How Wise & Revolut Actually Move Funds, FATF rule change implications

A common misconception in cross-border payments is that money physically “travels” overseas.

In reality:
💡 Money never crosses borders. Only messages and ledger entries do.

And the real difference between services like Wise and Revolut is which ledgers get updated — and who controls the network.

How Wise Works — Local Settlement, Not Cross-Border Sending

Wise holds local bank accounts in many countries.
When you send money:

1. You send funds to Wise’s local account in your country.
2. Wise pays your recipient from its local account in their country.
3. Your transfer does not have intermediary banks.
4. It’s essentially domestic inbound + domestic outbound, coordinated globally.

👉 This is why Wise can avoid intermediary fees and deliver faster transfers.

Important nuance:
Wise may use Swift or local payment rails behind the scenes for treasury rebalancing — moving funds between accounts they own when a corridor becomes imbalanced.

But this is:

• internal,
• batched,
• not pacs.008 user transfers,
• and not part of your payment.
  Your individual transfer still settles locally.

How Revolut Works — Multi-Currency Wallet + Traditional Banking Rails

Revolut functions more like a digital wallet:

1. You hold multiple currencies inside one account.
2. You convert them at interbank rates within your allowance.
3. When sending money externally, Revolut chooses the appropriate rail:

• Revolut → Revolut: instant, internal
• EUR transfers: SEPA
• International transfers: SWIFT (with correspondent banks)

So Revolut’s internal transfers are modern,
but its external transfers still rely on the existing banking system

Additional Perspective: How Upcoming FATF Rules May Affect Wise’s Model

For example, consider a transfer from UK → Japan using Wise:
Bank A → Wise UK → Wise Japan → Bank B

Wise settles this as local-in, local-out transactions rather than a single cross-border wire.

However, under the revised FATF Recommendation 16, expected to be fully implemented by 2030, payment service providers like Wise Japan will be required to transmit full originator and beneficiary information to the receiving institution Bank B

This means that Bank B in Japan would need detailed sender information from Bank A, and Wise Japan would be responsible for ensuring that this data is properly attached and transmitted, regardless of Wise’s domestic-settlement model

(related article on NIKKEI )

国際送金のマネロン対策、住所など通知義務付け　FATFが要請 - 日本経済新聞

世界のマネーロンダリング（資金洗浄）対策の国際基準をつくる金融活動作業部会（FATF）は国境を越えた送金に関する規制を強化する。銀行や国際送金サービスを担う資金移動業者に、誰から誰への送金なのか明確にするよう求める。デジタル技術の進展でクロスボーダー（国際）送金がマネロンに悪用される事例が増えており、取引の透明性を高める。FATFはこのほどフランスで開いた総会で、40のマネロン審査方針のうち国

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