Is Wise a Legit Company? How Your Money Is Kept Safe

Wise, formerly known as TransferWise, is a global technology company specializing in international money transfers and various financial services. This article explores the facets that confirm its legitimacy and trustworthiness for financial transactions, emphasizing the importance of trust, security, and reliability when selecting a financial service provider.

Regulatory Oversight and Licensing

Wise operates within an extensive regulatory framework across the many countries it serves, indicating its legal legitimacy. It functions as a financial institution, though not a traditional bank. Wise is typically regulated as a Money Services Business (MSB) or an Electronic Money Institution (EMI), depending on the specific jurisdiction.

In the United States, Wise US Inc. is registered with the Financial Crimes Enforcement Network (FinCEN) and renews this registration annually. It holds licenses as a money transmitter in various states and is supervised by state regulatory authorities and the Consumer Financial Protection Bureau (CFPB). In the United Kingdom, Wise Payments Limited is authorized as an Electronic Money Institution by the Financial Conduct Authority (FCA), operating under strict guidelines.

Wise Australia Pty Ltd. is regulated by the Australian Securities and Investments Commission (ASIC) and possesses an Australian Financial Services Licence (AFSL). It is also authorized by the Australian Prudential Regulation Authority (APRA) as an Authorised Deposit-taking Institution (ADI). Across the European Economic Area (EEA), Wise Payments Limited is authorized as an EMI by the National Bank of Belgium (NBB). These regulatory requirements mandate strict capital provisions, comprehensive anti-money laundering (AML) and know-your-customer (KYC) compliance protocols, and regular audits by financial authorities. This extensive regulatory compliance ensures Wise operates legally and adheres to high standards of financial conduct.

Safeguarding Customer Funds and Data

Wise implements measures to protect customer funds and sensitive personal data. For customer funds, Wise employs a “safeguarding” approach, holding customer money separately from its operational capital. These funds are placed in segregated accounts at reputable financial institutions. In the United States, customer funds are held as cash deposits in leading commercial banks, such as JPMorgan Chase Bank, N.A., and Goldman Sachs Bank USA, or invested in secure, liquid assets like government bonds.

This safeguarding ensures customer money remains protected and accessible, even if Wise faces financial difficulties, because it is not lent out like deposits in a traditional bank. While this differs from deposit insurance schemes such as FDIC in the US, it provides a comparable layer of protection for customer balances. Wise utilizes encryption technology, including Transport Layer Security (TLS), to secure information during transfer and storage. This process scrambles sensitive data to prevent unauthorized access.

The company employs two-factor authentication (2FA) to enhance account security. Regular penetration testing and independent audits are conducted to identify and address any potential vulnerabilities in its systems. Wise maintains dedicated fraud prevention teams and deploys advanced systems that continuously monitor transactions for suspicious activity. Robust verification processes are in place to protect against unauthorized access and potential scams.

Operational Transparency

Wise’s commitment to clarity and openness in its business practices significantly contributes to its legitimacy and trustworthiness. A core principle of Wise is its use of the mid-market exchange rate, often referred to as the “real” exchange rate. This rate represents the midpoint between the buy and sell rates on global currency markets, and Wise obtains it from multiple independent providers, updating it in real-time during market hours.

Wise distinguishes itself by making its fees explicit and upfront, ensuring there are no hidden markups within the exchange rate itself. This transparent fee structure contrasts with practices where costs might be concealed within an adjusted exchange rate, providing customers with a clear understanding of what they are paying. The transaction process is also designed for clarity, offering features such as real-time transfer tracking and clear communication regarding status updates. Customers receive predictable delivery times for their transfers.

This consistent commitment to clear communication and honest pricing differentiates Wise within the financial services industry. By fostering trust through predictable and understandable service, Wise reinforces its legitimate operations.

Company History and Financial Stability

Wise, originally established as TransferWise, was founded in January 2011 by Kristo Käärmann and Taavet Hinrikus. The company’s initial mission was to provide a more cost-effective solution for international money transfers. Over time, it expanded its services beyond simple money transfers, leading to its rebranding as Wise in 2021 to better reflect its broader financial offerings.

The company has experienced significant growth, transforming from a startup into a major global financial technology firm. Wise now serves over 12.8 million customers worldwide and processed approximately £118.5 billion in cross-border transactions in fiscal year 2024. Its operations extend across more than 70 countries, demonstrating a substantial global presence.

Wise is a publicly traded company, having completed a direct listing on the London Stock Exchange (LSE) in July 2021 under the ticker symbol WISE. This public listing indicates its adherence to rigorous reporting standards expected of publicly listed entities. The company has also shown strong financial performance, with profit before tax increasing by over 200% to £481.4 million in FY2024, and revenue growing by 24% to £1,052.0 million in the same period. Its consistent profitability and robust financial position contribute to its standing as a credible and innovative participant in the fintech sector.