Money transfer and payments app Wise is increasing some of its charges and fees. The company prides itself on its low-cost approach to the conversion and transfer of foreign currencies. Despite that, it’s raising the fees associated with payment and conversions in Euros and Great British Pounds.
When will the fees apply and how much is Wise raising them?
When those increased fees will apply to you depends on where your home address is.
For those clients who are based in the UK and Europe, the charges will come into effect in two months’ time. However, for those clients that are based in Australia or Canada, the new charges will apply in 20 and 30 days respectively.
The variable fees for converting and sending GBP into Euros have risen from 0.47% to 0.56%, whilst transferring and sending Euros into US dollars will now incur a variable rate charged at 0.49% compared to the prior 0.47% fee.
Those new charges are based on using a wire transfer to facilitate the transactions.
The charges for other methods, such as debit cards, credit cards, and bill payments have also been raised, customers can view the new charges by method and currency on the firm’s website using this link
It’s not just the variable charges that have been adjusted, the fixed fees that Wise charges have also been raised.
For example, on the conversion of Euros into US dollars Wise will now charge $8.89 compared to its previous fixed fee of $8.67.
Why has Wise raised its charges?
Wise says that its average fees for money transfers are just 0.65% but that it is raising its charges as the cost of running its business has been increasing. Still, the company has also said that it was continuing to invest in the business with a view to improving its efficiency which could bring down costs in the future.
The news of the increased charges comes in the same week that Wise published its fourth-quarter trading update, which showed trading income was up by 88% year over year at £280 million. That took full-year income to £964 million, a figure that was above previously issued guidance.
However, the firm’s core revenues came in at £52.0 million and thus below the city’s forecast of £56.0 million.
On the plus side total customer numbers rose by 33% year over year and by 6.0% quarter over quarter.
Retail customers now number 5.80 million and business users stand at 340,000, having risen by 7% in the quarter.
Wise has always seemed to put the customer first, in the past we have questioned whether this has been to the detriment of the business and shareholder returns.
The Wise share price has fallen by around -30% from the £8.00 that it was listed on the London Stock Exchange at, back in July 2021.
Wise shares have, however, rallied by more than £2.50 since the summer of last year, and perhaps this latest dose of realism, and the growth at the business will soon see shareholders back in the money.
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