Airwallex Reportedly Plans to Seek US and UK Banking Licenses

Singapore-based payments startup Airwallex reportedly wants to expand into lending.

To that end, the company, which offers AI-powered automated workflow solutions among other offerings, plans to acquire banking licenses in the U.S. and United Kingdom, CEO Jack Zhang told the Financial Times (FT) Monday (April 7).

“We are planning to apply for a UK banking licence, the UK is one of the most friendly markets for fintechs . . the [Financial Conduct Authority] is still one of the best regulators,” said Zhang.

In the U.S., however, becoming a regulated bank is “a lot more complicated,” Zhang said, due to the number of state licenses and regulators. That means Airwallex will likely try to win regulatory approval by purchasing a U.S. bank.

Founded a decade ago in Australia, Airwallex has since moved its homebase to Singapore. The company offers banking and multicurrency payment services for global businesses.

As the FT notes, Airwallex’s growth has mostly depended on payment licenses thus far, keeping it from offering credit at scale. It now wants to expand into lending and is piloting a credit card in Australia.

“Any product that a global bank has, we will have,” said Zhang. “Ultimately in a decade I think we’re going to displace some of the global banks.”

According to the FT, the company also hopes to eventually go public, though Zhang ruled out the idea of an initial public offering in the U.K.

“The US market is still the most liquid capital market and most accessible capital markets in the world,” said Zhang.

The CEO had previous projected that Airwallex — valued at $5.5 billion — would be “IPO ready” by 2026. It is not clear how current economic conditions would affect the company’s plans, with firms such as Klarna putting their IPO plans on hold.

In other digital banking news, PYMNTS wrote last week about research into the digital lending readiness of financial institutions, a term that refers to  the technological and operational capabilities that allow banks to process, approve and disburse loans digitally.

“The findings underscored a significant disparity in automation levels, with consumer lending processes being far more automated than those designed for small- to medium-sized businesses (SMBs),” that report said.

“While 70% of financial institutions report having mostly automated consumer lending, only around one-third have achieved similar automation for SMB lending.”