What Is Airwallex?

Tim DemetriouJuly 6, 2022Partners

How Does Airwallex Work?

Started by CEO Jack Zhang and several colleagues, Airwallex is still considered new to the financial solution scene but specialises in providing cross-border payments.

The focus is on global operations that span multiple time zones and borders across the world. Even though it has only been around for a few years, there are remarkable growth predictions for the future.

As a company, Airwallex is expanding rapidly and picking up high-profile accounts and clients around the globe.

For the small and medium-sized businesses in need of simplified financial solutions, the company delivers a suite of products that help to streamline global transactions.

Airwallex as a Digital Bank

The digital revolution has reached the finance industry, and things such as banking and money transfers are now automated and accessed electronically.

A digital bank is more than an online account. It is a financial institution that has no physical branch or office and operates entirely electronically.

Businesses can do everything from setting up an account to conducting transactions from anywhere in the world through an internet-connected device.

As a fintech platform, Airwallex improves upon the traditional international financial transaction processes to help growing businesses better manage their money both locally and globally.

Airwallex as a Cross-Border Payment Platform

Despite needing payments to secure transactions between businesses and consumers or in B2B sales, few people enjoy the hassle that comes from verifying or making international payments.

The general processes in place are disjointed and time-consuming, and the many variables that affect the exchange of money between countries further complicate the process.

International transactions are subject to changing fee structures, ever-shifting exchange rates and unpredictable time delays. This inefficiency isn’t just frustrating; it can hurt business.

Airwallex is an Australian start-up that is seeking to improve the process and remove concerns with cross-border transactions.

At the core of its platform is machine learning, which determines the settlement of international payments through the most cost-effective options. From the perspective of its founders, this platform is a cheaper, scalable and more efficient option for cross-border transactions.

This platform can be used by any business, regardless of industry or size. businesses can set up a direct account or integrate the company’s APIs with their own system.

Global Money Movement

This platform provides an alternative to big banks by offering a selection of local bank accounts in multiple countries and currencies.

Customers from anywhere in the world can register with the platform. The system offers over 50 currencies, and users can complete transactions in 130 different eligible countries.

Some of the options on the business registry include:

Hong Kong
Australia
United Kingdom
China
European Union
United States

While Global Accounts are given a unique account number, routing number and SWIFT code, the money is not stored in a bank vault where the collection point occurred.

Airwallex uses virtual collection points and holds transactions in the Wallet.

This digital system collects the funds from whatever currency the transaction used and waits for the user to exchange it into whatever currency desired.

Exchange Rates

The fluctuation of exchange rates is typically a source of frustration and risk for companies doing business internationally.

These rates move according to supply and demand, but financial institutions also vary in what they will offer.

There are several factors that help determine where to set foreign exchange rates across institutions.

These include:

Business and economic factors
Credit risk
Market risk
Expected rate of return
Current market conditions
Competing rates at other financial institutions

Airwallex provides favorable exchange rates, claiming to offer a fee between 0.5% and 1.0% above the interbank foreign exchange rates.

These market rates are the live conversion rates for a set pair of currencies, and with such a low fee structure, the Airwallex rates are quite competitive.

The live rate that users see when first checking on the market data might be slightly different from the final conversion rate after they confirm the transaction.

Fees

There are no monthly fees to use Airwallex, and there is no registration fee or required commitment.

When users conduct transactions in the Eurozone, they don’t have any fees. With currency exchanges, Airwallex charges a 0.1% payout fee for the Chinese Yuan as well as a transfer fee for using SWIFT.

For customers that only do business with local accounts in the countries where they conduct business, it’s possible to avoid a SWIFT transfer fee.

They can pay just the currency fee by transferring money between local accounts and then sending the payment directly from a local account to a recipient.

Airwallex as More Than a Bank

Though potentially seen as a digital bank, Airwallex does much more than the average bank. There are multiple business services offered for the SMB.

Easy transfers: Competitive exchange rates and zero international fees (though transactions could be subject to other charges or fees)
Multi-currency account: Options to send, save or collect money across multiple currencies without double conversions
Virtual debit cards: Virtual debit cards with customised spending limits and the ability to manage employee expenses
Xero integration: Synced multicurrency transactions and automated record keeping

User Interface

The account features for the platform are highly intuitive and very easy to navigate.

Using a browser dashboard or the Airwallex iOS app, users can check on account balances, convert funds between Wallets, manage payments and conduct transfers.

There are security features customised to the user, and unless required by law, two-factor authentication is one of these options.

For logging into the platform and initiating a transfer, 2FA is generally a requirement.

Expand Financial Support Beyond Airwallex

While a popular international payment gateway, Airwallex isn’t the only way to achieve more efficiency and accuracy in your B2B transactions around the globe.

When working with trade credit, PencilPay is a digital platform that gives suppliers all the tools and resources needed to oversee their trade credit.