SYDNEY (Reuters) – Digital money transfer group Wise Plc will join an Australian payments network that is expected to settle transfers within the country faster and more cheaply, chief executive Kristo Kaarmann said on Friday.
The company will become a direct participant and shareholder of the New Australian Payments Platform (NPP), Kaarmann said.
Wise said joining the nuclear power plant would allow him to lower the average price of money transfers to or from Australia by bypassing middlemen to instantly clear and settle payments in real time.
Kaarmann did not say how much lower his rates would be after joining the nuclear power plant. He currently charges around 0.56% on his Australian transfers, the company said.
This compares to the 5% to 6% on average charged by the country’s major banks, according to Wise’s calculations.
The 10-year-old fintech company is regulated in Britain, the United States, Singapore and, among others, Australia, where it also holds a banking license. But in most of the more than 80 countries where it offers remittances, Wise partners with banks to hold deposits, driving up costs and prices.
“Our average cost (…) is already several times cheaper than that of banks,” said Kaarmann, based in London. “We want to get as close to zero as possible, in terms of cost.”
The company, whose market debut in July became the largest tech listing ever on the London Stock Exchange, estimates that it manages around 1% to 2% of transfers made by consumers and small and medium-sized businesses in the world.
(Reporting by Paulina Duran in Sydney; Editing by Christian Schmollinger)