I think the more interesting part of Wise and where the real moat could be is “Wise platform”: https://platform.wise.com/
This allows other companies such as banks, fintechs and even software companies to embed Wise within their offerings to clients rather than re-building Wise infrastructure (which would take many years). The end-consumer doesn’t even realize that Wise is underneath.
Their Wise Platform customers consist of innovative companies such as Google Pay, Ramp, Bolt, Deel, Monzo but also several legacy banks that want to offer more competitive FX rates to their end-customers. In total, they now have 85 customers.
I am not sure how much of revenue is derived from the Wise platform (I think it’s still relatively small compared to overall revenue), but this is sticky revenue with switching costs. I agree that the P2P transfers are a race to the bottom with low switching costs (customers can use Wise one day, Revolut the next day and then Remitly the day after depending on who offers the best rate), although it’s complex to rebuild Wise infrastructure and even until now, Wise continuous to improve their infrastructure by getting access to more payment rails etc. so in that sense, catching up won’t be easy for a newcomer. The adjacent products (such as Wise debit card) & stock investing (in select countries) can also increase switching costs. As mentioned above, most legacy competitors are also facing the “Innovator’s dilemma” as a substantial part of their revenue is derived from excessive FX fees.
I have been a customer of Wise for many years. Initially I worked abroad and often transferred money to EUR. My wife is from Asia and sends money monthly to her home country. In general seamless experience that takes seconds to arrive (as opposed to days with regular bank transfers). I also use the Wise debit card when travelling as you can easily save 2-3% on FX fees with every transaction. No investment in Wise currently but definitely a stock I’ve been watching.