By Oliver Smith on Monday 14 November 2022
“We’re happy to be in a position to pass on the economic benefits from the balances customers are holding with us…”
International payments giant Wise is scrapping the fees it charges for domestic transfers made in the same currency.
The change is starting with the removal of fees for same-currency transfers of Sterling, Euro, Hungarian Forint and Singapore Dollar holdings.
Wise says it’s able to make this change due to the nature of rising interest rates, which means its customers’ deposits are now generating interest income for Wise that it can use to remove these fees.
“Our mission is to bring down the price of moving and managing money around the world over time and we’ve built a long-term, sustainable growth model where we share our successes with our customers to achieve this goal,” said Lars Trunin, UK head of product at Wise.
“As a result of this financial discipline over the years, we’re happy to be in a position to pass on the economic benefits from the balances customers are holding with us through these new prices, while we also continue to invest in our product and infrastructure.”
While this is obviously good news for customers, it comes just three weeks after Wise reported that it had to increase the average cost of its international transfers in Q2, the first rise since 2020.
During the second quarter Wise said the average charge for customers to make a transfer had risen by three basis points on the previous quarter, to 0.64 per cent, due to the level of foreign exchange volatility.
“We've seen extreme macroeconomic conditions persist throughout the second quarter, and whilst unfortunately this meant we had to raise prices slightly for some customers, we've been working hard to limit these increases and are working to bring them back down again,” said CEO and co-founder Kristo Kärmann.
Despite the increase, Wise says it remains dramatically cheaper than incumbent banks and payment providers, which typically charge between 3-5 per cent on international transfers.