European payments giant Wirecard, which has a market capitalization of more than $15 billion, is making a bet on freelance personal finance platform Xolo to increase uptake for its banking services.

Xolo is a subscription-based freelance accounting and banking platform that allows freelancers to manage cash flow and legal needs. The Estonia-based company did not offer precise customer numbers, but said it has reach among freelance workers in 100 countries, including all of the European Union. Xolo this month launched a bank account in partnership with Wirecard, which has a European banking license. The partnership will allow Wirecard to grow its customer numbers and fend off competition from digital-only challenger banks.

Kevin Brown, vice president of strategic partnerships at Wirecard, told Bank Innovation that the Xolo account meets a customer need and allows for interoperability across borders. The freelancer market is a nascent opportunity, one Wirecard said was valued at $204 billion in 2018, and has a compound annual growth rate of 17%.

“Customers previously needed a personal bank account in the SEPA (Single Euro Payments Area) to withdraw money from their Xolo account,” Kevin Brown, vice president of strategic partnerships at Wirecard explained in a statement. “Coordinating this transaction data involved more direct communication and manual input [from each freelancer].”

See also: Wirecard sets its sights on global expansion

Xolo is using Wirecard’s banking license for customers to open a business bank account within 48 hours, receive a debit card and manage cash flow, compliance and tax activity, make payments and send invoices through Xolo’s online operation center.

The Xolo tie-up is Wirecard’s latest effort to scale internationally through partnerships, including one with with UnionPay to craft new payment solutions for foreign visitors to China, and another white label banking app aimed at U.S. brands and retailers.

Francisco Alvarez-Evangelista, research associate at Aite Group, noted that digital banking startups can now easily build platforms on top of the additional infrastructure from back-end service providers, many of which are banks. It’s a model that’s allowed Green Dot to expand its reach across several brand partners. Wirecard, through its banking license and tech layer, offers a “banking as a service” toolkit to help companies like Xolo expand.

“One of the advantages that a company like Xolo has to [offer Wirecard] is they have an existing customer base,” he said. “Wirecard has been looking to leverage opportunities to reach across sectors.”

Meanwhile, the partnership helps Wirecard stay competitive and grow alongside competition from several digital-only challenger banks. David Gyori, the CEO of London-based consultancy Banking Reports, said the partnership is a win for both Wirecard and Xolo. Wirecard connects to Xolo’s customers who can benefit from a secure, licensed bank partner.

“Banking has always been an economy of scale, [companies like Wirecard] need to be profitable and competitive to grow,” Gyori said. “Companies will need a bigger and bigger client base to become sustainable – Wirecard is jumping in and competing with challenger banks.”

From Xolo’s perspective, the tie-up with Wirecard is an efficiency play, allowing customers to meet all of their financial needs in one place. With a partner like Wirecard, customers can take advantage of easy integration, onboarding and — ultimately — customer retention.

“It can accept inbound swift payments — customers see one view of income and expenses and can upload documentation like invoices. It becomes one integrated, very simple environment,” explained Xolo CEO Allan Martinson.

Wirecard additionally offers value-added services that include big data and analytics solutions, and according to the company, has 301,000 SMEs and enterprise clients across five continents.

Wirecard processed more than 671 billion transactions last year. In a recent earnings report, it confirmed that its reported revenue for the fourth quarter of 2019 was $906.8 million, up from $644.8 million for the same quarter the previous year.

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