Wise, seeking ways to scale up its cross-border payments solution for financial institutions, has signed up its second credit union.
Andrews Federal Credit Union in Suitland, Maryland, will go live with the fintech’s instant cross-border payment technology by connecting with an application programming interface to the core services provider Q2 of Austin, Texas, later this year, Wise said Wednesday.
The integration will enable Andrews Federal's 134,000 members to initiate near-instant cross-border transfers through the credit union’s online portal and mobile app, providing an alternative to the credit union’s existing wire transfers. The $2.3 billion-asset Andrews Federal serves thousands of U.S. Air Force and Army members based overseas.
Wise has previously taken a one-off approach to integrating its services with financial institutions, including Stanford Federal Credit Union and a handful neobanks like N26, Monzo and Novo. Its work with Q2 marks the first time Wise has onboarded a client through a third party.
Wise, formerly called TransferWise, dove into the race to modernize banks' cross-border payment options two years ago when debuted Wise for Banks. The London company's competition includes fintechs and legacy providers like
“Working with platform partners is key to our growth now as demand for cross-border payments continues to rise, and many banks are looking for a way to replace wire transfers,” Ryan Zagone, head of Americas for Wise for Banks, said in an interview.
The pandemic drove higher demand for cross-border payments while exposing banks’ gaps in providing a consistent option for sending funds overseas, according to Zagone.
“Many banks still require people to come into the bank or send a fax for wire transfers, and while the number of people with a fax machine is very small, neither option worked during the pandemic,” he said.
Stanford Federal Credit Union in Palo Alto, California, was the first to go live with Wise for Banks last year, through a direct integration. The $3.3 billion-asset Stanford Federal’s core provider is Fiserv.
Because Stanford Federal Credit Union operates in a tech-centric area with about 5% of its 80,000 members being foreign nationals, the institution already had strong traffic for wire transfers through existing partners Western Union and Wells Fargo, Paul Jockisch, the credit union’s senior vice president and chief financial officer, said in an interview.
Members were typically full of questions about fees for wire transfers, which tend to vary widely, Jockisch said.
“One of the biggest reasons customers say they’re using Wise now is they can complete the whole process within our app and they know exactly what the fee will be before they commit to sending the funds,” Jockisch said.
In the 18 months since Stanford Federal added Wise, the credit union’s cross-border payments powered by Wise outnumbered wire transfers 15 to one, he said.
Wise offers international transfers to 80 countries. Stanford Federal supports the top 15 currencies, and one of the most popular corridors is funds sent from the U.S. to China, Jockisch said.
“When we added China's yuan as an option in late 2020, it really drove an increase in overall cross-border payment volume,” Jockisch said. Stanford Federal typically sees about 1,000 cross-border transactions per month, totaling more than $7 million in volume, he noted.
It took about six weeks for Stanford Federal to integrate Wise into its menu of services, but the onboarding process through core providers will likely go faster, according to Wise.
“What we’ve learned in the last two years is how to optimize the user experience, shaped by growing use cases for people sending funds to their home country during the pandemic and the expanding gig economy,” Zagone said.
In addition to working with Q2 to expand distribution, Wise recently signed on with the Switzerland-based bank software provider Temenos, which serves about 3,000 financial institutions.
