Airwallex becomes first payments company to obtain AFSL for expansion into retail investment products
Airwallex, the Australian-founded leading financial platform for modern businesses, has become the first major payments company to be granted an Australian Financial Services Licence (AFSL) by the Australian Securities and Investment Commission (ASIC) to offer businesses access to retail investment products. This is an additional licence from the AFSL that Airwallex has held for its existing payments and foreign exchange business since 2016.
The authorisation from the regulator formalises Airwallex’s move into investment products and signals the company’s evolution toward becoming an end-to-end financial services platform.
The announcement comes just eight months after Airwallex launched Airwallex Yield to wholesale customers, allowing them to earn attractive returns on their AUD and USD balances without having to open a foreign bank account – a first in Australia.
With this expansion, Airwallex Yield will be offered to the broader retail market – with a lower minimum investment requirement of AUD$10,000 (or USD equivalent) – from today onwards.
The expanded Airwallex Yield offering will allow customers to:
- Invest with a minimum investment amount of AUD$10,000 (or USD equivalent);
- Invest in funds that have historically returned more than triple the interest rates of saver accounts of the big four banks; currently a daily return of 3.67% for AUD balances and 3.95% on USD balances (compared to a 1.06% p.a. and 0.50% p.a. respectively) and;
- Avoid lock-up periods and easily move funds between their cash wallet balances and their Yield account, unlike term deposits.
With Airwallex Yield, customers can invest in a product that invests through a fund managed by J.P. Morgan Asset Management (J.P. Morgan), one of the world’s most trusted asset management firms. The J.P. Morgan underlying funds hold the highest rating from Standard & Poor’s at ‘AAAm’ grade, and equally high ratings from all leading rating agencies.
Since launching, Airwallex Yield has been available to businesses with a minimum investment of AUD $500,000 or USD equivalent. To date, Airwallex Capital Pty Ltd has attracted over AUD$100 million in funds under management from customers.
Airwallex Yield has been designed to be a competitive alternative for businesses because its returns more closely track the RBA cash rate than the rates on offer from traditional providers – a priority in this current high inflation environment.
Businesses could earn more than triple the amount of a saver account with a big four bank by investing with Yield. Yield’s underlying fund, JPMorgan Liquidity Fund, offers a daily 3.67% return on AUD balances and 3.95% return on USD balances, compared to an average of 1.06% per annum for business saver accounts with the big banks for AUD and 0.50% per annum for USD.
Airwallex SVP of Product Shannon Scott said the company was excited to expand Yield to help businesses capitalise on greater flexibility and returns, particularly during the current economic climate.
Scott stated, “We’re excited to expand upon Yield to position Airwallex as the modern alternative to banks for businesses of all sizes. This move into investment products underscores our role as a comprehensive financial services platform that can help businesses manage their finances more efficiently.
“It’s especially timely as Australian SMEs face economic challenges and rising costs. Yield empowers them with its flexibility, attractive rates of return and multi-currency capabilities – a solution businesses have been craving for years.”
George Boubouras, Managing Director, Research, Investments & Advisory at K2 Asset Management Ltd (an Airwallex partner and issuer of the Yield product) said, “Cross-border trading companies can benefit from exposure to money market funds that are currently taking advantage of the higher yields on offer due to the higher Fed Funds cash rate in the US and domestically the higher cash rate set by the RBA.
“The benefits of a blended single multi-currency cash account that offers exposure to multiple currencies in a single account can assist with lower transaction costs and shorter settlement times compared to traditional currency accounts that offer lower yields and are more burdensome.”
Also commenting on the news, Matthew Le, Head of South East Asia & Australia Sales, Global Liquidity, J.P. Morgan Asset Management, said, “J.P. Morgan Asset Management is delighted to partner with Airwallex. As a leading asset management firm, we have invested in our technology to evolve and meet the needs of financial service providers and the growing demands of customers today.”
