Airwallex is about to rival Stripe and the rest of the payments industry — in the physical world

AirWalexthe Australian fintech company that spent a decade quietly building global payments infrastructure, is now moving into personal payments. The move deepens its rivalry with Stripe across the payments spectrum, and enables the startup to directly target Square and Adyen in one of the last major fintech battlegrounds.

Airwallex is launching a point-of-sale product that it says does something its competitors’ offerings don’t: allow businesses to accept in-person payments in multiple countries via a single platform, without involving local sellers in each market.

“When a company expands into a new market, it typically has to onboard a new local acquisition company, navigate fragmented compliance, and manage another set of vendor relationships,” Jack Chang, CEO and co-founder, told TechCrunch.

In 2019, Stripe offered to acquire Airwallex for $1.2 billion, while Airwallex had revenues of only $2 million. But Zhang decided to continue building. “I said yes to the deal,” he said, recalling the negotiations that lasted months. “But what really made me change my mind was when I actually came back to Melbourne and delved into what led me to build Airwallex.”

Zhang founded Airwallex in 2015 out of frustration with the friction and costs of moving money internationally, but he took a different approach than most fintech companies: He spent years putting together its core payment paths.

Today, Airwallex is valued at 8 billion dollars By its investors, it claims to generate annual revenue of about $1.3 billion, and that the number is growing by about 85% each year. The startup says it now serves more than 46,000 U.S. companies and processes $100 billion in annual volume.

The startup currently has approximately 90 regulatory licenses in approximately 50 markets, direct connections to local payment networks in more than 120 countries, and the ability to settle transactions in more than 90 currencies. Chang says it’s the same infrastructure that Stripe and Square lack in meaningful ways — particularly local banking licenses that allow funds to be held, transferred, and deployed within a given market rather than repatriated immediately.

“Stripe and Square can process payments in Japan, but when you actually process the payment, you have to pay immediately to the merchant’s bank account. You can’t hold the funds,” he said.

Airwallex’s license in Japan – which took seven years to obtain – enables it to do just that.

The company’s new POS product extends that infrastructure to the physical countertop. Its platform now connects in-store and online payments, offering consolidated reporting and direct integrations into back-office systems. For businesses that operate across borders, stores in different countries can operate the same payment and settlement systems in the same place, without the usual tangle of relationships with local vendors.

Adyen, the Dutch-listed payments company, makes a similar argument for global infrastructure, and is perhaps Airwallex’s most direct competitor in this space. At the legacy end of the market, Fiserv, along with the newly merged Global Payments and Worldpay, command huge market share among traditional retailers, even though their designs are much older.

Whether companies with established strip or square relationships will find the global infrastructure argument compelling enough to switch is an open question. Airwallex is betting that multinational companies tired of managing a different payments vendor in each country will prefer its product.

“There’s been no real competition to Stripe in the last 15 years, which is pretty surprising given the size of the market,” Zhang said.