After watching Wise’s recently released Capital Markets Day, it became clear to me that it probably shouldn’t be compared to companies like Revolut or Nubank. Not only is its current business model quite different, but more importantly, its future direction also sets it apart from other fintechs. Wise doesn’t fit into the same category as SoFi either. What I actually appreciate about the company is its extreme focus on one core offering: cross-border money transfers and payment flows. They seem committed to staying on this focused path — not diluting it with adjacent services — and are evolving into a pure-play payment infrastructure provider. Essentially, Wise is positioning itself as the backbone for global cross-border payments. In that sense, I don’t see it as comparable to today’s flashy fintechs, but rather as a clear disruptor of legacy players like Western Union or MoneyGram.
PayPal operates in a highly innovative and extremely competitive environment. Regardless of its potentially attractive valuation, I don’t see a clear path forward for PayPal — at least not one that convincingly shows how the company could be significantly better in the next years than it is today. I believe there would need to be substantial operational improvements for the market to close what might currently appear to be a valuation gap. In short, I find myself more in the ‘value trap’ camp than in the ‘opportunity’ camp when it comes to this company.
With PayPal, I find it difficult to identify a meaningful moat for the next 5–10 years. I also struggle to see how they plan to keep up with the developments and innovations of other companies on an equal footing — and right now, I simply don’t see it. On top of that, I lack the imagination for how PayPal could achieve above-average growth in payment volume, especially since there’s no clear indication that the company is focusing on or deliberately moving into new product areas. All of this makes it hard for me to build a strong investment case around PayPal at this point.
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Where do you place Wise in between the other fintech companies?
After watching Wise’s recently released Capital Markets Day, it became clear to me that it probably shouldn’t be compared to companies like Revolut or Nubank. Not only is its current business model quite different, but more importantly, its future direction also sets it apart from other fintechs. Wise doesn’t fit into the same category as SoFi either. What I actually appreciate about the company is its extreme focus on one core offering: cross-border money transfers and payment flows. They seem committed to staying on this focused path — not diluting it with adjacent services — and are evolving into a pure-play payment infrastructure provider. Essentially, Wise is positioning itself as the backbone for global cross-border payments. In that sense, I don’t see it as comparable to today’s flashy fintechs, but rather as a clear disruptor of legacy players like Western Union or MoneyGram.
Interesting! What about Paypal?
PayPal operates in a highly innovative and extremely competitive environment. Regardless of its potentially attractive valuation, I don’t see a clear path forward for PayPal — at least not one that convincingly shows how the company could be significantly better in the next years than it is today. I believe there would need to be substantial operational improvements for the market to close what might currently appear to be a valuation gap. In short, I find myself more in the ‘value trap’ camp than in the ‘opportunity’ camp when it comes to this company.
With PayPal, I find it difficult to identify a meaningful moat for the next 5–10 years. I also struggle to see how they plan to keep up with the developments and innovations of other companies on an equal footing — and right now, I simply don’t see it. On top of that, I lack the imagination for how PayPal could achieve above-average growth in payment volume, especially since there’s no clear indication that the company is focusing on or deliberately moving into new product areas. All of this makes it hard for me to build a strong investment case around PayPal at this point.
So, you don’t think that they are cheaply valued atm?
Was just about to ask the same question. I think Wise faces the risk of the growing adoption of stablecoins.
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To seed, build, and nurture timeless, intangible human capitals — such as resilience, trust, evolution, fulfilment, quality, peace, patience, discipline, relationships and conviction — in order to elevate human judgment, deepen relationships, and restore sacred trusteeship and stewardship of long-term firm value across generations.
A refreshing poetic take on our business world and capitalism.
A reflection on why today’s capital architectures—PE, VC, Hedge funds, SPAC, Alt funds, Rollups—mostly fail to build and nuture what time can trust.
Built to Be Left.
A quiet anatomy of extraction, abandonment, and the collapse of stewardship.
"Principal-Agent Risk is not a flaw in the system.
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Experience first. Return if it speaks to you.
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