By Charlie Conchie
Money transfer fintech Wise reported a slump in the amount of cash sent on its platform for a second consecutive quarter today as a cost of living squeeze and currency fluctuations unsettled customers.
The London-listed fintech missed analyst estimates as the volume of money transferred per customer dropped four per cent on the previous quarter, led by a sharp eight per cent fall in volume among its personal customers.
“We believe payments amongst these cohorts, such as for property purchases and investments, to be more discretionary in nature and influenced by macroeconomic conditions to a greater extent,” Wise said.
The slowdown led to a one per cent contraction in revenues for the final quarter to £223.5m. The update sent shares plunging beyond ten per cent in early trading.
Wise’s account product has allowed it to rake in cash on the money on the back of rising interest rates over the past 12 months, however.
Revenues for the year however jumped 73 per cent for the year to £964.3m, topping the firm’s recent guidance of 68-72 per cent, as the firm cashes in on rising interest rates.
The firm’s net interest income made on customers’ balances sitting in its accounts jumped 29 per cent to £56m in the final quarter of its financial year. The amount of cash now held in its accounts has rocketed to £10.7bn, up 57 per cent year on year.
In a statement today, chief Kristo Kaarmann said the results showed “great progress” for the firm,
“Over six million people and businesses used Wise for moving and managing their money internationally during the [final] quarter; a 33 per increase year-on-year. And these customers moved nearly £27bn,” he said.
“This growth drove a 45 per cent year-on-year increase in revenue, and when combined with net interest income from the Wise Account, resulted in total income growth of 83 per cent YoY for the quarter and 73 per cent year-on- year for the [the full year].”
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