Wise: Platform & Banking as a Service

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Just one clarification. The business account is a logical extension from the personal account, the platform. But from your explanation, it sounded to me like it was an extension of the business side as well.

Wise shortcuts this process. What Wise fundamentally built was a domestic payment system. Instead of using international rails, Wise uses domestic rails, cutting out all the middlemen. Money goes into Wise's Australian account. If I put Australian dollars into my Wise account and I'm holding Australian dollars, or if I transfer from my domestic account and set up the transfer within Wise as a consumer, I just pay my money.

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Just one clarification. The business account is a logical extension from the personal account, the platform. But from your explanation, it sounded to me like it was an extension of the business side as well.

The transaction goes from an Aussie to an Aussie bank account, like Commonwealth Bank. It used to go to a Wise partner bank account, but Wise is now a registered deposit-taking institution in Australia, so it goes to Wise Bank. That money goes straight into a Wise account as a domestic transfer, with zero fees.

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Just one clarification. The business account is a logical extension from the personal account, the platform. But from your explanation, it sounded to me like it was an extension of the business side as well.

They would go to the bank each month to change money for mortgage payments and found the fees extortionate. They agreed that one would pay the other's mortgage, and when it was time, they would look at the spot exchange rate, withdraw the equivalent in pounds, and hand it over. That's essentially what Wise scaled. Wise, like many fintechs, is a sophisticated treasury function with a proprietary in-house algorithm predicting liquidity needs in each currency. It forecasts positions based on inbound and outbound volumes for the next 24 hours and over weekends. They take hedge positions when markets are closed and can pause payments or dynamically change the forecast payout timeframe, which might be instant, within a minute, or an hour. This can change dynamically, especially during out-of-hours trading if volumes are misjudged or significant changes occur.

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