Wise Plc is offering interest-like returns for customers by tying their money into funds tracking central bank rates.
(Bloomberg) — Wise Plc is offering interest-like returns for customers by tying their money into funds tracking central bank rates.
The British payments firm said it was rolling out the new product — which it has simply named “Interest” — for UK customers with balances in British pounds, US dollars and euros, with plans to expand across Europe next.
Customer money isn’t protected by UK deposit rules and Wise, which is charging 0.29% on the product, doesn’t have a banking license in the country. The firm is instead trying to rival banks’ interest-bearing accounts by moving cash into public debt money market funds, which invest mostly in liquid government assets.
Gabriel May, senior expansion lead for assets, said the new product was more transparent than the way banks pass on central bank rates to their savings customers.
Currently the annual variable yields are:
- 3.29% on USD balances
- 2.52% on GBP balances
- 0.88% on EUR balances
Wise said 99.99% of money held will be immediately available to spend and send on its app.
Co-founded by Estonian entrepreneurs Kristo Käärmann and Taavet Hinrikus in 2011, Wise now has 15 million clients and processes over £9 billion ($11.1 billion) in cross-border transactions every month.
The London-listed fintech reported a 50% rise in transfer values in the three months through September, boosting revenues by 59%. It is authorized as an electronic money institution in the UK.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
