One of the UK’s fintech darlings, Wise, could face a regulatory investigation after a rival startup accused the money transfer firm of stifling competition.
London-headquartered Atlantic Money has written to the Competition and Markets Authority (CMA) to raise concerns over potential conflicts of interest and anti-competitive behaviour after Wise blocked the firm from a swathe of its own price comparison sites.
An investigation could be a blow for Wise, formerly known as TransferWise, which became the largest tech listing in the UK when it was valued at nearly £9bn after its 2021 stock market debut.
However, it would not be the first controversy to hit the company, after it emerged last summer that its co-founder Kristo Käärmann was being investigated by the Financial Conduct Authority for failing to pay his taxes.
Atlantic’s own complaint relates to Wise’s price comparison sites, which Atlantic says appear to be independent.
Wise runs a price comparison page on its own website that lists the transfer fees and exchange rates of rivals, including major high street banks, as well as Western Union, Starling Bank and MoneyGram. It also owns least six external currency conversion and money transfer comparison sites including Exiap, Geldtransfer and Currencyshop.
Atlantic Money, which was founded by two former employees of US trading platform Robinhood, launched in the UK and EU last year. The London-headquartered startup charges a £3/€3 flat fee for money transfers, with MoneySavingExpert.com saying that the platform can be cheaper for some customers who are sending more than £650.
Wise originally listed Atlantic Money on its Wise.com price comparisons page in October 2022, but removed the firm last week. Wise told the Guardian that it “decided to remove Atlantic Money for the time being for a number of operational reasons, including queries received from customers about their business. We take compliance with all applicable laws very seriously.”
Atlantic was also refused entry on to the Exiap and Geldtransfers comparison sites, which Wise owns, with the representative claiming in November: “Atlantic Money is still in the early stages of establishing its brand and building a public footprint.”
Atlantic has rebuffed concerns over its business. The firm has not yet revealed its own profits, but said it processed transactions worth €10m (£8.8m) between late July and October last year.
It also noted that Exiap’s website states it does “not investigate the solvency of companies we mention” and “there is always a risk that a company can struggle and go bust”.
“Wise is effectively acting as gatekeeper to the market and creating a substantial barrier to entry for cheaper and more innovative providers to establish themselves,” Atlantic said in its letter to the CMA. “This conduct is harmful to competition across the UK and EU and, we would submit, ultimately results in higher fees for end consumers.”
If the complaint were to raise concerns for the CMA, the regulator could launch an investigation and eventually impose a fine or order action by the offending firm if they are found guilty of wrongdoing.
Wise said Atlantic was not the first provider to be removed from its price comparison lists, but said this was part of regular reviews meant “to keep the list useful for our customers”.
“We’re really proud to have the comparison tool as part of our website, and we’re not afraid to list cheaper competitors”, a spokesperson for Wise said. “We’ve done that for years and still do.”
Wise said it had not been contacted by the CMA. The CMA said it was unable to comment on specific cases outside a formal investigation.