Wise (LON: WISE) (OTCPK: WPLCF) is one of those companies out there that simply works. We say this as users of the service and we're impressed enough by it to say that anyone working internationally, across currencies, really should at least consider gaining an account with Wise. No, this is not a paid advertisement for their services. It is though an observation that what they do, the prices they charge for it, are such that it's something that anyone other than the major multinationals also working across FX should consider. And, if we're that gung ho about the corporate services then why not say so?
But, obviously, we all want to know whether the company then makes a profit doing what it does? The answer there is yes - and an increasingly large one. If both sides, consumer and producer, are gaining from a transaction then we've got an increase in economic efficiency here. And the lovely thing about increases in such efficiency is that there's no obvious end to such a process.
The latest Wise results: “"Our strong growth and continued profitability are a direct result of our focus on our mission and our customers. This year approximately 10 million people and businesses chose Wise to move and manage their money internationally, an increase of 34% YoY. And in total, we helped these customers move c.£105bn across borders, up 37% YoY. This growth drove a 51% increase in revenue and a 73% increase in income for FY2023." Those are not weak results.
Wise share price from London Stock Exchange
There are, of course, many banking and finance operations out there. Most of which find out - the hard way - that lending to people is a great way of losing money. Because there's only a limited supply of people it is worth lending money too. Those willing to pay higher interest rates - as Adam Smith pointed out 250 years ago - are those who are unlikely to repay and therefore those you don't want to lend to.
Wise gets around this by simply not lending anything to anyone. It does currency conversions, money transfers. There are some card operations as well. But there is no lending book - therefore there can be no lending losses. The currency conversions are, by the standards of the normal banking system astonishingly cheap. Which is why people like us flock to use it and, as Wise says, once we're there we tend not to leave.
It is possible to think that the equity is currently fully priced. However, if you think you might benefit from significantly cheaper FX conversions and money transfers then try this link. If - if - you become a happy customer then yes, we'll get something. But this is something we use and we do like it.
