After spending a decade quietly building a global payments infrastructure, Australian fintech company Airwallex is moving towards in-person payments. The move deepens the conflict with Stripe across the payments stack, allowing the startup to take direct aim at Square and Adyen in one of the last major battlegrounds in financial technology.
Airwallex launches POS products with features not found in competitors’ products. This allows businesses to accept in-person payments in multiple countries through a single platform without having to deploy local vendors in every market.
“When companies expand into new markets, they typically have to bring on new local acquirers, deal with fragmented compliance, and manage yet another vendor relationship,” CEO and co-founder Jack Chan told TechCrunch.
In 2019, Stripe offered to acquire Airwallex for $1.2 billion when Airwallex had just $2 million in revenue. However, Zhang decided to continue construction. “I also said yes to the deal,” he said, recalling months of negotiations. “But what really changed my mind was actually going back to Melbourne and digging deeper into what motivated us to build Airwallex.”
Zhang founded Airwallex in 2015 out of frustration with the friction and costs of moving funds internationally, but he took a different approach than most fintechs. He spent years building his own underlying payment rails.
Currently valued by investors at $8 billion, Airwallex generates annual revenues of approximately $1.3 billion, and claims that figure is growing by approximately 85% each year. The company said it currently serves more than 46,000 businesses in the U.S. and processes $100 billion annually.
The startup currently has nearly 90 regulatory licenses in approximately 50 markets, connects directly to local payment networks in over 120 countries, and boasts the ability to settle transactions in over 90 currencies. What Stripe and Square lack in significance is the infrastructure itself, particularly local banking licenses that allow them to hold, convert and deploy funds within specific markets rather than immediately repatriating them, Chan said.
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“Stripe and Square can process payments in Japan, but in order to actually process the payment, it has to go into the merchant’s bank account immediately; they can’t hold the funds,” he said.
It took Airwallex seven years to get its license in Japan, but it allows it to do just that.
The company’s new POS product extends that infrastructure to the physical countertop. Its platform now connects in-store and online payments, offering consolidated reporting and direct integration into back-office systems. For companies that operate across borders, stores in different countries can operate on the same payment system and coordinate in the same location without the usual tangle of relationships with local vendors.
Adyen, a listed Dutch payments company, claims a similar global infrastructure and is perhaps Airwallex’s most direct competitor in this space. On the traditional end of the market, Fiserv and the newly combined Global Payments and Worldpay command huge market share among traditional brick-and-mortar retailers, but their architecture is quite old.
It’s an open question whether companies with established relationships with Stripe or Square will find it compelling enough to switch to the global infrastructure conversation. Airwallex is betting that multinational companies tired of managing different payment vendors in each country will prefer its product.
“There hasn’t been any real competition for Stripe for the past 15 years, which is quite surprising considering the size of the market,” Zhang said.
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