Increased interest income: Perspectives from Revolut, Wise, and Payoneer – a look at the staying power of this trend
In a remarkable turn of events, fintech companies Revolut, Payoneer, and Wise have experienced significant growth in their interest income over the past few years. According to recent financial reports, both Revolut and Payoneer saw rises of over 1000% in their interest income in 2022, while Wise reported a 27% year-over-year (YoY) increase in the same period.
These impressive figures continued into 2023, with Revolut's interest income growing by 502%, Wise's increasing by 83%, and Payoneer's growing by 320%. In the first half of 2024, Wise saw a 27% YoY increase in interest income, while Payoneer reported a 5% YoY increase.
The growth in interest income is largely attributed to the companies' substantial customer account holdings, which have been benefiting from sustained, historically high interest rates. However, experts suggest that such strong growth may not continue indefinitely.
Wise, for instance, reported a 23% rise in customer balances overall in its calendar H1 results, with a 31% increase in consumer balances and a 12% increase in business balances. In its calendar FY 2023 numbers, the company saw a 28% overall increase in customer balances, with a 39% increase in consumer balances and a 15% increase in business balances. Payoneer, on the other hand, grew its H1 2024 customer balances by 9% YoY and saw a 10% YoY increase in FY 2023.
Despite the impressive growth, precise projections for interest income growth by 2030 for these companies are not publicly disclosed. The cross-border payments market, which is expected to grow from USD 222.23 billion in 2025 to USD 315.26 billion by 2030, may provide context for future revenue increases.
Revolut, recognised as one of the largest and most innovative fintechs globally, is a significant player in the cross-border payments market. Payoneer, another notable player, is currently exploring strategic options, including a potential sale. Wise, another leading fintech specialising in cross-border payments, has not detailed specific growth projections for its interest income.
It's worth noting that interest income may ultimately decline as a contributor of revenue for some players. For instance, Payoneer forecasted a $240m interest income for FY 2024, a rise of just 4% YoY, indicating a potential slowdown in growth.
The Bank of England recently made its first reduction to interest rates since March 2020, signalling a potential shift in the financial landscape that could impact these companies' interest income. Meanwhile, the US Federal Reserve Chair Jay Powell indicated that the "time has come" for US interest rate cuts last Friday, suggesting a similar trend in the United States.
For exact figures on the size of the cross-border payments market by 2030 or specialized market research on these companies, it's advisable to consult company financial disclosures or dedicated market research sources.
investors looking towards fintech companies like Revolut, Payoneer, and Wise may find attractive opportunities for business due to the significant growth in their interest income, with Revolut experiencing a 502% increase in 2023 and Wise a 27% YoY increase in the first half of 2024. However, experts caution that such growth may not continue indefinitely, considering the potential decline in interest income for some players and the possibility of shifts in the financial landscape.
