Airwallex granted AFSL for retail investment products expansion

Airwallex 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 development marks an additional licence for Airwallex, which has held an AFSL for its payments and foreign exchange business since 2016.

ASIC's regulatory authorisation formalises Airwallex's entry into the investment product market, signalling the company's progress towards becoming a comprehensive financial services platform. The announcement follows just eight months after Airwallex launched Airwallex Yield for wholesale customers, which allowed them to earn returns on their AUD and USD balances without opening a foreign bank account—an industry first in Australia.

The company has expanded Airwallex Yield to the broader retail market, reducing the minimum investment requirement to AUD $10,000 (or USD equivalent). Since its initial launch, Airwallex Yield has maintained a minimum investment of AUD $500,000 or USD equivalent, attracting over AUD $100 million in funds under management.

The newly accessible Airwallex Yield offering allows clients to invest with a minimum of AUD $10,000 (or USD equivalent), earning daily returns of 3.67% for AUD balances and 3.95% for USD balances. This is compared to average interest rates of 1.06% per annum for AUD balances and 0.50% per annum for USD balances typically offered by the big four banks. Additionally, unlike traditional term deposits, Airwallex Yield avoids lock-up periods, permitting easy movement of funds between a cash wallet balance and a Yield account.

Shannon Scott, Airwallex's Senior Vice President of Product, remarked, "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."

Airwallex Yield's underlying fund, managed by J.P. Morgan Asset Management, holds the highest rating from Standard & Poor's, AAAm grade, in addition to equally high ratings from other leading agencies. These funds' performance has historically returned more than triple the interest rates of saver accounts from major banks.

George Boubouras, Managing Director of Research, Investments & Advisory at K2 Asset Management, an Airwallex partner, 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."

Matthew Le, Head of South East Asia & Australia Sales, Global Liquidity, J.P. Morgan Asset Management, added, "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."