Finance News

Fintech firm Smart is introducing a characteristic that permits customers to spend cash invested in shares

The Wise logo is displayed on a smartphone screen.

Pavlo Gonchar | SOPA pictures | LightRocket via Getty Images

LONDON – UK financial technology company Wise unveiled an investment feature on Tuesday that allows users to invest in stocks and spend their holdings across multiple currencies.

The new feature called Assets allows clients to invest in BlackRock's iShares World Equity Index Fund, which tracks a basket of 1,557 of the world's largest public companies. The fund's holdings include Apple, Amazon and Alphabet.

Users can also instantly spend up to 97% of the money invested in their accounts using a Wise debit card or send funds overseas. The idea is that customers can keep their money in stocks, but they can also spend and send the money in real time.

"Holding money in different currencies can be difficult to manage efficiently," said Kristo Käärmann, CEO and co-founder of Wise.

"Assets seeks to solve this problem by offering our customers the opportunity to get a return on their money with us in a variety of different currencies in one place."

Wise says that in the event of large market fluctuations, it holds 3% of the money invested by users as a "buffer" to keep customers' balances from falling into negative territory.

The company is initially launching assets for residential and business customers in the UK, but plans to launch the product in Europe at a later date.

Formerly known as TransferWise, Wise started out as a platform offering cheaper currency exchange. Since then, it has expanded its range of products to include multi-currency accounts linked to a debit card.

Wise is now launching investment accounts after getting UK regulators approval last year.

The company says its customers now hold a total of £ 4.3 billion ($ 5.9 billion) in balances around the world.

Boom among private investors

Wise's investment function is different from that of other fintech platforms like Robinhood and Revolut, which allow users to trade a wide variety of different stocks, often without paying commission fees.

With Assets, Wise users receive hundreds of stocks and can use their inventory to pay for goods or send money abroad in various currencies.

Wise charges an annualized service fee of 0.55% and a fund fee of 0.15% on the value of a user's assets, which are forfeited monthly in arrears.

The introduction of assets comes after a surge in the number of retail investors participating in the stock market as consumers sought alternative ways to get a return on their savings.

Earlier this year, amateur traders, inspired by a Reddit forum, flocked to GameStop, the video game retailer, helping fuel wild swings in its stock price.

It is the first major product update since Wise went public in London earlier this year. Instead of raising money on an IPO, the company's employees and investors sold their shares directly to the public.

The debut was seen as a big win for the UK, where the government plans to reform the London listing regime to make it more attractive to tech companies after Brexit.

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