One of the UK’s leading FinTech companies, Wise, could face a regulatory investigation over accusations of anti-competitive behaviour.
The claims have been raised by rival start-up, Atlantic Money, which has written to the Competition and Markets Authority (CMA) with concerns over conflicts of interest and anti-competitive practices.
A Brief Overview
Wise, formerly known as TransferWise, is a London-based FinTech company that was valued at nearly £9bn after its stock market debut in 2021, making it the largest tech listing in the UK.
Despite its success, the company has faced several controversies, including an investigation of its co-founder Kristo Käärmann by the Financial Conduct Authority for failing to pay taxes.
Atlantic Money’s Complaint
Atlantic Money’s complaint relates to Wise’s price comparison sites, which the company claims appear to be independent. The London-based start-up, founded by two former employees of US trading platform Robinhood, charges a flat fee of £3/€3 for money transfers and is said to be cheaper for some customers sending more than £650, according to MoneySavingExpert.com.
Wise originally listed Atlantic Money on its Wise.com price comparison page in October 2022, but removed the firm a week later. Atlantic Money was also refused entry to Exiap and Geldtransfers comparison sites, which Wise owns. The company claims that Wise is acting as a “gatekeeper” to the market, creating barriers to entry for cheaper and more innovative providers, and ultimately resulting in higher fees for consumers.
Wise claims that Atlantic Money is not the first provider to be removed from its price comparison list, and that this is part of regular reviews aimed at keeping the list useful for customers. The company said it had not been contacted by the CMA, while the regulator declined to comment on specific cases outside a formal investigation.
If the CMA finds the complaint to be valid, it could launch an investigation and impose a fine or order action by Wise if found guilty of wrongdoing.
In a statement, a spokesperson from Wise said: “We’re really proud to have the comparison tool as part of our website, and we’re not afraid to list cheaper competitors. We’ve done that for years and still do.”
“We decided to remove Atlantic Money for the time being for a number of operational reasons, including queries received from customers about their business. We take compliance with all applicable laws very seriously.”
Wise’s comparison tool does not always reveal the firm to be the cheapest. Using Wise for a £1,000 sterling-dollar transfer is less affordable than using Starling Bank, the website shows, while for a small £10 sterling-euro transfer, Wise comes third behind Remitly and Western Union.
The CMA was contacted for comment, but the regulator is unable to comment on specific cases outside of a formal investigation.
The allegations against Wise have raised concerns over anti-competitive practices in the UK fintech industry.
It remains to be seen whether the CMA will launch an investigation and what the outcome will be if the claims are proven to be true.