How Does Wise Make Money? Business Model of Wise

How Does Wise Make Money

Wise is a fintech company focused on money transfers and currency trading. The company makes money primarily through fees on the platform’s cross-currency money transfers. But Wise has also branched out to other sources of revenue.

Wise primarily makes money via transaction fees on cross-currency money transfers. Wise also makes money on services like business and consumer accounts and licensing their technology to banks.

Founded in 2010 by Taavet Hinkirus and Kristo Kaarmann, the company is based in the UK. They started Wise because they were Estonians based in London and found that transferring money between their UK and European accounts was unnecessarily costly.

Wise was formerly called TransferWise but changed its name in 2021.[1] The company went public in July 2021 and trades on the London Stock Exchange.[2]

What is Wise & How Does It Work?

Wise is a money transfer and currency exchange service that set out to save consumers and businesses money on currency exchanges and transfer fees.

When sending money internationally, many traditional financial services companies, money exchange services, or fintech companies charge a significant amount in fees to make the transfer while also providing unfavorable exchange rates.

For example, international wire transfers can cost well over $10 each and sometimes much more. Want to transfer money with PayPal? When exchanging money between currencies, PayPal typically uses an exchange rate that is much less favorable than the current exchange rate.

Sending money using these common methods would result in losing money on fees and rates in comparison to Wise’s service. If you transfer money frequently, that adds up.

Wise instead charges a flat upfront fee and guarantees the exchange rate quoted for two days, so that the transfer will go through at the represented amount. There are no hidden or surprise fees.

When transferring money internationally, the customer sends the money to Wise’s bank account in their country. Wise then uses money already in their account in that country to transfer the money into the end recipient’s bank account.

That means that money often doesn’t cross borders in a transfer which means that Wise only has to pay in-country transfer fees. Wise passes those savings on to the user.

Wise also allows companies and businesses to create bank accounts and licenses their technology to other banks or fintech companies who want to use it.

With individual Wise bank accounts, users can hold multiple currencies, make international money transfers, and use a debit card associated with that account. It allows people who travel frequently or receive money in multiple currencies to do so in the cheapest and easiest way possible.

Wise accounts are only available in certain countries. Eligible countries include Australia, Canada, the UK, the Us, Singapore, Hungary, Poland, Turkey, and New Zealand. You can hold up to 55 currencies in your account and use your Wise debit card in over 200 countries.[3] When you use your card, you pay the actual exchange rate rather than a markup on it.

Wise business accounts are designed to allow companies to hold multiple currencies without having to open separate accounts for each. Wise also reduces the costs of international business banking considerably. Over 150,000 businesses have Wise accounts.[4]

Companies and banks who want to offer their customers the ease of Wise transfers can also add Wise into their own platforms via white label integrations. This allows other companies to offer international transfers at lower cost to their customers.


Business Model of Wise

Like many fintech companies, Wise’s revenue comes primarily from transaction fees. Their business model is to undercut other legacy and fintech currency exchange and money transfer providers.

Wise’s main goal is, therefore, to reduce the cost of making a money transfer and then to pass those savings onto customers. If they can reduce the costs for consumers, they are then more likely to win a big section of the market.

Wise has accomplished this by setting up bank accounts in countries all around the world so that cross-border transfers become in-country transfers. Wise does all this through an easy-to-use platform. Ultimately, they have reimagined how banking could work.

With Wise, you can do things that would be impossible with normal banks like hold up to 55 currencies in the same account. Or create a bank account that works as you travel no matter what country you’re in and doesn’t charge you exorbitant fees.

The company’s tagline is that they want to make money work without borders. Wise was undoubtedly successful in Europe, where it launched originally, because of the number of currencies used in that relatively small geographic region.

Wise is used by both businesses and individuals and can facilitate everything from a $100 transfer to very large transfers of millions of dollars. Wise transfers billions of dollars every month and passes along billions of dollars in savings a year.

Wise faces significant competition in the money transfer space including from companies like PayPal, Western Union, and Remitly. However, they offer a very different service and charge cheaper fees than most of their competitors. This is especially true when it comes to currency conversions which are often overpriced by other providers.

Wise has been successful because they have low fees and transparency around their pricing structure. They also offer a very different product than other providers, especially when it comes to their individual and business bank accounts.

Wise is a profitable company but it has considerable expenses and low margins on their transfers. That means that to maximize their revenue potential they have to increase the amount of money that they transfer.

Wise has considerable staffing, platform, capital, and development expenses. In 2021, they spent $217 million to generate $260.5 million in gross profit. That resulted in a total profit for the year after taxes and other liabilities of $30.9 million.[5]


How Does Wise Make Money?

Wise makes money in four different ways. These include transfer fees, personal accounts, business accounts, and licensing their technology to other companies.

While Wise made a considerable amount in revenue in 2021, the company does not break down the sources of that income. It is not clear how much revenue they generate from different aspects of their business.


Transfer Fees

Wise charges a low flat fee for each transfer and a variable fee for the currency exchange on all the money transfers that they facilitate. The fee for the transfer usually costs about $4.00 to $5.00 per transfer. The fee for the currency exchange usually costs around 0.04% to 0.05% for each exchange.

As this is considerably less than what other institutions charge, many individuals and businesses choose Wise over traditional money transfer providers or banks.


Individual Accounts

Wise offers customers individual Wise bank accounts where they can make easy transfers, hold money in up to 55 currencies, and get a debit card that they can use in over 200 countries. When clients spend money internationally with their debit card, they do so at the real exchange rate rather than paying a markup.

Wise makes money through monthly account fees and fees on transfers or exchanges made via the account. They also charge a fee if you hold more than 3,000 EUR in your account.


Business Accounts

Wise offers businesses Wise bank accounts that allow them to make large cross-border money transfers easily, hold money in up to 55 currencies in one account, and get a debit card that they can use in over 200 countries.

Wise makes money through a number of account and transfer fees. For example, they have a 45 GBP fee to open your account and charge $4.14 USD for receiving USD wire payments. They also charge a fee if a business is holding more than 30,000 EUR in their account.

In addition, Wise makes money by charging businesses for international payments and exchanges.


Wise Platform

Wise Platform is Wise’s API. It can be integrated with other companies’ and banks’ tech stacks and offer Wise-supported transfers and exchanges. Wise makes money by licensing their technology to other companies.


Wise Funding, Valuation & Revenue

Wise is currently a public company that trades on the London Stock Exchange after launching its IPO in 2021. Wise’s shares opened at 8 GPB, giving the company a valuation of 8 billion GPB.[6]

Prior to going public, the company went through seven funding rounds and raised $396.4 million. Investors in the platform include Baillie Gifford, Andreessen Horowitz, Index Ventures, and Valar Ventures.[7]

Wise currently has a market cap of $4.78 billion. The company has significantly increased its profit year over year, going from just $15 million in profit in 2020 to $30.9 million in 2021.

The reduction in its market cap since its IPO is likely connected to the fact that the company was overpriced at the time of its IPO for the amount of revenue it was bringing in. Instability and fear in the fintech sector generally also likely played a role.

DateRevenueProfit after taxes
2020$302.6 million$15 million
2021$421 million$30.9 million


Is Wise Profitable?

Wise is profitable. The company made a profit of $30.9 million in 2021 on $421 billion in revenue. That was a significant increase from the previous year when the company made just $15 million on revenue of $302.6 million.

As Wise continues its expansion into new markets, it’s expected that the company will continue to increase their revenue and profit numbers.

Whether Wise remains overpriced at its current valuation remains to be seen. While the company shows significant promise, its stock might stumble if they can’t meet investor expectations.



In conclusion, the business model of Wise (formerly TransferWise) is quite simple and straightforward. They offer a very competitive exchange rate and low fees, which has helped them to become one of the leading money transfer providers in the world.

While they are not without competitors, their unique approach has allowed them to dominate the market and provide a great service for their customers.

We can say that Wise is a great option for those who need to transfer money internationally. The company has an innovative business model, which allows it to offer very competitive rates. In addition, Wise is very transparent about its fees and charges, which makes it easier for customers to understand exactly how much they will pay for their transfer. 

With their recent rebranding and expansion into new markets, it seems like they are only going to continue to grow and become an even bigger force in the financial world.

We’re excited to see what the future holds for Wise!

Top 9 Venmo Alternatives That Make Payments Way Easier

How Does Klarna Make Money? Business Model of Klarna

How Does PayPal Make Money? Business Model of PayPal

511 Innovative Fintech Company Name Ideas


  1. Fintech Australia
  2. Forex
  3. Fintech Australia
  4. Fintech Australia
  5. Wise
  6. CNBC
  7. Tech Crunch

Leave a Reply

Your email address will not be published. Required fields are marked *