Our 2020 annual report: the financial discipline you deserve

Wise is building a new way to move money around the world. A way that’s faster and more convenient than the banks that came before us, and at a drastically lower, transparent price. Our annual financial report is an opportunity to reflect on our progress.

Today, Wise serves more than 8 million people and businesses. In the financial year, we processed a total volume of £67 billion, and sent £42 billion across borders, saving you £1 billion a year compared to making the same transfers with the bank.

That means 1 in every £40 sent by people across borders is now with Wise.*

The 2020 financial year saw 70% growth in annual revenue to £302.6 million, and was the fourth year in a row in which Wise has posted a profit.

Do the numbers matter?

Yes. These numbers are a key barometer in our progress. The growth in volume and revenues reflect the ever increasing amount of money that people and businesses convert through Wise, and in turn the fees that we are saving them.

At our current growth rate, it’s only a matter of time before Wise is trusted to move more money than any other provider in the world. That trust is only possible when you know the business will be here to stay, and sustainability is a non-negotiable part of that.

The fact that we are profitable for the fourth consecutive year, demonstrates our commitment to this sustainability - we’re not losing money on the service we provide, and we’re here to stay.

We are proud to charge you, transparently and fairly, the cost of the service that we provide. In fact we think this should be something you require from a firm you use. Why? Well - it keeps us honest, and it means you can trust us. We know what we need to do to drive down the cost - which is make the service cheaper and better. We cannot be tempted to take shortcuts, whether through making a margin on a product you didn’t ask for, or even worse by monetising your data. Further, we will proudly only charge you what it costs us plus a small margin, and not what we can get away with. You’ll never find yourself subsidising the cost of a customer elsewhere. It’s got to be fair.

How do we do it?

From the first money transfer in January 2011, we’ve had a model that works. That takes a ton of discipline, closely adhering to a few principles:

1. We invest in infrastructure - Our team aims to build deep integrations in local markets, cutting out the middlemen that make up the correspondent banking model. This takes time - it often takes us years of working with regulators and partners to strengthen our product in a new market. But in the long run, it helps us lower underlying unit costs, as well as get closer to our aim of eventually free and instant money transfer. Across the 2020 financial year we went from 20% to 26% of all transfers delivered instantly. Now, we’re at 30%. A buzzy app design is nothing without strong tech underneath it.

2. We charge you the lowest possible fee - We have a team of analysts dedicated to understanding, and constantly reviewing, exactly how much it costs to offer our service to each customer. We charge you that price with a small profit margin, and no more. When our costs go down we lower prices, and in the 2020 financial year this happened on transfers to South Africa, Malaysia, Pakistan and the Philippines to name a few.

3. Zero cross-subsidising - This is a really hard bit, and a major difference between Wise and many other businesses. Lots of companies offer certain features for free, and make all their money on a few overpriced products - think of free current accounts, being paid for by interest on loans and mortgages. Cross-subsidising between products and customers is unfair as it means some people are paying more than they should be. It’s a slippery slope towards huge fees for the customers who can least afford it, eg. disproportionate fees for unarranged overdrafts. Cross-subsidising also puts the business at risk when customer behaviour changes - if people sending money to Europe are subsidising transfers to Australia, what happens when there’s a sudden swing towards greater volumes to Aussie dollar? Every product, feature and customer at Wise stands alone as sustainable.

It’s hard, but worth it.

The easiest thing would be to drop prices to zero, onboard tens of millions more customers, and figure out the rest later. Our mission means making hard choices. Average prices for the financial year went up between 2019 and 2020, from 0.65% of the amount sent, to 0.68%, after investing more in underlying infrastructure than expected. That hurts, but this week we’ve been able to correct this by dropping prices for 76% of our customers after scaling lowered our costs. Our model means that while the overall trajectory is downward, there will be bumps in the road.

It’s a privilege to be trusted by you, in some of the most important moments of your life. This year has shown more than ever that nobody knows what’s around the corner. When you put your money into Wise, you know that we will be here next year, and for many many more after that. Operating sustainably is our duty to you, the customer, in return for your trust.

You can download our full annual report at this link.

Thank you, and onwards!

*This figure has been edited to reflect new independent research, 2021 Edgar, Dunn & Company (“EDC”) Market Study.