how does wise plc makes money?

Wise (formerly TransferWise) disrupted the international money transfer market by refusing to use the traditional, expensive correspondent banking system (SWIFT). Instead of making a large margin on a few transactions like traditional banks, Wise operates on a high-volume, low-margin model.

Before breaking down their revenue streams, it helps to understand how they keep their costs low in the first place.

The Secret Sauce: The Local-to-Local Model

Traditional banks rely on the SWIFT network to move money across borders, which involves multiple intermediary banks that all take a cut.

Wise bypassed this entirely by building a massive network of local bank accounts in almost every country they operate in.

If you want to send Euros from France to Dollars in the US:

1. You deposit Euros into Wise's European bank account.
2. Wise's system flags the transaction.
3. Wise's US bank account pays the equivalent Dollars to your recipient.

The money never actually crosses a border. It is simply two local transfers. This eliminates international wire fees and drastically speeds up the process (over 60% of Wise transfers are instant).

Wise multi-currency account interface. Source: Wise

How Wise Actually Makes Money

With their backend costs kept to an absolute minimum, Wise generates revenue through four primary streams:

1. Cross-Border Transfer Fees (The Core Engine)

This is Wise's bread and butter, accounting for the vast majority of their income.

• Transparent Take-Rate: Unlike traditional banks that hide fees by secretly marking up the exchange rate (often by 1% to 4%), Wise gives you the real, mid-market exchange rate (the one you see on Google).
• Upfront Fee: They charge a clear, upfront fee based on the currency pair and the transfer method. This "take-rate" averages around 0.52% to 0.65% per transaction.
• Volume over Margin: By continuously dropping their fees, they attract more users. More users mean more volume, which makes the platform even cheaper to run — creating a classic flywheel effect.

2. Card Services and Interchange Fees

Wise offers a multi-currency debit card that allows customers to hold balances in dozens of currencies and spend money globally like a local.

• Interchange Fees: Every time a customer uses their Wise card at a store or online, the merchant pays a small fee to Mastercard or Visa, and Wise gets a cut of that fee.
• ATM & Over-limit Fees: Customers get a certain amount of free ATM withdrawals per month. Beyond that limit, or when withdrawing unsupported currencies, Wise charges a convenience fee.

3. Interest Income (The "Float")

As millions of customers hold balances in their multi-currency Wise Accounts, Wise deposits these funds into safeguarded, interest-bearing bank accounts or government bonds.

• Passive Revenue: Wise earns interest on this massive pool of customer cash (known as the "float").
• Wise Assets: In some regions, customers can explicitly opt-in to invest their balances in funds (like a BlackRock money market fund), and Wise takes a small management fee.

4. B2B Services (Wise Platform & Wise Business)

Wise is increasingly monetizing business-to-business (B2B) use cases.

• Wise Business: Businesses pay one-time onboarding fees to open accounts that allow them to pay international suppliers, manage employee expenses, and receive foreign payments without opening foreign bank accounts.
• Wise Platform (APIs): Other banks (like Monzo or N26), fintechs, and corporate platforms pay to integrate Wise’s underlying technology into their own apps. They pay Wise custom integration fees or per-transaction fees for using their payment rails.