Wise Platform: Currencycloud Competition

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What was Visa's vision when acquiring Currencycloud for almost one billion? Visa was a 400 billion company market cap back then, so Currencycloud was a relatively small acquisition for Visa. Was it a critical piece for Visa or just a small add-on?

We first partnered with Visa three and a half years before the acquisition. At that time, the conversation revolved around their inability to insert a real-time exchange rate into the point of sale for an international transaction done on a domestically issued card. They had a static day rate. For example, if you use your debit card issued by CaixaBank in Madrid and come to London and buy lunch, the transaction is authorized based on the static exchange rate available on Monday. Visa sets the day rate for 24 hours, and the transaction is authorized using that rate. It's not provided by the bank; it's a scheme-issued static day rate.

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How do Currencycloud operations work compared to Wise operations? Specifically, in terms of local bank accounts, integrations with banks, direct connections to local payment systems, currency nettings, and compliance like KYC, AML, and capital controls?

It's easy to receive money centrally at your treasury function in London from overseas. You can receive a SWIFT payment and then make a SWIFT payment. But the complexity arises when receiving money locally on local clearing schemes, moving a treasury payment from your in-country account to your centralized treasury, and then distributing wholesale treasury payments into individual countries and breaking out local payments. This complexity, especially in the fi environment, requires multiple in-country banking relationships.

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Can you compare Currencycloud with Wise on metrics like delivery speed, breadth of coverage, payment limits, and pricing to the end customer?

I was joking about JP Morgan earlier, but now JP Morgan is Visa's principal bank so now Currencycloud now has access to JP Morgan's banking capabilities because they have enough volume to justify it. Wise operates a slightly different settlement model. Currencycloud used to work on what I would call a just-in-time basis. The customer would execute a currency conversion on whatever time basis it would be. They'd execute the currency conversion, committing a rate to the counterparty in the market and simultaneously committing an exchange rate to the customer. The difference between those rates is the markup. The customer then has a predetermined time frame to get the sold currency to Currencycloud. Currencycloud then conducts their treasury movement from, say, North America to London and then from London to, let's say, Australia.

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