Airwallex, the Australian fintech known for its global payments infrastructure, is making a significant leap into the realm of in-person payments. This strategic move intensifies its competition with industry giants like Stripe, Square, and Adyen, as it seeks to establish a foothold in one of the remaining key areas of financial technology.
The company is set to unveil a point-of-sale (POS) solution that promises to streamline the process for businesses, allowing them to accept in-person payments across multiple countries from a single platform. This innovation eliminates the need for businesses to onboard local acquirers in every market they enter.
According to CEO and co-founder Jack Zhang, the traditional approach for businesses expanding internationally often involves navigating a complex web of compliance and vendor relationships. "When a business expands into a new market, they typically have to onboard a new local acquirer," he explained to TechCrunch.
Back in 2019, Stripe had offered to acquire Airwallex for $1.2 billion, a deal that Zhang initially considered. However, after reflecting on his vision for the company, he chose to continue building Airwallex independently. Founded in 2015, Airwallex emerged from Zhang's frustration with the inefficiencies of international money transfers and took a unique path by developing its own payment rails.
Today, Airwallex boasts an impressive valuation of $8 billion and claims an annual revenue of approximately $1.3 billion, growing at a staggering rate of 85% year-on-year. The company serves over 46,000 businesses in the U.S. and processes an astonishing $100 billion in annual transaction volume.
With nearly 90 regulatory licenses across 70 to 80 regions and connections to local payment networks in over 120 countries, Airwallex offers the ability to settle transactions in more than 90 currencies. Zhang emphasizes that this infrastructure gives Airwallex a competitive edge over Stripe and Square, particularly in holding and managing funds within local markets.
For instance, while Stripe and Square can process payments in Japan, they require immediate payouts to merchants' bank accounts, lacking the ability to hold funds. In contrast, Airwallex's license in Japan enables it to retain funds, a feature that enhances its appeal to businesses.
The launch of the new POS product extends Airwallex's capabilities to physical retail environments, seamlessly integrating in-store and online payments. This unified platform allows businesses operating in multiple countries to manage transactions and reporting from a single location without the complexities of local vendor arrangements.
In the U.S., Airwallex is investing $1 billion by 2029, a significant increase from the $150 million allocated in the previous five years. The challenge remains whether businesses currently aligned with Stripe or Square will be persuaded by Airwallex's global infrastructure advantages. Nonetheless, Airwallex is banking on the appeal of its solution for multinationals seeking to simplify their payment processes.
As Jack Zhang notes, "There's just not been a real competition to Stripe in the last 15 years, which is quite amazing considering how big the market is." This development could signal a new era of competition in the payments industry, potentially reshaping how businesses manage their financial transactions globally.
