Wise Enables Cost Savings for Cross-Border Transfers Through Transparent Pricing
CXOToday has engaged in an exclusive interview with Samarth Bansal, General Manager, APAC, Wise Platform
1. Wise recently partnered with IndusInd Bank in India. How does this partnership help expand Wise’s reach in one of the largest receiver markets for cross-border payments? What opportunities does it open up?
IndusInd Bank partnered with Wise to build the IndusFast Remit service offering digital inward remittance services to non-resident Indians in the US. By integrating Wise Platform, Wise’s infrastructure solution for banks and non-banks, IndusInd Bank is able to seamlessly bring fast, cheap, transparent and convenient cross-border payments into their existing website and app. This eliminates traditional inefficiencies and overheads associated with the correspondent banking system, which means users of the IndusFast Remit service can enjoy the speedy and affordable international transactions that Wise is known for.
Partnerships like these have immense benefits and opportunities. Firstly, it broadens access for more people to have a cheaper and faster way to move and manage their funds across borders, conveniently within a platform or app they’re already familiar with. Globally, Wise’s fees are around 0.67% on average, and over 60% of transactions processed on Wise are instant (less than 20 seconds). In contrast, cross-border money movement through traditional methods typically involves high charges and hidden fees. An earlier Wise study found that people sending money into India from abroad paid over ₹21900 crores on foreign exchange fees in 2020, of which roughly ₹7900 crores were hidden as exchange rate markups and ₹14000 crores spent on transaction fees. Secondly, it conveys the importance of transparent pricing, and having IndusInd Bank as one of the main incumbent banks adopting this acts as an accelerant. Lastly, it demonstrates a growing shift towards a partnership-oriented strategy with incumbent banks, as they recognise the inefficiencies and overheads of the traditional multi-hop correspondent system and seek collaboration as a way to solve these challenges.
These collaborations take Wise another step closer to achieving our mission of building the best way to move and manage the world’s money. With each new integration, more people and businesses around the world get access to faster, better and transparent international payments. A key part of our mission has been advocating for transparency in foreign exchange fees, empowering people with knowledge and insight into their transactions. Our partners, including IndusInd Bank, share this commitment to transparency by adopting transparent pricing with no markups.
2. Security is a major concern with digital transfers. What security protocols and technologies does Wise use to ensure user data protection and prevent fraud? How does it compare to traditional remittance players in this aspect?
Wise takes safety and security of our customers and platform seriously. We are regulated in the markets we operate in, and just like every regulated bank or financial institution, we follow strict rules to keep funds safe.
We continually invest in improving our systems to prevent, detect and act on any potential abuse of our services, including fraud and scams. These systems help us to act fast and protect our customers. One of our core focus areas is to leverage our extensive transaction data to put in-place risk scoring metrics and modeling to flag, investigate and prevent bad actors from leveraging our integrations. We continue to invest in the best security standards across APIs, data integrity and safety to ensure we continue to be trusted by our clients and partners for their cross-border money movement needs. We’re laser focused in ensuring that Wise is safe for all our customers around the world.
3. How does Wise’s approach enable cost savings for customers compared to banks?
At Wise, our mission is to build the best way to move and manage the world’s money. Cross-border payments are slow, expensive and inefficient as most traditional providers are still reliant on outdated infrastructure — the traditional correspondent system — to move funds internationally. This system is highly dependent on intermediaries, which makes it unreliable and challenging to monitor. This incurs high costs and speed delays, which is ultimately passed on to customers. To solve this, Wise has spent the past decade building a fast, convenient, cost-effective and transparent global alternative to the traditional correspondent system.
Today, the majority of consumers are still unaware that all forms of foreign currency payments tend to come with additional fees and hidden costs. These fees, which can become significant over time, often include a foreign transaction fee charged, dynamic currency conversion (DCC) fee and an undisclosed mark-up on the exchange rate. That’s why we believe in making cross-border transactions transparent and fair – with Wise, customers pay a single upfront fee, and the exchange rate they get is the one you see on Google with no markups or hidden charges. People also get visibility into what’s happening to their money from start to finish when making cross-border payments, which means understanding where funds are, when they will arrive, how much the recipient will receive, and the actual total cost to make the payment.
Globally, we have three products. The Wise Account is a truly international account for individuals to send, spend, receive, convert and hold money in different currencies, and Wise Business is the account for international businesses. We also have Wise Platform, our infrastructure offering which enables financial institutions and businesses to incorporate our global payment network into their platforms. We’re really excited about Wise Platform, as more people all over the globe will enjoy cheaper, faster and more transparent international payments with every new partnership.
For most banks, cross-border payments often take a back seat amidst multiple other core focuses such as domestic payments, lending, investments and more. At Wise, we’ve been laser focused on the problem of international payments over the past decade, building the infrastructure that enables the best way to move and manage the world’s money. Now, we’re enabling partners to access our market-leading infrastructure to offer better cross-border payments and customer experiences. With our easy-to-use solutions, partners don’t have to build new infrastructure or overhaul their existing systems to drastically improve their cross-border services, saving them heaps of development time and help bring fast, cheap, convenient, transparent international payments to their customers seamlessly.
4. How can Wise utilize India’s payment infrastructure to expand its reach for customers?
Wise’s products are powered by our unique infrastructure, and it is this infrastructure that enables us to progress on our mission. One of the key areas we’re investing in our infrastructure for the long term is through integrating directly into local payment systems such as in the UK, Hungary, Singapore, and most recently in Australia. By connecting directly to payment systems, we’re able to make meaningful cost reductions which pass on through to our customers.
Looking at India, the nation is extremely fintech-forward, especially with innovations like UPI, the real-time payment rails which addresses what consumers expect from their payments: fast, convenient, and at a low cost. We at Wise celebrate this because it’s exactly in line with our mission of making cross-border payments instant, and we’re constantly on the lookout for ways to directly integrate to real-time payment rails like these so we can offer customers fast, cheap and convenient international transactions.
