It also reduced fees while maintaining 17% revenue growth and its full-year outlook.
The London-based cross-border payments company Wise (LSE: WISE), reported continued growth in its customer base and transaction volumes for the second quarter of fiscal year 2025, while also reducing fees for its users.
The number of active customers using Wise's services grew by 23% year-over-year (YoY) to 8.9 million in Q2, driven primarily by existing customers recommending the platform. This user growth contributed to a 20% increase in cross-border transaction volume, which reached £35.2 billion for the quarter. The headline numbers also increased compared to the previous quarter.
Wise continued its strategy of reducing fees to drive growth, with its cross-border take rate decreasing to 59 basis points, down 8 basis points from the same period last year. The company attributed 6 basis points of this reduction to lower prices and 2 basis points to changes in its business mix.
"We remain focused on our mission of building the best way to move and manage the world's money," Kristo Käärmann, Co-founder and CEO of Wise, commented on the results. "This will take time to fully achieve, but we are pleased with the progress made during the quarter, especially the additional regulatory approvals we have received in key markets."
Despite the fee reductions, underlying income grew by 17% YoY to £337.0 million in Q2. For the first half of FY25, Wise reported 19% growth in underlying income and maintained its full-year guidance of 15-20% growth.
The company highlighted several regulatory achievements, including expanded capabilities for outward transfers from India, an Australian Financial Services License for Investments, and a Payments Institutions license in Brazil.
"Firstly, in India, we secured approvals to further unlock outward transfers, removing a previous USD 5,000 cap," added Käärmann. "Secondly, in Australia, we have been granted an Australian Financial Services License for Investments. And finally, in Brazil, we were delighted to be given a Payments Institutions license."
Wise's underlying gross profit margin remained elevated at approximately 76% for the first half of FY25, reflecting the scaling of costs relative to volumes while continuing to invest in growth initiatives.
The company does not anticipate making further material investments in reduced pricing in the second half of FY25, expecting its previous investments to move it closer to achieving its medium-term target underlying profit before tax margin range of 13-16% in the second half.
As Wise continues to expand its global footprint and reduce fees, it aims to transition from "moving billions to moving trillions of cross-border volume" in the long term, according to Käärmann.
The London-based fintech company has been making strides in expanding its global reach and enhancing its service offerings through strategic partnerships and market entries.
In a recent development, Wise Platform has joined forces with AbbeyCross, a platform focused on improving connectivity and accessibility in global FX payments.
In another significant partnership, Wise Platform has teamed up with Qonto, a leading European business finance solution provider. This collaboration is set to bring fast, transparent, and cost-effective international payment services to over half a million SMEs and freelancers across Europe, further solidifying Wise's position in the European financial landscape.