There seems to be some misunderstanding on wise vs rely and about recipients in emerging markets, maybe because we don’t have many posters from emerging markets. First, the data point about the “unbanked” which has seemingly seen such incredibly reductions in many countries needs to be taken with a huge grain of salt. In India, for example, the vast majority of the new bank accounts were due to a push by the government, and more than half of these remain dormant. Cash remains king in India and the unbanked remain unbanked despite “having” a bank account. Source. Also, in many surveys the “banked” include people with a mobile money wallet like MPesa (you can’t transfer money from your bank account in the US or Europe to Mpesa for example).
On to Wise vs Remitly.
Wise is essentially a bank imo: (“Wise: the international account - money without borders”) - you can store value in your account, make deposits and payments to and from your account and it caters well to multiple recipients like a bank account. I’ve used it for 5 years (I checked; I opened the first account when it was still called Transferwise in 2018) and I have 1 account with quite a bit of money in there - it is for all intents and purposes a transactional bank account - the business side of it integrates with Xero, you can deposit money into your account via a third party sponsor bank, set up multiple users with different auth levels, set up scheduled and batch payments, manage various recipients etc. It’s a bank account, its got a card. The risk profile is that of a bank too imo and the target market is that of a bank. They also do remittances, yes, but their focus is that of a bank (you can do remittances with your bank too, it’s just expensive and a poor experience).
Remitly does not store your cash; it is not a bank. It takes your cash (you pay them via local payment rails) and they then give it to someone else in another country and they take care of the many different regulations in each and take a small cut for their trouble. It’s an app and workflow that only remits. It does not store. The target market, the workflow, everything is different to Wise. It’s also cheaper initially, as you get the fees discounted for the first couple remits which you don’t get with Wise (the rates are roughly the same, but there are fixed fees for each transaction).
Wise does not do what Remitly does well (and vice versa). I tried to use Wise to remit money to some destinations that I thought were interesting. From Euro to Kenya (not available), South Africa (not supported), India (only to bank account or UPI), Argentina (not supported), Thailand (Bank account only), Brazil (bank account only).
And then I checked the same via Remitly from Euro to Kenya (Mobile money - 3 different ones supported, Bank deposit, cash pickup), South Africa (Bank deposit, cash pickup), India (Bank, UPI, Cash pickup, mobile money), Argentina (Bank deposit, mobile money - 6 different ones incl Mercado Pago which we know, cash pickup), Brazil (Bank, Pix, cash pickup).
In short - Wise and Remitly are substitutes in the same way that a pickup truck and sedan are imo. But they don’t compete directly except for the remittance part of Wise’s offering, which is not on par with Remitly.
Remitly is disrupting the dinosaur Western Union and the banks! Don’t forget the banks - the original dinosaur. And they are in a class of their own ito the breadth of offering and the focus on remittances that they have. They are cheap, easy to use and offer ease of use for recipients - they give the sender wide choice to send the money to the recipient in the way/channel that works for them - be that cash, mobile money or bank account.
I’m keeping my small position.
-wsm