Wise could be the next fintech darling in the UK after a rival startup claimed that the money transfer company stifled competition.
Atlantic Money, a London-based company, has written to the Competition and Markets Authority to express concerns about potential conflicts of interests and anti-competitive behavior after Wise prevented the firm from creating its own price comparison websites.
Wise (formerly TransferWise) could face an investigation. It was once the UK’s largest tech listing and was valued at almost PS9bn in 2021 after its stock market debut.
It would not be the first controversy at the company. Last summer, Kristo Kaarmann, its cofounder, was under investigation by the Financial Conduct Authority after he failed to pay his taxes.
Atlantic’s complaint is about Wise’s price-comparison sites. Atlantic claims they are independent.
Wise has a price comparison website on its own site that compares the fees and exchange rates of competitors, such as major high-street banks as well as Western Union and Starling Bank. It also has at least six other currency conversion and money transfer comparators sites, including Currencyshop, Geldtransfer, and Exiap.
Atlantic Money was founded last year by two ex-employees of US trading platform Robinhood. It launched in the UK, EU and Canada. The London-headquartered startup charges a PS3/EUR3 flat fee for money transfers, with MoneySavingExpert.com saying that the platform can be cheaper for some customers who are sending more than PS650.
Wise first listed Atlantic Money on the Wise.com price comparisons webpage in October 2022. However, the firm was removed last week. Wise informed the Guardian it had “decided that Atlantic Money was removed for the time being due to a number operational reasons, including customer queries about their business.” We take compliance with all applicable laws seriously.”
Atlantic was also denied entry to Exiap’s and Geldtransfers comparison websites, which Wise controls. The representative claimed in November that Atlantic Money is still in its early stages of building a public brand and reputation.
Atlantic has denied any concerns about its business. Although Atlantic has yet to disclose its profits, it said that it processed transactions in excess of EUR10m (PS8.8m), between July and October 2013.
Exiap also pointed out that Exiap’s website does not “investigate the solvency” of companies it mentions and that there is always a chance that a company will struggle to survive and go bankrupt.
Atlantic wrote to the CMA that “Wise acts as a gatekeeper to market and creates a substantial barrier for entry for cheaper, more innovative providers to set themselves up.” “This conduct is detrimental to competition in the UK and EU, and ultimately leads to higher fees for consumers.”
If the CMA is concerned about the complaint, they could open an investigation and impose a fine on the offending company or take action against them if they are found guilty.
Wise stated that Atlantic wasn’t the first provider to be removed form its price comparison lists. However, he said this was part in regular reviews meant to “keep the list useful for customers”.
Wise spokesperson said that they are proud to offer a comparison tool on their website. They also don’t hesitate to list lower-priced competitors. “We have done this for years, and we still do it.”
Wise stated that the CMA had not contacted her. CMA stated that it could not comment on particular cases without a formal investigation.