Bypass the big banks: Airwallex says new Yield product brings better returns home

Melbourne fintech unicorn, Airwallex has introduced a new ‘Yield’ product designed to provide returns on foreign currency for businesses without opening an overseas bank account.

Yield, which has the backing of JP Morgan, boasts the ability for Australian companies to earn 3.39% on Australian dollar balances and 4.07% percent on US dollar balances. Airwallex says this significantly outpaces major banks that, on average, 1.38% and 1.50% for AUD and USD business saver accounts, respectively.

The product also advertises the ability to earn in multiple currencies with no lock-up period.

According to Airwallex, Yield will alleviate a critical pain point for businesses, particularly startups, which often face hurdles in earning returns on funds held in currencies other than their own without setting up foreign bank accounts.

“The conversations we’ve had with customers have unearthed an overwhelming majority of businesses want greater flexibility and returns from a product like Yield,” Airwallex Australia and New Zealand Managing Director, Luke Latham, said.

“The current system leaves many businesses at a disadvantage, from the companies which raise money in USD and have no option in Australia right now to earn returns on those funds without converting them to AUD, to the businesses struggling with unexpected cash flow needs while funds are locked in a term deposit account.”

“It’s just one more way Airwallex is changing the way businesses do business in Australia.”

The fintech giant aims to assist businesses in scaling internationally with the promise of swift cross-border transactions.

“Interest rates have picked up significantly, and we want to help our customers do more with funds that might be sitting idle in their accounts,” Latham said.

“Yield means Australian businesses can earn a return on their surplus funds in AUD and USD and that they can escape the status quo that’s limited to banks locking up their funds with no flexibility and offering anemic returns.”

Yield is currently available to a select group of customers meeting a minimum initial investment threshold. The planned broader rollout in 2024 promises to cater to additional markets, customers, and currencies.

Airwallex, co-founded in 2015 by Jack Zhang and his university mates, achieved a valuation of $8.8 billion after a whopping $156 million funding round in November 2022, marking it as one of Australia’s most successful tech startups.

Having secured $1.4 billion across 12 rounds from a suite of investors including Square Peg, Salesforce Ventures, and Tencent, Airwallex has established itself as a leading player in the global fintech arena.

“From payments, treasury and spend management and now returns through Yield, Airwallex will keep expanding into new areas because incumbent banks are letting businesses down,” Zhang said.

“Whether it’s our recently released Bill Pay product that helps businesses automate the tedious process of paying domestic and international invoices or now Yield, Airwallex is continuously listening to what businesses need and building products so they can manage their finances more efficiently.”