Cross-border payments unicorn Airwallex is launching a borderless card for businesses in partnership with Visa, signifying the next step in its vision of becoming “the AWS of financial services”.
While the $US1 billion business is known for its payments infrastructure that enables businesses to manage cross-border payments easily and cheaply, the company has its sights set on a bigger goal – becoming a platform business like Xero or Salesforce, which will see it look more like a neobank.
Speaking to The Australian Financial Review, chief executive Jack Zhang said the company’s strategy was based on the belief that within the next five years, new digital businesses would all be built using a core tech stack provided by the likes of Xero and Shopify. He wanted Airwallex to Airwbe the payments component of the tech stack, for both domestic and international transactions.
“We believe there will be an evolved tech stack in modern businesses … and that it will become very, very clear in the next three to five years. Who will play a bigger role in that modern business tool kit will be very interesting,” he said.
Airwallex’s new multi-currency borderless card will launch in Australia, before being rolled out in the UK and Hong Kong. They enable businesses to avoid being charged a couple of per cent in international transaction and exchange fees.
Airwallex holds the bank identification number, is the principle issuer of the cards and the cards are linked to a company’s Airwallex account.
By the end of March the company will also launch a physical version of the borderless corporate cards for businesses to provide to their employees. These will enable staff, when travelling overseas or making purchases from offshore merchants, to avoid paying the typical exchange fees.
As well as offering the cards themselves, Airwallex has created an application programming interface (API), which will enable it to sell a white label version of the cards that corporates could adopt themselves and give to their customers. For this, it has already had interest from international airlines and software companies.
The new borderless cards are similar to TransferWise’s multi-currency debit cards introduced locally in 2019, but are designed just for business use. Mr Zhang said the Airwallex cards also had more capabilities, such as letting businesses have as many cards as they wish with different transaction limits, and the API feature.
“For a business paying for Jira from Atlassian, it’s all charged in US dollars, and so if you’re not using a local card, you pay extra,” Mr Zhang said.
“This lets companies manage the currency wallet themselves and when they need to pay in US dollars, they can avoid extra charges. They don’t have to worry about international transaction fees or foreign exchange costs.”
Later this year, Airwallex is also set to launch a services marketplace – a key feature of its strategy to become more like Xero – where it will connect customers to other useful tools that integrate with Airwallex.
While Mr Zhang envisaged the company becoming like an international neobank with the breadth of services it will offer, he ruled out an expansion into lending.
“It takes three to five years to build an ecosystem. You need a lot of patience to grow it and you have to sacrifice short-term revenue for long-term compound growth … We have sufficient funding, which lets us run this approach,” he said.
“One advantage is that we have already built a powerful product suite … so we can be a neobank that’s more like Citi or JP Morgan, which supports large enterprise customers … [but unlike] banks with that sort of footprint we can also service small customers.”
In March 2019 Airwallex raised $US100 million in a round led by US investor DST Global, which has also backed the likes of Facebook, Airbnb and Spotify.
In the past year the company recorded revenue growth of more than 500 per cent and it achieved an annual run rate of $US10 billion in transaction processing volumes.
Mr Zhang expected to maintain triple-digit revenue growth for the next few years.
“Revenue growth will be faster than processing volumes because we have a lot of products we’re laying on top,” he said.
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