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

Airwallex, the Australian fintech that has spent a decade quietly building global payments infrastructure, is moving into in-person payments. The move deepens its rivalry with Stripe across the payments stack, and enables the startup to directly aim at Square and Adyen on one of the last major battlegrounds in financial technology.

Airwallex is launching a point-of-sale product that it says does something its rivals’ offerings don’t: Allow businesses to accept in-person payments in multiple countries via a single platform, without onboarding local vendors in every market.

“When a business expands into a new market, they typically have to onboard a new local acquirer, navigate fragmented compliance, and manage yet another set of vendor relationships,” CEO and co-founder Jack Zhang told TechCrunch.

In 2019, Stripe offered to acquire Airwallex for $1.2 billion, when Airwallex had just $2 million in revenue. But Zhang decided to keep building. “I even said yes to the deal,” he said, recalling the months-long negotiation. “But what really got me to change my mind is when I actually flew back to Melbourne and went deep on what motivated me to build Airwallex.”

Zhang founded Airwallex in 2015 out of frustration with the friction and expense of moving money internationally, but took a different approach than most fintech: He spent years assembling its own underlying payment rails.

Today, Airwallex, valued at $8 billion by its investors, claims it generates annualized revenue of about $1.3 billion, and that the number is growing by roughly 85% every year. The startup says it now serves more than 46,000 U.S. businesses and processes $100 billion in annual volume.

The startup currently boasts close to 90 regulatory licenses across roughly 50 markets, direct connections to local payment networks in over 120 countries, and the ability to settle transactions in more than 90 currencies. It is the very infrastructure, Zhang says, that Stripe and Square lack in meaningful ways — particularly the local banking licenses that allow funds to be held, converted, and deployed within a given market rather than immediately repatriated.

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

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

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

Adyen, the listed Dutch payments company, makes a similar global infrastructure argument, and is perhaps Airwallex’s most direct competitor in this space. At the legacy end of the market, Fiserv as well as the newly combined Global Payments and Worldpay, command enormous market share among traditional brick-and-mortar retailers, though their architectures are considerably older.

Whether businesses with established Stripe or Square relationships will find the global infrastructure argument compelling enough to switch is the open question. Airwallex is betting that multinationals tired of managing a different payments vendor in every country will favor its product.

“There’s just not been a real competition to Stripe in the last 15 years, which is quite amazing considering how big the market is,” Zhang said.