Wise, the international money transfer platform, has announced that it has joined the New Payments Platform (NPP) in Australia to ensure that payments made from and to Australia would be done much quicker and cheaper as well.
It will become a participant and shareholder in the NPP and this would help it to cut costs of each transaction within the country drastically. By this move, it would be able to eliminate the third parties involved in the transfer process and this would in turn help to cut down costs. Though the company is regulated and licensed in many countries like Singapore, the UK, etc, in most of the countries, it has to rely on third parties like banks to enable it to process the to and fro payments. With such third parties involved, it becomes very difficult to cut down costs beyond a specific limit.
Though the company did not specify by how much this arrangement would result in savings for the end customer, it is learned that the company charges around 0.56% as transaction fees right now which is already much lower compared to the banks and other firms that perform similar transactions. The company expressed its intentions to reduce the cost of these transactions to as close to zero as possible which will be very useful for the bottom line of the company.
The global remittance market has been seeing some increased competition in recent times between the old players like Wise, Western Union, and others and also new players like Revolut and the companies must continue to innovate under these circumstances so that they can stay relevant. But at the same time, it might be costly to focus purely on fees as then it is likely to turn out to be a race to the bottom for the companies. It would be useful for the companies to focus on adding on new features and upgrades to their platform to make it more attractive for their users and it is believed that the increased competition would most likely bring in these changes as well. With the payments and remittance industries moving more towards digitalization and thus increasing the speed of the transfers and reducing the costs as well, it remains to be seen how these companies would diversify themselves to show that they are different from each other.
