1) Something I am grappling with is that money transfer appears to be an incredibly competitive and commodity-like business with low switch cost. Competition could heat up in high-volume corridors able to accommodate multiple providers and users can easily compare rates, see eg
For these high-volume corridors, do you envisage that beyond some volume, fixed costs become minimal and unit costs similar -- ie no competitive advantage?
2) Regarding Wise Business, any thoughts on Wise vs Payoneer?
3) Lastly, how would you suggest we ascertain Wise’s free/distributable cash? I believe some buffer capital/pre-funding is required in the business for liquidity management / instant FX conversion.
(1) Anyone can offer money transfers, but none can do so at a rate that competes with Wise. The business has counter-positioned itself in an industry that was ripe for disruption. It attacked one of the most profitable and customer-unfriendly corners of banking: international money transfers. Competitors are unable to compete without cannibalizing their own business. Many have chosen a different route. Rather than compete directly, they partner with Wise and use its infrastructure because its transfer rails are faster, cheaper, and more efficient than their own. When the business was B2C centric, people don't notice the difference in take rates when spending a few hundred bucks on vacation. But now it is moving into B2B, cost matters so much more. This is a huge moat.
(2) I am not familiar with Payoneer.
(3) The best businesses are those that are able to reinvest earnings at high marginal rates of return. This is the secret of the best compounders. Such companies do not distribute capital in the form of dividends, as doing so is a partial liquidation of their balance sheet. If they are able to achieve high returns on capital, the challenge is to grow the capital base, not give it away. Most companies simply don't get this. They pay dividends as a matter of course and that impedes their rate of growth. I am pleased Wise doesn't do that. Instead, it allocates capital wisely (pardon the punn). When the share price is below intrinsic value it recapitalizes its balance sheet through repurchases (it is a mistake to view buybacks as a return of capital to shareholders: https://rockandturner.substack.com/p/no-dividends-and-buybacks-arent-equivalent?utm_source=publication-search). Otherwise, it invests in growth. So this is an investment that should be viewed through the lens of intrinsic value growth rather than distributable cash. That having been said, you can track free cash flow to see how it is growing as a proxy valuation guide.
1) For high-volume corridors (i.e. big markets), do you think that a few players can co-exist and compete fiercely on price, or is it a winner-take-all? E.g. for the US-to-India corridor, Xe, Remitly and ICICI Bank also appear to offer very competitive rates.
2) As you said, Wise is moving into B2B. Payoneer enables cross-border payments for SMBs. To my knowledge, Payoneer is the dominant player in this space.
3) I wasn’t clear sorry, was referring to your net cash figure of USD1.7B. Wise requires some buffer capital for liquidity management / instant FX conversion -- could it do so with just customer deposits alone, or does it need to tap into some of the USD1.7B net cash as well? This question could be unfair since we won’t know such granular operational details, but if you happen to have insights into this it would be interesting to know.
All of the companies that you mention operate on a different basis. None has the operational infrastructure that is unique to Wise. Could they try to replicate it? Yes. But would it be viable? Probably not, particularly as Wise keeps reducing its take rate. Think about HSBC Zing, launched inhouse in 2024 to compete with Wise, abandoned a year later in 2025 because they couldn't compete. And HSBC is one of the largest financial institutions out there.
In relation to Payoneer, as I said, I don't know that business, but my understanding is that Wise is built around low-friction cross-border banking-style use: sending, holding, converting, and paying in multiple currencies with clear pricing. Payoneer is more of a business payout and receivables platform, with a stronger emphasis on marketplace integrations. Different workflows, different solutions, different applications.
Wise is generally stronger for direct international transfers, transparent FX, and multi-currency account management.
I don't have an answer to your (3). May I suggest you reach out to their IR department with that question? If you receive an answer, please do share it.
The Wise share price has acted adversley to news that its plans to operate in the U.S. under a national trust bank charter have hit a roadblock, with the Office of the Comptroller of the Currency (OCC) denying its application for the time being.
The application was submitted more than a year ago. Wise says the denial is regretable because its business and its compliance framework have evolved significantly since the application was made, including addressing historical issues highlighted by the OCC and referenced in a July 2025 Multi-State Consent Order.
The decision does not affect Wise’s day-to-day U.S. operations, which continue under its existing money transmitter licences across 48 states and four territories. Over the past year, the company has also invested heavily in strengthening its U.S. compliance programme, improving investigations and reporting, enhancing customer data integrity and bolstering controls designed to prevent financial crime, alongside its work with regulators including the FCA and NBB.
The bigger issue is that the regulatory landscape has moved on since Wise first submitted its application. Changes to U.S. payments regulation, including the GENIUS Act and evolving Federal Reserve policy around access to master accounts, mean Wise now believes its original trust bank approach is no longer viable. The company has therefore told the OCC that it intends to submit a fresh national trust bank charter application under the new GENIUS Act framework. While this creates a delay, it does not change the underlying trajectory of the business. In FY26, Wise served around 19 million customers, processed more than $240 billion in cross-border transactions and saved customers over $3 billion.
WISE (WSE) FY2026 results and guidance for FY2027.
Wise delivered another impressive year, demonstrating that it can still grow at scale while remaining highly profitable. FY26 net revenue increased 19% to $2.5 billion, income before tax reached $660.4 million, and the business continued to generate significant cash. Customer engagement also strengthened, with active customers rising 21% to 19 million and cross-border payment volume increasing 31% to $243.5 billion. Management reinforced that growth, profitability, and cash generation all remain healthy, announced a new share purchase programme expected to exceed $500 million, and reiterated its medium-term financial targets.
The underlying customer metrics were arguably even more encouraging. Customer balances grew 40% to $39.0 billion, suggesting more people are using Wise as their primary account rather than simply as a low-cost transfer service. Card spending climbed 37% to $43.6 billion, further supporting the view that Wise is steadily evolving into a broader financial platform rather than a single-product business.
One metric that may initially concern investors is the decline in the cross-border take rate from 0.58% to 0.52%. In reality, this is one of the strongest signals that the business model is working. Wise doesn't optimise for take rate. It optimises for margins. If it can continue lowering prices while maintaining high profitability, it means operating leverage is flowing through the business. Customers receive cheaper transfers, the platform becomes even more attractive, and the competitive moat widens.
Management's guidance reinforces that view. For FY27, Wise expects net revenue growth around the middle of its long-term 15% to 20% constant currency range, while income before tax margin is expected to remain around the top end of its 20% to 25% target range. It also noted that current margins remain above the long-term target because it has not yet fully passed higher interest income back to customers.
Taken together, the results show a business that continues to compound at an impressive rate. Wise is adding customers, increasing engagement, expanding into everyday banking, lowering prices, and still producing industry-leading margins. For a platform business, that's a powerful combination.
Hi James, solid pitch here! Time to do some DD on Wise. Just curious, if you have an opinion which is the better business in the long run…Adyen or Wise? And which is the more attractive stock if you can only buy one of them? Thanks.
I can't offer investment advice. I am sure you will understand.
What I can say is that both are very different, operating in different parts of the fin-tech world. Both are complimentary and it wouldn't surprise me if they merged at some point, especially since the CEO of Adyen is on the Wise board.
I provided my thoughts on both in terms of valuation. Perhaps that might help you to make a decision. Alternatively, your choice isn't one or the other. You could invest in both.
Ok understood thanks, have you ever spoken to a human at Wise? Wise’s platform does sound interesting and proprietary but Revolut’s revenue growth rates are faster. Whether or not its sustainable is another matter but at the moment net income and revenue is growing faster at Revolut while both have high return on equity.
Revolut and Wise have entirely different cultures and are very different businesses
I have accounts at both. Now considering closing my Revolut.
I once had an issue I needed to resolve with Revolut. It was impossible to speak to a human being and their automated system is awful. They want to onboard customers, but they don’t want to service them.
Then I received an incentive from Revolut to introduce friends and family. Both introducer and introducee would be given a financial reward. I introduced 6 people and neither I nor they received the reward. I tried to speak to someone at Revolut about it as a pont of principle…. impossible.
These things speak volumes about the culture of the company.
It is all about driving profit at the expense of the customer.
Wise is the complete opposite. The customer always comes first. Scale economic shared, then returning ~80% of the NIM to the customer entirely voluntarily.
Wise gains customers primarily through word of mouth recommendations without needing to offer incentives.
That’s just the culture differences.
The other thing is that Revolut are chasing banking services via a banking license (loans, etc) which is an entirely different business model.
One of the most exciting aspects of the Wise investment thesis is its Platform that white labels its payment rails for major banks. That means that Morgan Stanley, Standard Chartered, Itau, Nubank and others are now distribution channels for Wise.
Revolut can’t do that. It is competing with these banks. They will never partner with it.
Even in terms of money movements, Wise has its own proprietary model. Revolut uses Visa Direct (formerly CurrencyCloud) as its FX Rails but they use an aggregator style model versus actual netted pools in the Wise model. So Revolut doesn't have its own infrastructure to white label in any event.
I hope this helps.
So I think comparing Wise to Revolut is an apples to oranges comparison.
I have heard similar experiences with Revolut and I think this is something that a lot of investors aren't really considering in their analyses. Taking an analogy to a different business, I have seen a lot of investors in substack deep dive into Adobe and qualifying it as undervalued. It might be the case, but the reason why I refused to buy the stock, and to my benefit as it continued to decline, was not fears of AI but a simple check where I concluded that Adobe has been increasing their subscription prices for the last few years very rapidly, as opposed to its more long term trajectory, and many customers have jumped ship to affordable or even free alternatives.
A business that expands profits by charging more without adding sufficient incremental value is not a sustainable one, with a few exceptions like tobacco that can compensate it's declining volumes with an addicting product where there is virtually no entrants. A business that can grow while maintaining the same price is good. But a business like Wise that can expand gross margins 10% while fees go down 20% is amazing. Which is why we need to understand what is driving individual financial line items and not the headline earnings figure...
Thanks, great write-up. I personally think there is a good chance they announce a decent SBB next week at the results. Previously hinted at it, and unless they intend to just grow the cash balance further, then given they pretty much expense everything, then a SBB is really the only option left. Money laundering can't imagine they are complicit, but it is the tail risk, balance of probabilities should be fine.....
Thank you for your post.
1) Something I am grappling with is that money transfer appears to be an incredibly competitive and commodity-like business with low switch cost. Competition could heat up in high-volume corridors able to accommodate multiple providers and users can easily compare rates, see eg
https://www.reddit.com/r/returnToIndia/comments/1tkgpf5/10000_to_india_actual_rupees_delivered_by_wise_xe/
For these high-volume corridors, do you envisage that beyond some volume, fixed costs become minimal and unit costs similar -- ie no competitive advantage?
2) Regarding Wise Business, any thoughts on Wise vs Payoneer?
3) Lastly, how would you suggest we ascertain Wise’s free/distributable cash? I believe some buffer capital/pre-funding is required in the business for liquidity management / instant FX conversion.
(1) Anyone can offer money transfers, but none can do so at a rate that competes with Wise. The business has counter-positioned itself in an industry that was ripe for disruption. It attacked one of the most profitable and customer-unfriendly corners of banking: international money transfers. Competitors are unable to compete without cannibalizing their own business. Many have chosen a different route. Rather than compete directly, they partner with Wise and use its infrastructure because its transfer rails are faster, cheaper, and more efficient than their own. When the business was B2C centric, people don't notice the difference in take rates when spending a few hundred bucks on vacation. But now it is moving into B2B, cost matters so much more. This is a huge moat.
(2) I am not familiar with Payoneer.
(3) The best businesses are those that are able to reinvest earnings at high marginal rates of return. This is the secret of the best compounders. Such companies do not distribute capital in the form of dividends, as doing so is a partial liquidation of their balance sheet. If they are able to achieve high returns on capital, the challenge is to grow the capital base, not give it away. Most companies simply don't get this. They pay dividends as a matter of course and that impedes their rate of growth. I am pleased Wise doesn't do that. Instead, it allocates capital wisely (pardon the punn). When the share price is below intrinsic value it recapitalizes its balance sheet through repurchases (it is a mistake to view buybacks as a return of capital to shareholders: https://rockandturner.substack.com/p/no-dividends-and-buybacks-arent-equivalent?utm_source=publication-search). Otherwise, it invests in growth. So this is an investment that should be viewed through the lens of intrinsic value growth rather than distributable cash. That having been said, you can track free cash flow to see how it is growing as a proxy valuation guide.
Think I wasn’t clear enough, let me rephrase:
1) For high-volume corridors (i.e. big markets), do you think that a few players can co-exist and compete fiercely on price, or is it a winner-take-all? E.g. for the US-to-India corridor, Xe, Remitly and ICICI Bank also appear to offer very competitive rates.
2) As you said, Wise is moving into B2B. Payoneer enables cross-border payments for SMBs. To my knowledge, Payoneer is the dominant player in this space.
3) I wasn’t clear sorry, was referring to your net cash figure of USD1.7B. Wise requires some buffer capital for liquidity management / instant FX conversion -- could it do so with just customer deposits alone, or does it need to tap into some of the USD1.7B net cash as well? This question could be unfair since we won’t know such granular operational details, but if you happen to have insights into this it would be interesting to know.
All of the companies that you mention operate on a different basis. None has the operational infrastructure that is unique to Wise. Could they try to replicate it? Yes. But would it be viable? Probably not, particularly as Wise keeps reducing its take rate. Think about HSBC Zing, launched inhouse in 2024 to compete with Wise, abandoned a year later in 2025 because they couldn't compete. And HSBC is one of the largest financial institutions out there.
In relation to Payoneer, as I said, I don't know that business, but my understanding is that Wise is built around low-friction cross-border banking-style use: sending, holding, converting, and paying in multiple currencies with clear pricing. Payoneer is more of a business payout and receivables platform, with a stronger emphasis on marketplace integrations. Different workflows, different solutions, different applications.
Wise is generally stronger for direct international transfers, transparent FX, and multi-currency account management.
I don't have an answer to your (3). May I suggest you reach out to their IR department with that question? If you receive an answer, please do share it.
The Wise share price has acted adversley to news that its plans to operate in the U.S. under a national trust bank charter have hit a roadblock, with the Office of the Comptroller of the Currency (OCC) denying its application for the time being.
The application was submitted more than a year ago. Wise says the denial is regretable because its business and its compliance framework have evolved significantly since the application was made, including addressing historical issues highlighted by the OCC and referenced in a July 2025 Multi-State Consent Order.
The decision does not affect Wise’s day-to-day U.S. operations, which continue under its existing money transmitter licences across 48 states and four territories. Over the past year, the company has also invested heavily in strengthening its U.S. compliance programme, improving investigations and reporting, enhancing customer data integrity and bolstering controls designed to prevent financial crime, alongside its work with regulators including the FCA and NBB.
The bigger issue is that the regulatory landscape has moved on since Wise first submitted its application. Changes to U.S. payments regulation, including the GENIUS Act and evolving Federal Reserve policy around access to master accounts, mean Wise now believes its original trust bank approach is no longer viable. The company has therefore told the OCC that it intends to submit a fresh national trust bank charter application under the new GENIUS Act framework. While this creates a delay, it does not change the underlying trajectory of the business. In FY26, Wise served around 19 million customers, processed more than $240 billion in cross-border transactions and saved customers over $3 billion.
WISE (WSE) FY2026 results and guidance for FY2027.
Wise delivered another impressive year, demonstrating that it can still grow at scale while remaining highly profitable. FY26 net revenue increased 19% to $2.5 billion, income before tax reached $660.4 million, and the business continued to generate significant cash. Customer engagement also strengthened, with active customers rising 21% to 19 million and cross-border payment volume increasing 31% to $243.5 billion. Management reinforced that growth, profitability, and cash generation all remain healthy, announced a new share purchase programme expected to exceed $500 million, and reiterated its medium-term financial targets.
The underlying customer metrics were arguably even more encouraging. Customer balances grew 40% to $39.0 billion, suggesting more people are using Wise as their primary account rather than simply as a low-cost transfer service. Card spending climbed 37% to $43.6 billion, further supporting the view that Wise is steadily evolving into a broader financial platform rather than a single-product business.
One metric that may initially concern investors is the decline in the cross-border take rate from 0.58% to 0.52%. In reality, this is one of the strongest signals that the business model is working. Wise doesn't optimise for take rate. It optimises for margins. If it can continue lowering prices while maintaining high profitability, it means operating leverage is flowing through the business. Customers receive cheaper transfers, the platform becomes even more attractive, and the competitive moat widens.
Management's guidance reinforces that view. For FY27, Wise expects net revenue growth around the middle of its long-term 15% to 20% constant currency range, while income before tax margin is expected to remain around the top end of its 20% to 25% target range. It also noted that current margins remain above the long-term target because it has not yet fully passed higher interest income back to customers.
Taken together, the results show a business that continues to compound at an impressive rate. Wise is adding customers, increasing engagement, expanding into everyday banking, lowering prices, and still producing industry-leading margins. For a platform business, that's a powerful combination.
Hi James, solid pitch here! Time to do some DD on Wise. Just curious, if you have an opinion which is the better business in the long run…Adyen or Wise? And which is the more attractive stock if you can only buy one of them? Thanks.
I can't offer investment advice. I am sure you will understand.
What I can say is that both are very different, operating in different parts of the fin-tech world. Both are complimentary and it wouldn't surprise me if they merged at some point, especially since the CEO of Adyen is on the Wise board.
I provided my thoughts on both in terms of valuation. Perhaps that might help you to make a decision. Alternatively, your choice isn't one or the other. You could invest in both.
I published a write-up on WISE a couple of days ago. Feel free to check it out.
I’m not sure it has as strong a sales and distribution culture as Revolut?
Ok understood thanks, have you ever spoken to a human at Wise? Wise’s platform does sound interesting and proprietary but Revolut’s revenue growth rates are faster. Whether or not its sustainable is another matter but at the moment net income and revenue is growing faster at Revolut while both have high return on equity.
Both are interesting fintechs, disrupting an outdated inefficient industry
I think the Wise Platforms, where major banks become distribution channels for Wise, will see revenue accelerate rapidly. That is only just starting.
Time will tell
Revolut and Wise have entirely different cultures and are very different businesses
I have accounts at both. Now considering closing my Revolut.
I once had an issue I needed to resolve with Revolut. It was impossible to speak to a human being and their automated system is awful. They want to onboard customers, but they don’t want to service them.
Then I received an incentive from Revolut to introduce friends and family. Both introducer and introducee would be given a financial reward. I introduced 6 people and neither I nor they received the reward. I tried to speak to someone at Revolut about it as a pont of principle…. impossible.
These things speak volumes about the culture of the company.
It is all about driving profit at the expense of the customer.
Wise is the complete opposite. The customer always comes first. Scale economic shared, then returning ~80% of the NIM to the customer entirely voluntarily.
Wise gains customers primarily through word of mouth recommendations without needing to offer incentives.
That’s just the culture differences.
The other thing is that Revolut are chasing banking services via a banking license (loans, etc) which is an entirely different business model.
One of the most exciting aspects of the Wise investment thesis is its Platform that white labels its payment rails for major banks. That means that Morgan Stanley, Standard Chartered, Itau, Nubank and others are now distribution channels for Wise.
Revolut can’t do that. It is competing with these banks. They will never partner with it.
Even in terms of money movements, Wise has its own proprietary model. Revolut uses Visa Direct (formerly CurrencyCloud) as its FX Rails but they use an aggregator style model versus actual netted pools in the Wise model. So Revolut doesn't have its own infrastructure to white label in any event.
I hope this helps.
So I think comparing Wise to Revolut is an apples to oranges comparison.
I have heard similar experiences with Revolut and I think this is something that a lot of investors aren't really considering in their analyses. Taking an analogy to a different business, I have seen a lot of investors in substack deep dive into Adobe and qualifying it as undervalued. It might be the case, but the reason why I refused to buy the stock, and to my benefit as it continued to decline, was not fears of AI but a simple check where I concluded that Adobe has been increasing their subscription prices for the last few years very rapidly, as opposed to its more long term trajectory, and many customers have jumped ship to affordable or even free alternatives.
A business that expands profits by charging more without adding sufficient incremental value is not a sustainable one, with a few exceptions like tobacco that can compensate it's declining volumes with an addicting product where there is virtually no entrants. A business that can grow while maintaining the same price is good. But a business like Wise that can expand gross margins 10% while fees go down 20% is amazing. Which is why we need to understand what is driving individual financial line items and not the headline earnings figure...
Interesting. Adobe is cheap, maybe for a reason
Well said! I concur.
Thanks, great write-up. I personally think there is a good chance they announce a decent SBB next week at the results. Previously hinted at it, and unless they intend to just grow the cash balance further, then given they pretty much expense everything, then a SBB is really the only option left. Money laundering can't imagine they are complicit, but it is the tail risk, balance of probabilities should be fine.....
A stock buy back at current valuations would make a lot of sense.
I am very much against buy backs at any price, but when executed under intrinsic value it is an incredibly accretive use of capital.
People wrongly characterize them as a return of capital which is broadly equivalent to a dividend. That's a mistake, they are a re-capitalization of the balance sheet. See this short post: https://rockandturner.substack.com/p/no-dividends-and-buybacks-arent-equivalent
Assuming that there is no other reinvestment opportunity for the capital, buy backs would be welcomed right now.
But they are investing heavily in AI, agentic commerce and other initiatives. Didn't they commit $250m to this recently?
Accretive reinvestment would be better than SBB. Let's see what happens at the next earnings release later in June.