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

Airwallex, an Australian fintech company known for its innovative global payments infrastructure, is set to enter the realm of in-person payments. This strategic move intensifies its competition with Stripe and positions Airwallex to directly rival Square and Adyen in one of the most critical areas of financial technology. The company is rolling out a point-of-sale (POS) product that claims to offer a unique advantage over its competitors: the ability for businesses to accept in-person payments across multiple countries using a single platform. This eliminates the need for companies to engage local vendors whenever they expand into new markets. CEO and co-founder Jack Zhang explained the challenges businesses typically face, such as onboarding local acquirers and managing various vendor relationships. Back in 2019, Stripe expressed interest in acquiring Airwallex for $1.2 billion, when the company was still in its infancy with only $2 million in revenue. Zhang, initially open to the deal, ultimately chose to continue building his vision. “What really motivated me to change my mind was the reflection on our mission during a trip back to Melbourne,” he shared. Founded in 2015, Airwallex emerged out of Zhang's frustration with the complexities and costs involved in international money transfers. Unlike many fintech companies, Airwallex took the time to develop its own payment rails, which now underpin its offerings. Valued at $8 billion, the startup reports an impressive annual revenue of about $1.3 billion, growing approximately 85% year over year. Currently, it serves over 46,000 businesses in the U.S. and processes around $100 billion in transactions annually. With nearly 90 regulatory licenses spanning 70 to 80 regions, Airwallex has established direct connections to local payment networks in over 120 countries and can settle transactions in more than 90 currencies. Zhang points out that this infrastructure provides a competitive edge that Stripe and Square lack, particularly regarding local banking licenses that allow funds to remain within a market until needed rather than being immediately transferred back. For example, while Stripe and Square can process payments in Japan, they require immediate payout to the merchant’s bank. In contrast, Airwallex’s hard-won license in Japan enables it to hold funds, providing a crucial operational advantage. The new POS product will extend Airwallex’s infrastructure into physical retail environments, facilitating seamless integration between in-store and online payments. This unified approach allows businesses with operations in multiple countries to streamline their payment systems and consolidate reporting and reconciliation processes. Adyen, a publicly listed Dutch payments company, represents a direct competitor in promoting global infrastructure solutions. Meanwhile, legacy companies like Fiserv and the newly merged Global Payments and Worldpay continue to dominate the traditional retail market, despite their older systems. In the U.S., Airwallex has committed to investing $1 billion between now and 2029, a significant increase from the previous $150 million over five years. The challenge remains: will businesses entrenched in existing relationships with Stripe or Square see enough value in Airwallex's global infrastructure to make a switch? Zhang believes that multinationals frustrated with managing multiple payment vendors will be drawn to Airwallex's offering, stating, “It’s surprising that there hasn’t been serious competition to Stripe in the last 15 years, especially given the market's size.”