Airwallex, a global fintech leader with the vision to build financial infrastructure to scale the digital economy, has been granted an Electronic Money Institution (EMI) license from the UK Financial Conduct Authority (FCA).
The company was recently named by KPMG as one of the top 50 Global Fintech Companies of 2018, and the EMI license will further boost its growth by allowing operations throughout the EU by passporting through the region. Airwallex can then onboard clients across Europe countries, integrate with local banks to provide better financial infrastructure and provide payment services.
Airwallex has also applied for the new virtual bank license in Hong Kong, which would allow it to build one of the first challenger banks in Asia and beyond. Asia is becoming one of the hottest markets for payments and Fintech, and Airwallex sees an unprecedented opportunity to build a digital bank that can more than replicate the success of Monzo, Revolut or N26 in Europe.
The UK and Europe are high on Airwallex's list of priorities for international expansion, both on potential clients and access to world class talent. The company now plans to further expand its London office by the end of 2019, and sees existing pain-points insufficiently addressed by incumbent banks. The size of the global ecommerce market is forecasted to reach US$2.8tr this year and US$4.8tr by 2021. Serving these clients is a growing opportunity that Airwallex is looking to capitalize on, given the lack of efficient international payment solutions being offered.
Research in 2016 revealed that SMEs in the U.K. are spending nearly GBP 4.5bil in hidden fees to their banks for cross-border payments across the Eurozone. A small business with 20 or so GBP 10000 international transactions a month, for example, would pay an average of more than GBP 2100 a month in fees, with a large portion paid in foreign exchange. On the other hand, Airwallex strives to offer transparent, competitive wholesale rates to businesses by utilizing its proprietary FX engine and global banking network, and currently support payments to over 130 countries and 50 currencies.
Airwallex was co-founded in late 2015 by CEO Jack Zhang and four friends. "We ordered lots of materials from overseas for the coffee shop we were running," he says. "One transaction was US$15,000 (13000 euros) and we had to pay US$600 (500 euros) in foreign exchange fees. We said, this doesn't make sense. We can make foreign exchange much easier by innovating upon the underlying financial infrastructure."