"Payment and Investment Firms Are Well-Suited Towards a Mutual Goal": Wise Platform Head

Deposits and withdrawals have always been a hassle for brokers. With the traditional channels, like credit/debit cards or bank transfers, it often takes hours or days in some cases, and the associated fees are also high. The solution to this problem is fintech.

Interactive Brokers (Nasdaq: IBKR), a big name in electronic trading platforms, partnered with Wise (previously Transferwise) earlier this year to offer clients a new payment option to fund their accounts. With "Pay with Wise," the deposits are claimed to be done in seconds with minimum fees.

Wise Streamlines Funding in Brokerage Accounts

"The IBKR team sought to offer its clients account funding in more local currencies, enabling greater participation in global markets, diversification of investments, and added protection against local economic uncertainty - all on Interactive Brokers' single unified platform," Steve Naude, the Head of Wise Platform, told Finance Magnates.

"That's where Wise Platform came into play. Wise Platform allows banks and businesses to leverage our global payments infrastructure and embed solutions that make sending, receiving, and managing money internationally easier than ever for their customers."

"Clients can transfer directly from balances in their linked Wise accounts, and they can also receive funds in their chosen currency in a matter of seconds as more than 50% of all transfers globally sent through Wise are instant (arriving in less than 20 seconds)."

Further, the 'Pay with Wise' option enables IBKR clients to convert their local currency to an Interactive Brokers' supported currency at the true mid-market exchange rate without leaving the platform.

"Together, these features help reduce transfer fees and shorten the time IBKR clients need to move funds between their bank accounts and their trading accounts," Naude added.

The Massive Demand for Payments Modes

However, IBKR is not the only brokerage platform to use Wise for streamlining its payment modes. Two stock broker platforms based in Singapore, Tiger Brokers Singapore and Gotrade Singapore, also use Wise for "low-cost foreign currency transactions."

"With Tiger Brokers, Singaporean investors can seamlessly transfer funds from their overseas bank accounts to Singapore Dollar (SGD) in real-time and execute trades on the Tiger Trade app within minutes. Through the app, users get the real exchange rate and see the fees upfront with no hidden costs," said Naude.

"Similarly, Gotrade Singapore app users now have seamless access to Wise's convenient and low-cost international money transfers to fund their accounts."

Disrupting Banks

Wise, rebranded from Transferwise in February 2021, is known for offering low-cost forex transfers and a multi-currency account. The platform beats banks by offering mid-market FX rates while charging a small fee per transaction. The customer base of the company also keeps increasing, as it ended the first quarter of 2023 with 6.7 million active customers, which is a yearly jump of 33 percent.

Now, its collaboration with brokers like IBKR shows Wise is focusing on disrupting the services of the banks in another massive industry.

"Managing money across multiple currencies continues to be a hassle for customers, and international payments remain slow, expensive, and frustrating. Enhancing global payment services within these platforms makes customers' lives even easier by allowing them to pay into and withdraw from their account faster, cheaper, more transparently, and in the currency that works best for them," Naude said.

"While building these networks from scratch would take years and significant resources, partnerships with companies like Wise are making it possible to offer improved global payment options for customers quickly and efficiently. The payment and investment industries are well suited to work towards a mutual goal of making customers' lives easier and helping them make the most out of their money."

"Speed, costs, convenience, and transparency are crucial for today's investing customers, and Wise believes in making seamless experiences the norm for everyone, everywhere. For too long, international money transfers have continued to be slow, expensive, and frustrating. Customers deserve better, and we're delighted to team up with these industry leaders to give investors access to quick and low-cost transfers with no exchange rate markups or hidden fees."

Numbers Shows the Picture

According to the latest numbers, London-listed Wise handled £28.2 billion in transfer volumes between April and June, generating a revenue of £240 million. Its income also increased 66 percent compared to the previous year with £311 million due to growing active customers and a surge in interest income.

Further, account balances at Wise have climbed to £11.5 billion, with a gross interest income yield of 3.4 percent in Q1 FY24.

"We believe in a future where faster, cheaper, and more transparent international payment solutions are available for every customer around the world, whether they're investing in stocks or sending money to family overseas. Our integration with investment trading platforms such as IBKR contributes towards a future where this is the norm – not the anomaly."