Wise Considers Becoming a Bank in the UK

Payments company Wise is reportedly weighing becoming a full-fledged bank in the United Kingdom.

The company has been in touch with experienced financial services executives in the last two months about roles in a future banking business, British newspaper The Times reported Monday (Sept. 1). The plans are in the early stages, as Wise has not yet applied for a banking license.

A spokesperson for Wise told PYMNTS the company does not comment on “rumors or speculation.”

Wise, originally called TransferWise, was launched in 2011 as a money transfer company. It rebranded to Wise in February 2021 to reflect that its services had branched out into other areas, including bank-like services such as debit cards and multi-currency accounts.

However, Wise is not a licensed deposit taker and operates under electronic money rules, meaning customer funds can’t be used for lending and must be ring-fenced, the report said.

John Cronin, a banking analyst at SeaPoint Insights, said it is “entirely plausible” that Wise would try to become a fully-fledged bank, according to the report.

“They could potentially look to convert the funds they safeguard into deposits, which they could then recycle into lending opportunities,” he said, per the report. “A banking license would give them direct access to the U.K.’s payment infrastructure, enabling them to reduce their reliance on third-party banks for clearing and settlement, potentially reducing costs and operational complexity.”

Wise applied in June to become a national trust bank in the United States. The move would allow it to bypass intermediary banks and settle dollar payments directly with the Federal Reserve, potentially reducing costs and leading to faster transfers, the report said.

Also in June, the company said it planned to move its primary listing to a stock exchange in the U.S. while maintaining a secondary listing on the London Stock Exchange (LSE).

The proposed dual listing would bring “substantial strategic and capital market benefits” to the company and its owners, Wise co-founder and CEO Kristo Käärmann said at the time.

“These include helping us drive greater awareness of Wise in the U.S., the biggest market opportunity in the world for our products today, and enabling better access to the world’s deepest and most liquid capital market,” Käärmann said. “A dual listing would also enable us to continue serving our U.K.-based owners effectively, as part of our ongoing commitment to the U.K.”