Fintech Spat: Wise Reported To CMA For Unfair Practices

January 30, 2023
Atlantic Money, a start-up money transfer firm, has filed a complaint with the UK’s antitrust watchdog over what it believes are anti-competitive practices by its larger competitor.

Atlantic Money, a start-up money transfer firm, has filed a complaint with the UK’s antitrust watchdog over what it believes are anti-competitive practices by its larger competitor.

Wise has delisted its cheaper competitor, a Financial Conduct Authority-regulated transfer provider called Atlantic Money, from its price comparison tool.

Atlantic Money is believed to be the first competitor to be removed by the UK-based fintech giant.

“Wise’s foundation is built on the promise of trust, transparency and doing the best for the people. It’s disappointing to see now that they become what they have always fought against,” said co-founder Neeraj Baid in a statement.

“We are even more convinced now that we are on the right track. People deserve to have a fixed price on their international transfers instead of paying more the more they send.”

The fintech, founded by two former Robinhood employees, has now submitted a complaint to the Competition and Markets Authority (CMA), while calling out Wise for a move “towards less transparency”.

“Visitors to their well-ranked sites will no longer see a significantly cheaper alternative for transfers than Wise, despite their promise to do so in their Mission and Philosophy Statement,” the company says in its press release.

Wise has also declined to list Atlantic Money on the numerous external price comparison sites that it owns, such as Exiap, creating a network of websites that Atlantic Money says “feign neutrality”.

“In the context of their latest earnings report and recent price rises, it seems they’re prioritising their own needs over their users,” Atlantic Money complains.

When approached by VIXIO for comment, a spokesperson for Wise said: “We’re really proud to have the comparison tool as part of our website and we’re not afraid to list cheaper competitors. We’ve done that for years and still do.”

Wise said that it decided to remove Atlantic Money for the time being for a number of operational reasons, including queries received from customers about the business.

“We take compliance with all applicable laws very seriously,” the spokesperson said.

In its CMA complaint, seen by VIXIO, Atlantic Money notes that discussions with Wise last year delivered “positive outcomes” and that it was listed on October 14. Meanwhile, “as expected”, the company said that it consistently ranked as the best option for sending amounts greater than around £750.

On January 19, Atlantic Money said that a senior member of Wise’s team contacted one of its co-founders to inform them that Wise would be delisting Atlantic Money from, which happened the following day.

“The rationale provided was that Atlantic Money is ‘no longer deemed a legitimate competitor’ by Wise,” the complaint says.

“It is not clear that anything specific happened between October and January to warrant such a drastic change in either its listing policy or our eligibility to be listed.”

Atlantic Money also said that it does not recognise Wise’s argument that it fails to meet legitimacy standards, suggesting that this is not convincing or defensible.

“In terms of regulatory protection and status, we hold identical regulatory licences to Wise (and indeed in the same jurisdictions — the UK and Belgium),” the complaint says, adding that the companies also have common investors, having both been originally backed by the venture capital firm Index Ventures.

Atlantic Money speculates that, in reality, customers reached out to try to understand why a provider they previously understood to be the first choice, no longer sat at the top of its comparison tool, adding that it is also reasonable to deduce that Wise suffered commercially by directing new and existing customers away from its platform towards Atlantic Money.

“It is in this context that we raise the possibility of poorly managed conflicts of interest and anti-competitive conduct by Wise, who when faced with a potentially threatening competitor who can beat them on price, has had to renege on its commitments to being transparent and prioritising the interests of its customers,” the company says.

The firm is now demanding that Wise implements a more rational eligibility criteria and communicates that to its customers.

It argues that these actions would include having Atlantic Money listed and/or reinstated in cases where the eligibility criteria is met.

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