Transferwise Review 79

Currencies: 40+
Regulation: FCA
Speed: 1-2 Days
Transfer Method: Bank transfer

Transferwise is an international money transfer service that was founded in 2011 by two members of the early skype team. It is regarded London’s first fintech unicorn and is backed by high profile investors including top VC firms, paypal’s co-founder Max Levchin and Sir Richard Branson. The company provides money transfer services cross border through online and mobile platforms where customers can easily send and receive money, while saving considerably against bank charges and typically unfavorable exchange rates.

Info Table

Transferwise uses the mid-market exchange rate (Whenever funds are sent abroad via a bank transfer, there are many hidden fees involved. The real exchange rate (mid-market rate) is considered the fairest rate of all according to Reuters), and relatively low transaction fees to send money abroad, on a bank to bank basis. The idea is that sender sends funds to a local bank account and receiver receives the funds from a local bank account.

How Does Transferwise Work?

 

Transferwise VS PayPal

Comparing TransferWise with PayPal to know the value a customer stand to get using TransferWise, here are the outcome of the evaluation.

For £1,000:

Australia
The Real exchange rate of £1 as at the time is $AU1.68 AUD
TransferWise paid 1,655.73 AUD
PayPal paid 1,600.42 AUD

TransferWise paid 5.531% more

UAE
The Real exchange rate of £1 as at the time is 4.68 AED)
TransferWise paid 4,608.21 AED
PayPal paid 4,467.86 AED

TransferWise paid 14.035% more

Canada
The Real exchange rate of £1 as at the time is $CA1.68 CAD
TransferWise paid 1,655.34 CAD
PayPal paid 1,604.93 CAD

TransferWise paid 5.041% more

Switzerland
The Real exchange rate of £1 as at the time is CHF1.24 CHF
TransferWise paid 1,234.28 CHF
PayPal paid 1,184.66 CHF

TransferWise paid 4.962% more

Eurozone
The Real exchange rate of £1 as at the time is €1.14 EUR
TransferWise paid €1,134.79 EUR
PayPal paid €1,089.17 EUR

TransferWise paid 4.562% more

Bottom Line: TransferWise value was up 4.5% to 14.0% more than PayPal.

The concept behind Transferwise

The platform uses the peer-to-peer network to match transfers currency from a sender to a receiver. However, the system converts currencies using the mid-market exchange rate, thus alleviating one of the major pains of traditional cross border FX transfers with the banks.

The benefit of this money transfer service is that funds actually never have to move across international boundaries. This saves on currency exchange rate fees, bank fees, commissions, or international bank wires and the like. The process of transferring money is relatively easy. Simply navigate to the website and enter the amount of funds that you would like to transfer. It’s possible to send from a local bank account, debit card, and in some countries, through a credit card (though some processing fee will apply on credit cards).

Bottom line, foreign exchange (FX) rates can be drastically reduced in comparison with bank charges where money is actually moved overseas.

The Borderless Accounts 

  • Curious How Borderless Accounts Work?

How does one square up with a freelancer who recently completed a gig for your company, who just so happens to be located 10,000 miles away from you and who operates on a different currency? This is where Borderless Accounts comes in.

TransferWire’s latest feature enables users to make quick monetary transfers abroad to more than fifty countries across the globe. Borderless Accounts by TransferWire also gives users a way to better manage multiple currencies in a single location, and can even hold up to 27 currency balances.

  • What’s Borderless Account’s Advantage?

Other, popular payment transfer services are significantly more expensive, whereas Borderless Accounts by TransferWise offer an account with no setup, monthly, or international receiving fees.There is no exchange rate markup — meaning what you see on Google is the actual rate you’ll get for your money. Regarding timing of the transfer – through its network of banks, TransferWise can guarantee fast delivery, in some cases, same or next day.

When users send money to Great Britain, Europe, and the U.S., they also gain access to:

  • An account number and sort code for receiving GBP
  • An IBAN for receiving Euros
  • An account number and routing number for receiving USD

Essentially, these currencies come with a set of bank details. This enables users to make payments for goods and services abroad, just like a local would, and in the local currency.

  • Does it Work for Businesses?

Borderless Accounts are sort of like a replacement to traditional banks, and a great tool for businesses that process international payments, while eliminating the need for bank fees, and exchange rate fees. The company does charge for transactions, with what it calls a “more transparent fee.” This fee typically comes out to be significantly cheaper than that of competitors, and with no additional hidden fees.

Regulation

TransferWise is authorised by the Financial Conduct Authority (UK) under the Electronic Money Regulations 2011, Firm Reference 900507, for the issuing of electronic money. The company is also licensed by the local financial regulation agencies in:

  • Australia (ASIC)
  • Canada (registered in the AMF as a money service business)
  • Hong Kong
  • Japan
  • New Zealand
  • Singapore
  • United states (FinCEN)

 Customers personal information are stored in secured servers.

Practical Example

Transferwise routes payments not by transferring the sender’s money directly to the recipient, but by redirecting them to the recipient of an equivalent transfer going in the opposite direction. Likewise, the recipient of the transfer receives a payment not from the sender initiating the transfer, but from the sender of the equivalent transfer. This means that if Mark sends £1000 to Sarah in Euros, the system acknowledges Mark’s transfer, deducts a fee of £4.98 and pays Sarah €1,135.12 (£995.02 at current exchange rate of 1.14) from the transfer of customers that pay in Euros. This process avoids currency conversion and transfers actually crossing borders in the banking system (and thus avoiding the heavy costs associated).

Transferwise

 

Who should / Can Use TransferWise?

Freelancers, infrequent users, regular users and small enterprises will benefit from using Transferwise to send funds abroad. As a business, it is possible to transfer money overseas on a regular basis by using the services provided by Transferwise. The mid-market rates are especially beneficial, since they save money on international payments. Infrequent users can also benefit immeasurably from the money transfer services at Transferwise. It is safe, secure, and quick to transfer money abroad. Freelancers can also benefit from using Transferwise since many payments are made from abroad. The expensive bank rates and exchange rate fees are prohibitive when using traditional methods such as banks and PayPal. With Transferwise, freelancers can benefit from lower costs from contractors.

To avoid issues, make sure the money is coming from your own bank account, and make sure to include your membership number as the reference on the transfer. TransferWise does not accept cash or checks paid into their account.

Exchange Rate & Fees

TransferWise uses the same exchange rate you will find on Google, XE and Yahoo, so it is completely independent of banks or currency exchange providers. TransferWise currency converter allows you to check how much you should get when you convert your currency into another. The currency converter shows you the true mid-market exchange rate.

Exchange Rates

TransferWise issues Fee Credits to senders. A Fee credit is a discount on the fee for a transfer. It works across multiple transfers until the amount runs out.

Fees

Except for INR, USD transfer fee to other acceptable currencies are:

  • For transfers up to $300, a flat fee of $3 is charged.
  • For transfers up to $5000, 1% of the amount sent (so up to $50) is charged.
  • And on any amount over the initial $5000, the charge rate is 0.7%.​

So:

  • For a $6000 transfer, the charged fee would be 1% for the first $5000. Then for the additional $1000, the fee would be 0.7%. Summing the entire take to be 57USD (50 + 7).
  • For USD transfers to GBP, the flat fee is $3 up to $350, 0.85% of the amount a customer is sending up to $10,000, and 0.6% on any amount above the initial $10,000.
  • For USD transfers to INR, the flat fee is $2.70 up to $300 and above this, the fee is 0.9% of the amount the customer is sending.
  • For USD transfers to PHP, the flat fee is $5 up to $500 and above this, the fee is 1% of the amount the customer is sending.

TransferWise offers referral bonuses through the TransferWise referral program to interested users.

More so, an additional charge of 1.7% for customers using business credit cards for transfers from EUR and GBP. This charge is because the card companies charge the company an equivalent fee in order to process the transaction.

Is TransferWise Safe and Reliable?

In our judgement, TransferWise adheres to the strictest data security protocols. Being regulated by esteemed agencies around the world, and backed by top investors,  we judge it to be safe and reliable.

How Long Does a Transfer Take?

Typically, customers can expect the money to be transferred within 1 working day, or a maximum of 4 working days. The time taken to transfer money is dependent on the specific currencies involved, the hours of bank operation, and local bank procedures. Typically, the 3-step process requires setting up a transfer, converting the money into the desired currency (up to 2 working days), and sending the money via local bank transfer.

TransferWise Customer Support

Most queries can easily be resolved by clicking on the support center bar and typing in a question or a search term. The FAQs are comprehensive and include a wide range of technical, banking, registration and currency conversion solutions.

However, if an issue is not resolved through this process, clients can easily send an email or call the customer service line on the website.

Special Features

TransferWise is an internet company and as such, the user experience is generally modern and user-oriented, on both web and mobile apps. TransferWise apps can be downloaded from Google Play store and apple’s app store.
Other features of the website are:

  • Rate Alerts
  • Currency Converter
  • Mid-Market Rate
  • SWIFT/BIC Codes

Clients Feedback

Transferwise has received a rating of 9.5/10 from 37,125 reviews on TrustPilot.com. It got a 5-star rating from 89% of users, making this one of the most respected online money transfer services. Some selected reviews:

Victor Calleja says
“Fast and secure and very good rates”

Miriam said
“All fine!! Quick reliable service”

Alien also said
“CI always use TransferWise, the quickest, and the safest option”

In charges, exchange rate, and simplicity as in the opinion of Roger

“Cheaper than the bank. Simple to use once set up.”

Michael Allen opinion is
“Relatively easy to use, considering the complexities of an international bank transfer. The reporting and email notices are very helpful. Only disappointment was the high (~$56 or 1.2%) fee. The party receiving the transfer had told me to expect something around $10. So, in that specific case, I decided to pay by VISA and get our points (worth anywhere from 1.4-2.5% in value) as the merchant only levied a 1.5% surcharge to use a credit card.”

Grace Deri Pocock as well said
“the transaction is properly explained before I commit – exchange rate, result, fee, date of delivery. I like that. I also like comparing the fee to bank fees, a winner.”

The functionality of the app as described by Chris Samples is

“Incredible rates and an even more incredible service
The app is so easy to use”

Dominique experience wasn’t as merrier as he would have wanted, his feedback was

“Transferwise found an issue with my home address in the identification documents I uploaded, but it was an oversight from Transferwise, that they acknowledged quickly”

TransferWise was quick to reply Dominique saying

“Hi Dominique,

Thanks for the review. We are really sorry for the inconvenience and hassle caused, but indeed everything is sorted now and your account is verified with us. We’ll do our best to process all your future transfers as fast as possible.

Should you have any questions or need help we’re always here for you via https://transferwise.com/contact.
Cheers,
Silver from the TransferWise Team”

 

Main Currency Routes

TransferWise allows its customers to carry out online money transactions in more than 15 different currencies to avoid exchange rates.

These currencies are:

  • British Pound
  • Australian Dollar
  • Canadian Dollar
  • Swiss Franc
  • Danish Krone
  • Euro
  • Hong Kong Dollar
  • Hungarian Forint
  • Japanese Yen
  • Norwegian Krone
  • US Dollar
  • New Zealand Dollar
  • Polish Zloty
  • Swedish Krona
  • Singapore Dollar

Bottom Line

Transferwise is internationally recognized as one of the safest and most cost-effective means of transferring money abroad, especially for relatively smaller sums. The fees are minimal, and there are no hidden charges tacked on. It is relatively easy to register, fund your account, and transfer money abroad. Since it is fully licensed and regulated with many global watchdogs, it is safe and reliable to use.

Pros

  • FCA regulated
  • Quick and easy to use
  • Low fees and no hidden charges
  •  Up to 300 currency routes supported

Cons

  • Account setup can be difficult from certain countries/jurisdictions
  • Customer service can be blunt at times