Wise, the London-listed cross-border payments firm, raised its full-year growth outlook after reporting a sharp jump in transaction volumes and customer numbers. The company said volumes rose 22% to $71.7 billion in its second quarter, while net revenue climbed 21% to $739.1 million. Active customers grew 20% to 12.5 million, and customer balances on its platform rose 28% to $43.5 billion.
The results suggest that demand for cheaper international money transfers is still rising, as both consumers and businesses send funds across borders and keep more money on digital platforms. Wise has built its business around undercutting traditional banks on fees and offering faster, more transparent exchange rates.
Why the take rate matters
Wise is competing harder on price. Its "take rate" — the percentage it earns on each transfer — fell to 0.49% from 0.52% a year earlier. That means the company makes a bit less on every dollar moved. For investors, this is the key metric to watch: when Wise cuts prices, it gives up revenue on each transaction, so it needs faster growth in total payment flow to make up the difference.
That trade-off can work if a large share of Wise's costs — such as running its payment network and meeting compliance requirements — don't rise one-for-one with volume. If that's the case, extra throughput can lift profit margins over time. Management kept its income-before-tax margin outlook near the top of its 20% to 25% range, a signal that it believes it has that kind of operating leverage.
The risk is that the story becomes more sensitive to momentum. If cross-border volumes keep rising strongly, margins can hold even with lower fees. If volumes cool, take-rate pressure is more likely to show up quickly in net revenue growth. Wise also reiterated its push toward the upper end of its 15% to 20% fiscal 2027 target range.
Regulatory overhang in the US
One open question is the United States. Reuters noted that regulators denied Wise's application in July to form a national trust bank. The company says it plans to reapply. A US banking license would allow Wise to offer more services directly to American customers and reduce its reliance on partner banks. Until then, its US expansion remains somewhat constrained.
Wise's results come as the broader payments sector faces intense competition from fintech startups and traditional banks improving their digital offerings. The company's ability to keep growing volumes while cutting prices will be a test of its business model's durability.
What it means for investors
For everyday investors, Wise's update is a reminder that growth and profitability don't always move in lockstep. The company is growing fast, but it's deliberately sacrificing some revenue per transaction to win market share. That strategy can pay off if scale drives down unit costs, but it also leaves the company more exposed to any slowdown in cross-border payment volumes.
Investors should watch Wise's quarterly volume growth and take rate closely. If volumes continue to climb at double-digit rates, the company's margin outlook looks achievable. If growth decelerates, the lower take rate will hit revenue harder.
Wise's situation also highlights a broader theme in fintech: the race to offer the lowest fees is intensifying. Companies that can combine low prices with efficient operations may emerge as winners, but those that can't may find their margins squeezed.
For now, Wise's raised outlook suggests management is confident that volume growth will continue to outpace the drag from lower fees. The coming quarters will show whether that confidence is justified.
