Not only traditional banks are increasing fees, the British payment fintech is also making certain transfers more expensive – and tightening the conditions for custody fees.
Visa debit card from Wise
The British payment service provider offers transfers to other currencies comparatively cheaply. But now the fintech is increasing the prices for certain money transfers.
Frankfurt, New York The British payment service provider Wise is increasing the prices for transfers from the euro area. "The fees for transfers on our European routes have increased," says the website of the company, which is one of the most successful European financial start-ups (fintechs).
In addition, a fee, a kind of custody fee, of 0.9 percent on the multi-currency account now applies to private customers for sums above 3,000 euros. Previously, the limit was 15,000 euros.
Wise had informed users of the fee increase a few days ago. The new prices and the lower allowance have been in effect since Tuesday. A Wise spokesperson said: "We regret these adjustments and are working to bring our fees back down as soon as possible."
In the past there have already been individual fee increases. However, the average price fell between the third quarter of 2020 and the fourth quarter of 2021, for example.
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Wise, which was called "Transferwise" until just over a year ago, justifies the higher prices with additional verification checks and with the greater fluctuations in the foreign exchange market. The company spokesman pointed out that Wise takes its role and responsibility in the fight against financial crime seriously.
The measures for verifying customers are continuously being improved. "This can sometimes lead to rising costs."
Transfers from euros to dollars cost more
Specifically, for example, a transfer of 10,000 euros in which the recipient receives dollars now costs 47.32 euros – almost six euros more than before. Wise shows this change on its website, comparing the old and new fees by amount.
A corresponding transfer of 5000 euros incurs a fee of 23.93 euros – almost three euros more than before. If the recipient's account is outside the USA, an additional $2.90 will be charged.
Wise claims comparatively cheap and uncomplicated international transfers. Wise's multi-currency account allows users to hold money in 53 currencies and easily send and receive amounts in different currencies. It is a so-called payment account that is used for payment transactions, but not a checking account. You can also get a Visa debit card through Wise.
Many German banks and savings banks charge private customers minus interest of 0.5 percent, often above 10,000 euros or even 5,000 euros, and cite the European Central Bank's negative deposit rate of 0.5 percent as justification. However, Wise is significantly higher at 0.9 percent, and the exemption is relatively low.
The Wise spokesman said: "We are reacting to the ongoing low interest rate environment and the increased costs of holding larger amounts of euros for our customers." In numerous other currencies, money "can be held without limits and without fees".
In July last year, Wise went public in London via a so-called direct placement. The company, founded in 2010, reached a market value of 7.95 billion pounds (around 9.5 billion euros) immediately after the share placement. At the time, it was the largest IPO of a technology company in the British financial metropolis.
Wise slipped on the stock market
The share price had risen until autumn, but has slipped since then. The market value is currently only around 4.2 billion pounds.
In a direct placement, only the shares that existing shareholders wish to sell are traded. No new shares will be issued.
Wise was the first direct placement in London. In the USA, this form of IPO has been common for some time.
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