I use wise for GBP to THB conversions.. Their rates are increasing from 0.55% to 0.59%... that's a 7.3% increase. They are more likely to lose customers over this move. The fee for this convert was just 0.46% a couple of years ago, although 0.59% when I first started using them 5 years ago. On-line chats are currently suggesting many will move to alternatives. |
On a 2025 PE of 26.6.Seems high for a fintech issuing profit warnings and a sector with no moat. |
If they are dropping price it's because they cant compete on service. If they cant compete on service then they are done. |
I hope that they are able to win market share with this move and grow aggressively.
I was starting to be under the impression that Wise was becoming a more costly option and that I should look for alternatives to their service. Price sensitivity is big in this field, but doing this move was definitely not investor friendly. We will see the effect in the long-term results! |
Margin reduction will lead to a 19% reduction in 2025 profit forecasts and new 2025 EPS of 28p(according to Jefferies) |
They are reducing their rate to be more competitive. I'll have to listen to the webcast to find out what their thinking is behind it.
This was the only new thing out of the annual report. |
 This is why the stock dipped:
Over the medium term, we expect our investments to drive a continuing high level of customer growth, resulting in a 15%-20% CAGR growth in underlying income from a FY2024 base.
Underlying income growth in FY2025 is also expected to be within this range of 15-20%.
Improvements in efficiency were gained in FY2024 resulting in an inflated level of earnings and providing the opportunity to reduce our average cross-border pricing by more than 2 basis points, which was effective from early in Q1 FY2025. Adjusting for the connected nature of this outperformance in FY2024 and price reduction in FY2025, our expected growth would have otherwise been 20-25% in FY2025.
We have also initiated a second re-price in Q1 FY2025, off the back of a significant improvement in our cost allocation methodology, in order to ensure customers only pay in proportion to the costs we incur in providing the specific service. This is intended to be broadly revenue neutral overall, but will lead to price reductions for higher value transactions, particularly on main currency routes. |
what was the big trade at 08:05:40 BST GBX 700p 172,171 £1,205,197.00 UT
Unknown? |
eps of 34p so historic PE of around 20 with expected growth of 15-20% per annum.
Looks reasonably priced at the moment. |
Great buying opportunity in the early minutes - és usual. The expected growth slowing down to 15-20% causing a big drop in the morning. Let's see how it's come back in the afternoon! |
Wtf? Results read ok to me...guess mcap was too high |
Hi Kinwah, completely agree but the banks are much better at that now as is swift. The mobile interface is key. MoneyGram that’s a blast from the past. Along with western Union they were the criminals friends. I’m sure they’ve tightened up nowadays though |
Eagle, yes rate sensitivity is low down the list. I would put ease of transaction, reliability, easy AML requirements, no extra costs (intermediary banks and SWIFT fees) above it. I've tried Moneygram once which was enough to see why WISE is so much better. The transaction went into review never to re-emerge. |
So the argument that banks will do nothing is that they will lose money if they do. But if they do nothing wise will apparently take all their customers so they will lose money. Also hsbc launches zing/in app app to disrupt the wise market which means they also will be going after the banks which apparently won’t respond. As such wises addressable market is reduced. And to protect/ win back those customers who may have/might migrate(d). This is a more sophisticated market than many seem to think. Having run an fx remittance business for one of the major banks and tripled revenue in just two years I can tell you that rate sensitivity is only one of the key customer choice parameters. And not even no 1 with most customers. So WISE must be wise. It’s simply not the easy pickings some seem to believe. |
Wise have just informed me that they are putting their fees up by 25% based on the last transfer I did. They remain competitive and much easier and cheaper than doing a SWIFT transfer. That should help growth and profitability. |
HSBC's strategic decision to create a separate brand for it's money transfer proposition tells us a lot. Essentially, it means that HSBC doesn't want to make a competitive offer to all of their existing customers. They are thus having to bear the considerable additional cost of promoting a totally new brand.
This in contrast to WISE that has achieved both high brand awareness and captured the consumer market's association of their brand as the lowest cost provider. This means that WISE's new customer acquisition is being driven by 'word of mouth' rather than expensive advertising. Customer advocacy is powerfully persuasive.
Once you get to this tipping point you have established a pretty invulnerable strategic moat. |
Banks will never compete properly with the likes of WISE because their modus operandi is to gouge money from the lazy and inept. |
...yes but all the banks doing that today that would mean the banks would lose money? I think there is a window of opportunity for WISE over the next few years. |
Interestingly if you are an hsbc customer you don’t need to add zing. You simply add their global money account on the existing HSBC app. 30 secs of effort. The issue here is that if every bank does the same z(not very hard to do) and they price correctly where does Wise get its growth from? |
I have added for the first time as a hedg for high rates for longer. Does look like Zing charge a fee of 0.2% that is lower but everyone who is internal knows of WISE. |
Higher for longer is good for Wise!
I'm slightly concerned over increasing competition though. One would have to look into Revolut's finances to see how well they are doing.
HSBC Zing I hadn't even heard of it until recently. |
Jez, I'm the same as you on your first 3 points and the last one (HSBC are generally hopeless!), but valuation holds me back, particularly given the reduced trading momentum. This may of course throw up a great buying opportunity and I might miss it!! |
I use it.I love it.I will continue to use it.Others I think feel the same way, so I'm happy to buy in.Will I look at the HSBC competitive product? Absolutely not! |
Jefferies ups target again to £11.23. |
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