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Airwallex, a $5.6bn Singapore-based payments start-up, is preparing to seek banking licenses in the UK and US, with plans to expand into lending services and challenge global banks.
CEO Jack Zhang confirmed that the company intends to apply for a UK banking license, citing the UK’s fintech-friendly environment and the Financial Conduct Authority (FCA) as a top regulator.
Zhang also acknowledged the complexity of obtaining a banking license in the US, where numerous regulators exist. As a result, the company may pursue regulatory approval by acquiring a US bank.
Founded in Melbourne in 2015, Airwallex has grown in Singapore and provides global payment services, including banking for companies such as McLaren. The company has so far operated under payment licenses, which limited its ability to offer large-scale credit. However, it is now moving into lending, trialing a credit card in Australia.
In a statement, Zhang said that Airwallex would eventually offer all the services global banks provide, with the goal of displacing some of the biggest banks in the next decade.
Despite plans for a UK banking license, Zhang dismissed the idea of an IPO in the UK, focusing instead on a US listing due to the country’s more liquid and accessible capital markets. He noted that London still lags behind the US in capital access, despite efforts to make it more attractive for large companies.
The decision reflects a broader trend of UK companies opting for U.S. listings, drawn by higher valuations and deeper capital markets. Several companies have shifted from the LSE to New York, citing the US’s contribution to their revenues and generally higher stock market valuations. London-listed broker Plus500 Ltd (LON:PLUS) said it is considering a listing on a U.S. stock exchange following the City watchdog’s plans to shake up the rules companies must follow to list on the London Stock Exchange.
One of the changes proposed by the FCA is to allow companies to ignore best practices on corporate governance and still avoid being listed as “premium.” The FCA also aims to simplify regulations to make the UK more competitive with foreign stock markets and make it easier for candidate companies to enter the market. Additionally, there may be greater tolerance of dual-class shares and an exemption from holding votes on acquisitions. However, some are concerned that these changes could undermine shareholder rights.
