Each year, consumers the world over move ~£2tn across borders, with roughly 2/3s of that funneled through a labyrinthine network of banks. A typical cross-border bank transaction might look something like this: Amber, a US resident with a checking account at PNC, places an order to send Rupees to her mother’s account at Seylan Bank in Sri Lanka. After ensuring there are sufficient funds in Amber’s account and running proper KYC checks, PNC directs that order to SWIFT, a communications protocol connecting more than 11k financial institutions. The PNC-originated order is routed to a US correspondent bank like Citi, which then passes it an Indian correspondent like HDFC Bank, ultimately reaching its final destination via HDFC’s direct connection with Seylan Bank in Sri Lanka.
Great write-up. Looking forward to reading the part 2. I agree that Wise has a massive regulatory advantage over other fintechs if they were to try to replicate their approach. Visa and Mastercard have bigger scale and reach, though. Isn’t a product like Visa Direct a direct competition for Wise Platform and indirect competition for Wise D2C product (of course banks adopting Visa Direct could still have inferior UX to Wise)?
What % of transactions are internalized?
Internalized by being either:
1. Netted off or
2. (Looking forward) Both send and receive are connected to the Wise Platform…
Data isn’t disclosed, but conceptually, its an interesting thought process.
I am not sure people understand the network effects that are (slowly) being built here.
Great write-up. Looking forward to reading the part 2. I agree that Wise has a massive regulatory advantage over other fintechs if they were to try to replicate their approach. Visa and Mastercard have bigger scale and reach, though. Isn’t a product like Visa Direct a direct competition for Wise Platform and indirect competition for Wise D2C product (of course banks adopting Visa Direct could still have inferior UX to Wise)?