TransferWise to tap Visa’s global processing network

Richard Branson-backed payments group Trans­ferWise is joining forces with global card giant Visa.

TransferWise’s Tim Cameron is upbeat on the firm’s new Visa partnership. Picture: Aaron Francis/The Australian

Richard Branson-backed payments group Trans­ferWise is joining forces with global card giant Visa, in a partnership that facilitates a faster expansion of the fintech’s multi-currency debit cards.

The deal sees TransferWise tap Visa’s global processing network, through the public cloud, rather than tipping investment into local data centres, telecommunications infrastructure and payment hardware in each jurisdiction.

Visa Cloud Connect is currently in pilot phase with TransferWise and it will be rolled out more broadly to other customers in August.

“This product is going to allow people to really build better debit card and credit card products for their customers and also allows them to launch internationally much faster than ever previously possible,” said TransferWise Australia boss Tim Cameron.

“It’s going to be a boon for all financial services companies that want to expand globally, including Australian fintechs... this will create benefits for the whole ecosystem.”

Mr Cameron said the cloud connect platform removed a lot of the technical and commercial work behind pushing into a new market that typically accompanied a licence regime.

TransferWise is among burgeoning fintech players that are seeking inroads in markets including Australia, by chipping away at the market share of the big banks and other incumbents. It has previously hit out at the opaque fees and overcharging by big banks for cross border money transfers and purchases.

In October, Mr Cameron called for “decisive action” in this market to introduce laws forcing transparent pricing of cross-border money transfers.

The TransferWise multi-currency account allows consumers and businesses to hold and convert 54 currencies at what it says is the “real exchange rate”. The multi-currency debit card facilitates spending and withdrawals directly from any currency balances.

Amid heightened concerns globally around the secureness of data, Mr Cameron said the tie-up with Visa would ensure robust online security.

“I would say it’s more secure, and we’ve removed the middle man from the equation from the current TransferWise equation - which is a processor - and we’ve utilised all the security features of specialised cloud providers,” he added.

Visa’s chief product officer Jack Forestell said: “The TransferWise team came to us last year with a challenge: enable the global rollout of their debit card program, and do it entirely in the cloud.

“It was an exciting opportunity for us to partner with TransferWise and show how we’re thinking and working differently to help today’s fintech innovators scale up quickly. With Cloud Connect, we’ve created an approach that lets TransferWise tap into Visa’s global infrastructure—one of the most secure, reliable and resilient systems in the world—through a single integration.”

TransferWise - co-founded and led by Kristo Käärmann globally - has just marked 10 years in operation and 10 million customers around the world.

The milestones come as global reports say the company is preparing for an initial public offering later this year, and has hired Goldman Sachs and Morgan Stanley to work on a float potentially in London. The company has a valuation of US$5bn, as at its last private capital raising round.

On the potential for a stock exchange listing, Mr Cameron said: “As a high-growth business a public listing has always been on our long-term road map, but there’s just not much more I can add at the moment.”

Locally, TransferWise is pushing further into the small business market and has integrated with BPAY to allow Australian customers to pay bills.

The group has, however, attracted some criticism for introducing card issuing and replacement fees, which has spurred some angst among customers.

Trans­ferWise in November secured a limited licence from Australia’s banking regulator, giving it greater access to the market.

TransferWise’s purchased payment facility licence - a special class of deposit-taking institution that can undertake a limited range of banking activities - was granted by the Australian Prudential Regulation Authority.