. Services and servicing corresponds roughly today to around 15% of our net revenue. Harsh already covered our progress in the adoption of technology and automation. We're also investing in offering the best onboarding experience to our customers while complying with their regulatory requirements around the globe.
With around one-third of our employees in functions related to compliance, we invest in developing robust process to drive customer trust. This is particularly important to some customer groups, such as business customers and individuals sending high transactions. For this, we have launched a tailored service product, and we call it Total Service.
This is built on the great customer experience, and also that their infrastructure are providing, having a tailored approach to serve our top customers. Technology and development reflect the investments that we do into building our new products and as well as maintaining our existing products. This correspond around 15% of our net revenue.
As you also heard from Harsh today, we're investing significantly in our technology. With over 1,000 engineers, launching 6,000 monthly developments, we will continue investing to grow and to improve our customer experience. Now, marketing and sales reflect our investments into building the Wise brand and also growing our customer base. Per 2026, this have been around 5% of our net revenue.
We have been investing to scale our highly effective digital marketing to date, but also we have been target a minimum return of 20% as a minimum return on investments. We also have been extending our marketing mix to new channel, specifically offline, like TV and also billboards, as you might have seen, with the aim to reaching our target audience where they are. Very impressively, today still 70% of our customers come from word of mouth.
Here I wanted to show you some examples that you've probably seen on the street, how we bring this to the U.S., with a campaign that we launched this week actually. These increased investments in marketing are important and sustainable for us because our customers stay with us for many years.
Every year, we are adding new and stronger cohorts, which give us the confidence that we can continue to lean into our marketing investments. Finally, general and admin expense reflect the support structure that we have set up to power our growth. Today, this is around 15% of our net revenue.
This include our corporate functions, so it's like finance and legal, but also the team that are helping us to build unique elements of our infrastructure, as well as offices and as well as our external services providers. We're investing back into the business. The operating expense I just talked you through, bring income before tax to around 25% of net income. We are able to deliver this at a very high cash flow generation.
We believe that in driving growth through continuous investments, our investments framework is a clear evidence of this. By targeting medium targets 15%-20% income before tax margins, considering that we were able to pay our target interest income back to customers that I mentioned before, we are able to invest in our growth.
This, in exchange, drive more scale and operational efficiencies, providing us with additional margin capacities to reinvest. This is truly a virtuous cycle. We reflect this in our financial targets. In the midterm, we seek to deliver 15%-20% net revenue CAGR, and also a 15%-20% EBIT margin, again, if we were to pay the 80% of interest above the 1% yield I mentioned before to our customers.
Here you can see how top-line growth combined with a stable margin drive incremental profit dollars. This framework is expected to drive future value, driving incremental net revenue and income before tax over time. Our business strategy aims to deliver strong, profitable growth so that we can generate strong cash flows. Our capital allocation framework has two main components.
The first one, on a strong level of cash. We maintain a strong capital and cash position to ensure resilience, but also flexibility, as well for our current licenses, but also for the future one. Secondly, on return of capital. We are focusing on returning capital to shareholders, and we expect to provide an update on this approach as at our full year results in June this year.
Our strategy help us to expand our moat. By driving scale, we are able to create excess margin capacities to fuel our investments. These investments allow us to continuously stay ahead of the industry, as we continue to build a unique global infrastructure, which also support our focus on driving down the unit cost and sharing this benefit with customers, maintaining our price advantage.
This drive our more new customers and customer engagement, as we continue to fuel our growth and scale. At the end, we have huge ambitions, and we believe that in long term, it will be the player with the best infrastructure and the lowest price that will win in the industry. Now I hand back to Kristo for the final words. Don't move yet.
Thanks, Emmanuel, thank you all for staying with us. We had lots to talk about. As proud as we are about what we've achieved so far, we're really only just getting started. I will show you this slide again because this is an enormous market.
We're growing really quickly, but we still have nearly the entire road ahead of us. We ask ourselves, "Why haven't 95% of people and 99% of business owners gotten smart? Why can't they use Wise?" Every day, we wake up with my team to methodically solve for these opportunities. We do it. We do it by building products that people and businesses love and recommend.
We build the plumbing, how they can access that, how can we move money around the world, and we do this financially sustainably. This is how we make Wise an increasingly valuable company for customers and for owners for decades to come. Thank you for being with us. Onwards.
Back to you..
If you'd like to take your seats up on the stage, then we're more than happy to take a few questions. We'll start in the room, and then if there are questions on the Zoom webinar, then we'll jump across to that as well.
If you'd like to ask a question, please do raise your hand, and we'll get a mic to you. Introduce yourselves and the company that you represent. Ask your question, hand back the mic so we can get it to the next person. Anyone like to go first? We'll start with Sanjay in the middle here, please. Thanks.
Thank you. Sanjay Sakhrani from KBW. How are you? Thank you for the presentation. I was just wondering product roadmap. You know, obviously, you guys take in deposits of sort. You operate an asset-light model. Curious if you guys have thought about extending that into lending to your customers, for example, or other types of asset heavy models.
Just curious if there's anything there. Maybe, if we just think about competition, right? Understanding that the system is quite inefficient today, a lot of the incumbents are thinking about modernizing it. If you have, like, the networks, for example, Visa and Mastercard are working with banks to figure out how to move money quicker. You talk about stablecoins but maybe tokenized deposits are part of the future as well that can link fiat together.
I'm just curious if we could just talk about those competitive dynamics as well. Thanks.
Thank you, Sanjay. I mean, Nilan's the boss of our product roadmap, but I'll sneak this one away. That's a very good question. We do have a lot of customers hold money with us, and this is growing really fast. But they don't really come to us for borrowing.
It usually doesn't get very high up on our roadmap. It's there, so I'm sure we will have customers who occasionally to borrow. But I doubt that we'll be doing this from our balance sheet in the near term. So mostly people come to Wise to either save money or to make money, but rarely so to borrow money.
Coming to the other one, I wonder if, Harsh, you have a comment. I guess this is partly a Wise Platform question on whether our banks as our customers, gonna need more than just payments. I don't know, maybe it's you.
Yeah.
Yeah. I can start, and Harsh-
Yeah
I understood the question, I can answer it from a platform perspective. From a competitive dynamic, how do we see competition in this space? How are banks evolving their infrastructure, what challenges do we see? I think our infrastructure is quite differentiated, as you've heard from Diana Avila and Harsh.
These eight direct integrations that we have enable us to move and settle the money instantly. When you look at that versus the alternatives provided by alternative providers in the market, there isn't really anything else that enables payments to move instantly at such low cost with a really high quality as well. We continue to see demand in the market for Wise Platform as a result. Harsh, maybe you wanna talk about future technology.
One thing I'll add to what Nilan said, sometimes people don't realize, like, by building a consumer and SMB product, as I said before, operations, like, you know, things do get stuck sometimes across border payments. We've learned over the last 15 years how to run this network.
If you're just a B2B provider selling to banks, you've never run your own payments. You don't know when somebody calls you and says, "Where's my money? What happened to this transaction?" How to operate that and make that very efficient. Neither do the banks, because if you're Bank of America, you're only operating in the U.S., and you don't know how to run cross-border payments. You're just using your correspondents, right?
That learning of those 15 years is baked into how do we operate this infrastructure, and that's what leads to 52 basis points of lower pricing. You know, that efficiency is also what banks come to us for. They've learned that, you know, they can't operate this payment the same way as you can operate a domestic payment. On the future, yeah, I mean, I think, as I said, like, there's a lot of players who are talking about a lot of things.
The one thing I would go back to is, for example, in the U.S. or in the U.K., FPS is the faster payment scheme in the U.K. It runs all payments in the U.K., right? Pretty much. Instantly, it's got massive limits. People are getting paid their salary, and even ACH moves $60 trillion.
It's the most well-oiled machine, right? The government Social Security payments go through that. This could take a long time for a new infrastructure to come up and say it's gonna be more efficient and more scaled out and more secure than these, right?
That's the thesis, and that's why we are seeing the benefits of that, where by connecting directly to these payment systems, we automatically see the outcomes that Diana co-covered of, like, nine, like, you know, massive price drops and amazing experiences. We'll see how this evolves, and as I said, our infrastructure is pretty extendable, so we can add these, connections. I think for the foreseeable future, the domestic payment systems are very well set up for this.
Thanks, Harsh.
Thank you. Gus. Next one.
Hey. Gus Gala from Monness, Crespi, Hardt. The main question I just wanted to dig into, can you talk about the delta in the contribution margin between the platform business side and core consumer? It just feels there's a lot less, I don't know, surface area for intervention. There's less need for dollars to go into marketing to generate demand there than perhaps the core side. Just help us think of the delta there.
The other one, just going to Sanjay's question on the fast payment systems opportunity there. Can you help us think maybe there are geos where it makes sense to be on the front leading edge of helping build out a technology or work on a new platform where perhaps there isn't a fast payment system?
In the U.S. specifically, can you kinda talk about what the cost opportunity is from being more domiciled here in the sense of getting access to different rails, right? That's it from me.
I'm gonna snatch some of the easy ones again. I loved your question about Wise Platform and our consumer business, and we were very deliberate about this when we, when we set the Wise Platform up, is that they're financially equivalent to us. Economically, we don't have a difference on our economics, whether a customer comes through our bank client and makes a transaction or comes directly. That's an underlying principle that's also very helpful then because we don't have parts of Wise fighting it with each other on, like, who gets the transaction, who gets the customer.
It's very clear to our partners as well, is look, your customer can come to us on the same economic terms, so if you like, it's up to you what you're going to charge them. It lets us also very logically to compete with our clients because we do naturally compete with our clients as well. Leaving the other questions which were more on, I think maybe to Diana on how the, like, other developed economies that are struggling to get to the instant payment, like domestic Pix or instant domestic payments.
Yep, I can answer that. What we see is that in general, both developed and developing economies, all of them are introducing instant payment systems. What is very unique about Wise is the level of local expertise that we have and also how we are participating in the early-stage conversations of how to develop and how to set up these payment systems.
Let's say in Brazil, Pix was introduced only four or five years ago, and we have been in the conversation from early days to the point that we are now directly connected. In the U.K., the U.K. was one of the first economies to introduce an instant payment system, and right now we're having conversations over how to modernize and how to get this payment system ready for the future.
Wise is one of the participants of this dialogue and this planning on how to introduce domestic instant payment rails for the future. To answer your question, we see this trend happening around the world, and Wise is part of these conversations. In the U.S., for instance, FedNow is probably the one of the newest instant payment systems that we see have been introduced around the world.
In the U.S., we work still with bank partners, and through them, we are able to access the different payment rails that we have in the U.S., ACH, wires, RTP, and more recently, FedNow, which is picking up and increasing the level of adoption.
I don't know, Martin, if there was a third question.
It was around the U.S., domiciled in the U.S.
I think that's all.
Yes, I can continue.
Yeah.
In the U.S. I can keep answering. In the U.S., we have been operating for more than 10 years with our 49 money transmitter licenses, so we are very well domiciled. We have also our local teams. In Austin, we have one of our biggest hubs, and we continue increasing our license portfolio and our direct relationship with local regulators and payment schemes. Right now, we have been operating as a locally domiciled money transmitter with our connections through local banks.
Okay. Thank you. Alex, over there. Thanks.
Hi. Thank you, guys. Alex Rohrer with Emmett. Just wondering, I'm sorry. I lost my train of thought. The, the guidance, right? The, I'm sorry. Here it is. The, in the old world, the guidance of 13%-16% underlying income Sorry, PBT margin on underlying income versus the new guidance of 20%-25% or 15%-20%, depending on the regulatory backdrop.
You know, it's obviously wider now. It used to be 300 basis points wide, and now it's 500 basis points wide. I believe you're holding interest rates constant in this new guidance, right? There's no volatility there. I'm just wondering where the sort of What's slightly less forecastable in the new guidance methodology? Why is the range wider than the 300 basis points before?
That's for Eric. This is one for me, I guess. The margin of 20-25 is reflecting how much we can pass back to the customers. I mentioned before we have some geographical restrictions, like in the U.K., so that's reflecting basically the net revenue increase that we, from the interest that we can't pass back to the customers as we did before.
Before, our underlying income was only reflecting the first 1% yield, and that's why also the guidance of 13%-16% underlying logic was reflecting this. In the future, we have the 20% profit that I mentioned and also, like, what we can't pass to the customers. That's the difference.
I think I maybe I asked my question in a confusing way. The question is why is the new range 500 basis points wide whereas the old range was 300 basis points wide?
To reflect basically how much we will best pass back to the customers in the future. If you assume that at some point in the U.K., we can pass back all the interest to the customers, then we will have a lower margin. That's reflecting this, the movement, the amplitude.
I thought you have a new range. You are passing back the money. There is the new range of the new 15-20.
Yes, there's a 20% that is including this, then the 20%-25% are reflecting the interest again that is not that we assume that we'll pass back to the customers at some point.
Thank you.
We prepare a website, extra website for this. Happy to follow up if you have any further question on that.
Over to Chris. Next one.
Great. Cristopher Kennedy from William Blair. Thanks for all the information. Can you just talk about the journey in the business initiative? You've talked about kind of how your product set has evolved. Today it's mostly micro-businesses and you want to go up market. What do you need to capture that opportunity?
Thank you, Chris. That's a perfect one for Nilan Peiris, how the business market has been growing.
That's a great question. Thanks for it. The roadmap that I covered really, and those areas that we invest in is what will enable larger and larger businesses to use us. When we talk to larger businesses, the barriers to using Wise is being able to set up multiple users within the product, which we're now live with, enabling to give them permissions on different aspects of using the account, creating workflows within Wise for creating invoices and invoices getting paid.
And then a lot of complexity around integrating into their accounting systems. Businesses want to be able to take a picture of an invoice and then maybe assign it to a cost center that's from an account, pulled from their accounting system, and that getting synced automatically.
Similarly with an invoice coming in, being able to align that with their accounting system so that the Wise product becomes very tightly integrated with their accounts. That is probably the single biggest driver behind it. Sorry, biggest area we'll need to invest in in order for larger businesses to use us.
From a core product perspective, large businesses are using us today for large payments and beginning to use us for holding money. To use us more and more every day and to move more of their payments to us, these are the types of areas we need to invest in.
Thank you. Alex, down here. Thanks, Casey.
Thank you. Alex Markgraff, KeyBanc Capital Markets. I had a question on Wise Platform. Just with respect to traditional banks and neobanks, how you think about prioritizing direct versus indirect relationships with customers. I think understanding the economic equivalence on the transfer side, there are other sort of product opportunities in consumer. Just thinking about owning that relationship directly versus indirectly on the consumer side as it relates to scaling Wise Platform.
I can try on this one.
Yeah.
I think Chris had laid out the economics really of how we price and think about from a cost and margin perspective, a transaction coming from platform versus a transaction coming from the retail business. I'll take your question as like, why should we invest on the platform side? Why should we invest on the direct side?
I touched on this piece. When we integrate a platform partner, some of those partners' transactions were already coming to Wise, but there was a large chunk of those transactions which weren't coming to Wise. These are generally customers that have infrequent use cases and maybe lower value transactions, and so wouldn't get over the inertia of downloading Wise. There is economic value in doing the integration in order for this to happen.
It's a win-win for the partner because what happens is when we go live with a partnership with Wise, their customers no longer need to use the Wise app. Those transactions, especially if they economically are the same for us, can just transition back into that partner's interface and deliver a much more convenient experience.
Casey, over to the back there. Is that Mark?
Yeah.
Yes.
Hi. Good morning. It's David Scharf at Citizens Capital Markets. Wanted to follow up on the competition question. I mean, at a high level it seems like at the end of the day, the biggest differentiation for Wise is you bypass correspondent banks and became a non-bank member of individual payment networks.
Can you speak specifically to first, just what are some of the hurdles and challenges for a non-bank to get accepted to a local payment network like ACH, Bacs, Zengin? Secondly, since these payment networks, by admitting you, have sort of set the precedent for admitting a non-bank, you know, are you aware of any kind of backlog of other remittance providers sort of seeking to, ultimately embark on the same kind of integration?
It's a fantastic question. I feel like we've covered the first part quite a lot. Diana did on what are the complexities involved through licenses and et cetera. I think the second question is very fair given that, you know, we were trailblazing through the first eight.
Surely there will be people behind us who try to do the same. I think one thing to appreciate though is that in order to build up this network, it's kind of not worthwhile doing just two. You kind of need to invest behind doing the 30 or the 40 or the 50. No one has seriously started yet, so it's hard for me to comment how far behind they will be.
It's an enormous investment of.
Time, effort, and the kind of expertise that you need to build up.
Yep
was covering.
Yep. Worth covering again that even though the regulation can change to enable non-bank financial institutions in order to become direct participants, this also comes with really high requirements around, first of all, we will still require the right type of license to access this payment system.
As I was sharing, we go through a lengthy process of approval from the payment scheme, from the central bank that would look into the compliance framework, operational framework, technical resilience. It means, yes, it opens up for the to enable more competition, not only on cross-border, but in general to move payments domestically with other competitors coming and joining the payment system, all of them with these high requirements.
As Kristo was explaining, what makes our network for the world's money is our ability to deploy this level of connection, not only in one or two places, but to do this sustainably and at scale across the world.
Thanks.
Thank you. How many more questions have we got in the room? If you could just raise your hand. Okay, it looks like we have two more. Take two more from the room, and then we'll jump over to Zoom. If you could just start with the lady here, then we'll go to James. Thanks.
Hi. Sahar Shirazi, Valar Ventures. In the summer of 2025, you guys applied for your non-depository trust license in the U.S. I'm wondering, is that an end game here, or are you using that as a stepping stone to get a full bank charter? Do you think that offers any sort of competitive advantage in the U.S., especially now given the openness of the administration to give out new bank charters?
That's a great question for our expansions team.
Yep. That's a great question. Thank you. You're right. We applied for this license, and as we were saying, we already have more than 80 licenses around the world. This means that our portfolio of licenses keeps on expanding and growing throughout the years.
In particular with these, national trust license, as I was saying, in the U.S., we already have our money transmitter licenses, and as you heard from Nilan our different products are fully live in the U.S. for our customers. These new license, we expect to deepen our level of connectivity to the payment systems in the U.S. That's the main drive.
Over to James. Thank you.
Hello. James Zimmerman at Long Walk. When you're running a business, you're always running a series of experiments and, you know, in the last couple of years, you appear to have run two quite big experiments. one was a significant reduction in the take rate, which seems to have stimulated good volume growth. Curious, A, your reflections on that sort of very pronounced 20% reduction in the take rate and how that informs future thinking on take rate reductions for cross-border payments.
Also if there was a particular sort of stimulant that or breakthrough that allowed you to make that very big reduction in the take rate that may or may not happen again. Then the 2nd question relates to sort of pronounced increase in OpEx spend in the last sort of year and a half.
Areas where you've been pleasantly surprised by increased investment in marketing or service or any aspect of OpEx, and areas where you've just not seen the returns that you may have expected.
Between Emmanuel and I'll start.
Yeah
I'll get to cover most of it. In terms of our pricing or take rates, I think we'd rather have all of these moves or economics move more gradually than big jumps. I think one thing that I don't know if it was ever part of an experiment to be such a deep, a sudden cut and then I think that doesn't help anyone if that happens too fast or too big jumps. I expect in the future you'll see a more gradual kind of tightening of the competitive moats, if you like. Making it harder for anyone else to compete.
Then in the other question of, I think where are we spending, we see we would never spend if we don't see an amazing return. All the spend that we've made over the last 15 years has delivered amazingly. And these decisions are happening at a micro level, really. It's very We're quite famous for not doing any pivots.
It's not a lot of features or products that we've turned off or big bets that we've pulled back. And that's because I think our optimization happens at a kind of much smaller levels of investments. Our teams kind of recombine and can move on to different projects all the time.
I see that as a kind of more natural way of running the business.
Well, I can just say like, you know, the take rates follow a logic of cost-plus, as I explained before. Basically, we're tracking the cost very detailed. We look at this on a monthly basis. Once we decide to reduce the take rate, we have a very good comfort that we can still generate the same margin as we mentioned before, where we're agnostic.
We want this to generate the same margin, contribution margin if you are a private customer, a business, or a platform customer. For that, we need to have a very detailed cost structure. When we decrease the take rate, we already know that we have this efficiency gain and not the other way. That's why, you know, I mentioned strategically and mindfully because we do this on a regular basis.
We check is this efficiency gain sustainable or is it one-off? Once we when we have this clarity, then we continue to decrease the take rate.
We do this because this is building our moat. I mean, like, you know, the infrastructure, all the licenses that we're building combine with the take rate that is reducing because we pass the efficiency partly to the customers, make it very, very hard for other players to come in this and try to build the same, the same offering that Wise have built out over the last 15 years. I think that's why this component is very important as a combination of the investments we do in the technology and the operations and so on and so forth.
Thank you. We're going over to the Zoom webinar now, and Justin Forsythe from UBS.
Awesome. Sounds like you can hear me. Thanks again. This is Justin Forsythe of UBS. Oh, that sounds very bad. Is it better now? Okay, great. Thank you so much for the questions here. I wanted to ask on Wise Platform and thank you team for Oh, man, that is brutal. I don't think that's me, but I'll just keep talking.
Thank you for Wise Connect a few weeks back in London. I think that was a great presentation. I guess this one to start is for either Kristo or Nilan. It seems like you're having a great amount of success in winning the retail banking operations of financial institution Platform customers. I'm thinking Standard Chartered, Raiffeisen, UniCredit, Capitec, Itaú, et cetera.
Are there examples where you've had success in the corporate and commercial banking operations as well, or is Wise Platform just simply better suited for the retail bank? Emmanuel, still on platforms, it seems to me like we might hit that 10% medium-term target, for mix of Platform TPV this year. If we do so, that would be less than two years.
The initial target for the medium term, I think, was about three-five years, so to hit that 10%. What is the output of this? Would you then shift the guidance? I'm also thinking about costs there. If you're exceeding this target kind of ahead of time, does that mean there's potential to exceed either your revenue and/or the cost side?
On the cost side, I mean, a lot of your costs are fixed. I think, what, 65% of your costs are fixed. If you're then exceeding on the top line, I would think that would drop through to bottom line as well.
Let me repeat the questions. I think the first one was, we seem to make a lot of progress with retail banks. Question around what's the corporate banking pipeline in terms of Wise Platform. For Emmanuel, we expected the Wise Platform-
Yep
income to grow.
Yep
revenues to grow quickly. What's your update on this?
Yeah.
On the Wise Platform side, indeed, we see a lot of traction on the retail banking side, and that's through the dynamic that I talked through earlier around those customers of the retail banks adopting Wise and then that driving banks to come talk to us. Like, you can kind of think through from a corporate perspective, we don't as yet have a high degree of adoption among corporates, so the demand from the corporate banking side is less.
That said, we have, you can imagine when you look at our Wise Platform partners, they generally all have retail banking arms, which is where they start, and they all have corporate banking arms. These are all ongoing conversations that we have with our partners.
In terms of for, you know, the guidance that we gave at Owners' Day, I think, you know, we're very pleased to welcome Capitec. I mean, like, this is the first bank in Africa that we signed, It's the number one bank in South Africa. We're on track with what we mentioned before.
You mentioned, like, you know, what would be the impact on the financials. It will also here we apply the same cost-plus margin logic, that basically we will be able to operate at the lower take rate for the platforms to make sure that we get even more customers or more partners in the future.
On the terms of margin midterm, we will continue to use the same cost-plus margin logic so that we can attract more and more banks, and it will become even more difficult to compete with us.
Great. Well, thank you. Thank you very much. There we go. The mic's working. Thank you very much to our presenters today. Thank you very much to everybody for joining us via the webcast and here in the room as well.
A replay of today's presentation will soon be available on the Owner Relations website, so please head there if you'd like to rewatch any parts today. For those of you who are in the room with us, we are serving refreshments upstairs, a couple of floors up, either by the lift or the stairs. Please do stay and join us for those. Thank you very much, everybody. Thanks very much.