Banking News

TransferWise Wins Limited APRA PPF Bank Licence

(02 December 2020 – Australia) TransferWise has been extended a limited banking licence from the Australian Prudential Regulation Authority (APRA), granting the group enhanced access to the Australian market.

TransferWise’s purchased payment facility (PPF) licence, the first issued in over a decade since PayPal’s approval, is a unique authorised deposit-taking institution (ADI) allowance for a specific set of banking functions. The limited licence does not provide funds held with TransferWise the protection bank deposits of up to A$250,000 per account holder under the federal government’s Financial Claims Scheme however TransferWise must hold liquid assets against values held with its local entity. APRA granted the licence so that TransferWise can provide purchased payment facilities as a limited ADI under the Banking Act.

The new APRA licence helps TransferWise achieve its ambitious growth plans for Australia as it also applies for a settlement account with the Reserve Bank of Australia (RBA), bringing it into direct competition with the New Payments Platform (NPP) that currently directs real-time payments.

The global international transfer and FX company processes more than A$7.3 billion in cross border transactions each month and is seeking similar access in other payments markets globally. TransferWise was the first non-bank to gain direct access to Britain’s Faster Payments Scheme and to hold a settlement account with the Bank of England (BoE). This allowed the company to make transfers to and from the United Kingdom (UK) in under 20 seconds at lower transaction costs while the group also has direct access to European Union (EU) SEPA system.

“It took two years and a long process to secure the licence but it’s great to come to the end of the journey. The steps we have taken today which include taking on the additional regulatory requirements, are driven by our commitment to Australia, our mission, and to setting a new global standard to give millions access to truly competitive services, even if regulations have not kept up with the new breed of services fintech’s provide” said TransferWise Australia Country Manager, Tim Cameron.

“By becoming independent and cutting out the middle man, we’ll be able to save our customers even more money. This is really a springboard for future product improvements” Mr Cameron added.