Wise plc is a global cross-border payments technology company that generated $1.5 billion in revenue and $717.3 million in profit before tax in FY2025. Founded in 2011 as TransferWise, the company serves 15.6 million active customers who moved $184.4 billion across borders, saving approximately $2.5 billion in fees compared to traditional banks. Wise operates on a transparent fee model with mid-market exchange rates, and is expanding from consumer remittances into multi-currency accounts, business banking, and B2B payment infrastructure.
Wise: Key Facts
- Founded: 2011 in London, United Kingdom (originally as TransferWise)
- Founders: Kristo Käärmann and Taavet Hinrikus (both from Estonia)
- CEO: Kristo Käärmann (since 2017)
- Revenue (FY2025): $1.5 billion ($1.54 billion), up 15% year-on-year
- Reported Profit Before Tax (FY2025): $717.3 million, up 17%
- Active Customers (FY2025): 15.6 million (14.9M personal, 697K business)
- Cross-Border Volume (FY2025): $184.4 billion, up 23%
- Customer Holdings: $27.3 billion in cash and assets
- Employees: Over 8,000 globally
- Stock Listing: London Stock Exchange (WISE), planning US primary listing
- Market Cap (June 2025): Approximately $10.5 billion
How Does Wise Make Money?
Wise generates revenue through five primary streams. Currency conversion fees are the largest, contributing approximately $1009.6 million in FY2025 through transparent percentage charges on cross-border transfers averaging 0.53%. Card interchange fees contributed $279.1 million, up 31%, as customers increasingly used Wise debit cards for international spending. Other revenue including business fees and Wise Assets surged 71% to $192.7 million. Interest income on $21.7 billion in customer balances generated $754.8 million total, of which $191.0 million is classified as underlying interest income and $563.8 million as excess interest above the first 1% yield. Wise Platform, the B2B API service, adds integration and transaction-share revenue from over 85 banking partners.
The company's cost structure demonstrates strong operating leverage. Cost of sales grew only 5% in FY2025 while revenue grew 15%, expanding underlying gross profit margin from 73% to 75%. Administrative expenses rose 25% to $976.1 million as Wise added approximately 1,000 employees and invested in compliance, marketing, and product development. The result was underlying profit before tax of $358.3 million at a 21% margin, identical to FY2024, even as prices were reduced by over 9 basis points.
Who Founded Wise and When?
Wise was founded as TransferWise on January 26, 2011, by Kristo Käärmann and Taavet Hinrikus in London. Käärmann was a management consultant at Deloitte and PwC; Hinrikus was Skype's first employee. Both experienced personal frustration with bank fees on UK-Estonia transfers—Käärmann lost approximately $635 in exchange rate markups on a $12,700 bonus transfer. They devised a peer-to-peer workaround where each deposited the other's currency into local accounts, using Google's mid-market rate. This became Wise's core model.
The founders bootstrapped with $31,750 and a Seedcamp pre-seed investment, then raised a $1.3 million seed round in February 2011 from IA Ventures, Index Ventures, Max Levchin, David Yu, Errol Damelin, and Richard Branson. By 2013, they had processed $317.5 million and saved customers $12.7 million in fees. The company became the first tech firm on UK Faster Payments in 2016, launched multi-currency accounts in 2017, and went public via direct listing in July 2021 at an $11 billion valuation.
What Is Wise's Competitive Advantage?
Wise's moat is its proprietary global payment infrastructure built over fourteen years. By FY2025, the company had direct connections to eight domestic payment systems—UK Faster Payments, Eurozone SEPA Instant, Australia's NPP, Brazil's PIX, Philippines' InstaPay, Japan's Zengin, and others—enabling 65% of payments to arrive in under twenty seconds. This infrastructure cannot be replicated in under five years because each connection requires a local license, compliance infrastructure, and technical integration with a unique domestic rail.
The network effects are equally powerful. Fifteen point six million customers generate $184.4 billion in volume, funding lower prices that attract more customers. The transparent pricing model—mid-market rate plus fixed fee—commands a Net Promoter Score among the highest in financial services. Wise's unit economics improve with scale: every additional customer is more profitable than the last, creating a widening gap with competitors.
How Has Wise's Revenue Grown Over Time?
Wise's revenue has grown consistently since profitability in 2018. FY2023 revenue was $1074.5 million, FY2024 was $1336.0 million (up 24%), and FY2025 was $1539.1 million (up 15%). Underlying income, which adds the first 1% yield on customer balance interest, reached $1730.1 million in FY2025. The growth has been driven by customer acquisition (15.6 million active customers, up 21%), volume expansion ($184.4 billion, up 23%), and product diversification into cards, assets, and business accounts.
However, the growth rate is decelerating as the company matures. Revenue growth of 15% in FY2025 was down from 24% in FY2024. The company is reinvesting gross profit margin into price reductions—cross-border take rate fell 14 basis points to 0.53%—rather than flowing it to the bottom line. This strategy sacrifices short-term margin for long-term market share.
Wise Business Model Explained
Wise operates on a volume-based, transparent fee model that monetizes at multiple points. The core transaction is a currency conversion where Wise charges a percentage fee—averaging 0.53%—rather than hiding markup in the exchange rate. This generates cross-border revenue of approximately $1009.6 million. The Wise Account monetizes through card interchange fees ($279.1 million), account fees, and interest income on balances. Wise Assets generates fees on $5.7 billion in assets under custody. Wise Platform generates integration and transaction-share revenue from banking partners.
The business model depends on a virtuous cycle: lower prices attract volume, volume justifies infrastructure investment, infrastructure enables lower prices. The company has reduced its average fee by over 50% since 2011 while expanding gross margins, demonstrating genuine operating leverage. The risk is that 78.6% of reported profit comes from interest income on customer balances, a source vulnerable to rate declines.
Wise Key Acquisitions
Wise has grown almost entirely through organic expansion and has not made any material acquisitions. The company has invested in building proprietary infrastructure and direct regulatory licenses rather than buying market share. This organic approach has maintained a unified technology stack and compliance framework, but it also means Wise has not acquired complementary capabilities through M&A that competitors might leverage.
What Are the Biggest Risks Facing Wise?
The most dangerous risk is Wise's structural dependency on interest income. In FY2025, $563.8 million of $717.3 million reported profit—78.6%—came from interest above the first 1% yield on customer balances. A 1% decline in interest rates would reduce annual interest income by $179.6 million, potentially cutting reported profit by more than half. The company has no hedging strategy for this risk.
Regulatory scrutiny is intensifying. UK and EU regulators are examining whether Wise's retention of customer interest complies with consumer duty principles. The US CFPB ordered a $2.5 million penalty in February 2025 for alleged illegal remittance practices. A Belgian money laundering investigation in June 2026 adds further regulatory risk. The planned US primary listing and trust bank application would subject Wise to additional SEC and OCC oversight.
Competitive pressure from Revolut (45 million customers, full banking license), Remitly ($659 million revenue, corridor focus), and Western Union (500,000 retail locations) is intensifying. Wise's lack of a cash pickup network limits reach in emerging markets where cash remains dominant.
Bottom Line
Wise is growing but at a decelerating rate, with revenue up 15% in FY2025 versus 24% in FY2024. The company is profitable—$717.3 million reported profit before tax—but 78.6% of that profit depends on interest income from customer balances, making it vulnerable to rate declines. Wise is reinvesting gross profit into price reductions (cross-border take rate down 14 basis points to 0.53%) and infrastructure expansion (8 direct payment rails, 65% instant payments) to capture long-term market share in the $40.6 trillion global cross-border payments market. The strategic bet is that operating leverage from proprietary infrastructure will sustain margins even as prices fall, but the company must navigate regulatory scrutiny on interest retention and secure a US banking license to maintain its growth trajectory.
