HSBC is stepping up its battle to lure customers away from digital upstarts such as Revolut and Wise with the launch of a foreign exchange payments app to spend, send and convert international currencies.
The Zing app, which is set to be available on the Google and Apple app stores in Britain from today, will allow users to hold cash in ten different currencies, to spend money “like a local” in more than 200 countries and to make international transfers at “competitive rates” across more than 30 currencies.
Crucially, it will be free to download for non-HSBC customers as the FTSE 100 lender puts a squeeze on the new generation of financial technology groups that have stolen market share amid increasing demand for cheaper travel and cross-border retail banking services.
James Allan, founder and chief executive, said Zing would provide “a new kind of international payments solution — one that combines cutting-edge innovation with the support of an experienced global bank”. He said it would help members to “live their best international lives”.
City analysts see the move as a defensive attempt by the global bank to compete with the digital disruptors that have soared in popularity in the past decade and to attract new users who it can then convert to other HSBC products.
Revolut, the cross-border payments platform, has built up more than 30 million users since its launch in London in 2015. It was named Britain’s most valuable private technology group in July 2021, with an implied value of $33 billion, although that figure has fallen significantly after writedowns by a number of key investors.
Wise was floated on the London stock market in 2021 at a valuation of £8 billion and its share price, after being bruised by the subsequent global technology sell-off, rebounded by 50 per cent last year. Its stock retreated by as much as 3.5 per cent yesterday.
Kristo Kaarmann, Wise’s chief executive, said that HSBC’s new venture could be “exciting for killing hidden fees”, adding that the new app “will surely have real exchange rates with transparent pricing if they’re serious about competing”.
Zing will be regulated by the Financial Conduct Authority as an e-money institution rather than as a bank. Its deposits will not be protected under the Financial Services Compensation Scheme but will be held in a separate bank account.
Both Revolut and Wise have benefited from rising interest rates, which have lifted their returns from the cash held in customer accounts. HSBC, which intends to roll its app out across international markets later in the year, said that interest would not be paid on cash balances but users would enjoy “transparent fees and competitive rates”.