TransferWise has transformed from a simple money transfer provider to a complete banking alternative.
What is TransferWise?
TransferWise refers to an international money transfer company established in 2011 by Taavet Hinrikus and Kristo Karmann. This company is located in London but has offices in other parts of the world such as Japan, Hungary, Ukraine, the USA, and Estonia. Since it was launched in the year 2011, TransferWise has assisted more than five billion clients in making international money transfers. TransferWise is a money transfer platform that enables customers to receive substantial international payments without losing much money due to unfavorable exchange rates and excessive commissions. Apart from the online convenience, TransferWise offers additional services that help businesses make international payments to suppliers and employees.
How does TransferWise work?
TransferWise helps you spend, receive, and send money internationally to more than 70 countries at a low cost. Below is how TransferWise works:
In transferring money between various countries, TransferWise uses a peer to peer method. In this case, the peer-to-peer method implies that TransferWise uses their account holders’ funds to facilitate international bank transfers.
Take an example where you wish to send some money from Canada to your clients based in the US. Instead of transferring funds across the Canadian and US border, Transferwise will add your CAD currency to their account in Canada. After that, TranserWise will pay your recipient in the United States from their account held in the US. On the other hand, if there is someone from the US who wishes to pay a client in Canada, TransferWise will do a reverse transaction. The reverse transaction implies that TransferWise will use funds in their Canadian bank accounts and keep the USD currency in their US accounts. The good thing with the peer to peer strategy is that it eliminates the need to make money transfers across various borders, thereby reducing the transfer costs.
How to send money abroad with TransferWise
For you to use TransferWise services, you must create an account. The good thing is that the process of creating an account takes a few minutes. After opening an account, you can start to make transfers immediately through the following steps.
First, you must enter your necessary details, those of your recipients, and their bank details. It is not a must for the recipients to have TransferWise accounts, and they can be a charity or business. After that, you can verify your identity by uploading your ID and documents proofing your address. Typically, the verification process can take a maximum of two days. Therefore, you should complete this step before you make plans to send funds to your recipients.
You can fund your transfers using several methods such as wire transfer, SWIFT, online bill transfer, credit card, Android pay, Apple Pay, SOFORT, debit card, and bank transfer. You must know that not all currencies and countries are compatible with all kinds of payments. Therefore, you have the responsibility of reviewing forms of payments that work perfectly for your country and the country of your recipients.
Many people get afraid of using services that require a minimum and maximum transfer amounts. In this case, TransferWise has a minimum transfer of $1, which implies that you are free to send small amounts of money. On the other hand, if you wish to send a lot of money, there is no problem. TransferWise offers a maximum transfer amount of $1,000,000, which can be more than enough for many of your transactions. However, you must comply with your banks’ regulations, since some banks have limits of the amount you can transfer in a single day.
Is TransferWise safe?
Any money transfer company must meet a strict criterion to make it trustworthy and safe in the eyes of the customers. TransferWise has high-level security measures which include:
TransferWise uses the same practices adopted by banks in storing and encrypting customer information.
TransferWise has 24/7 digital security experts who continuously monitor all transactions to detect fraud and other malicious activities.
TransferWise adopts a two-factor authentication, which implies that other customers cannot access your account. Moreover, if you decide to use the TransferWise mobile application, you can switch on biometric features for additional security.
According to the Financial Conduct Authority regulations, the clients’ funds are held in segregated accounts. Therefore, when you use the TransferWise platform, you will be assured that your information and funds are always safe.
Is TransferWise regulated?
Yes. TransferWise is licensed and authorized as an Electronic Money Institution, which implies that it is regulated by the Financial Conduct Authority and Her Majesty’s Revenue and Customs in the United Kingdom. Other regulatory institutions in other states also license TransferWise. For instance, in the US, it is registered by the Financial Intelligence Unit to offer money transfer services.
- In India, it is authorized by the Reserve bank of India to facilitate remittances under guidelines set by this bank.
- In Hong Kong, it is regulated by the Customs and Excise Department
- In Canada, it is authorized by the Financial Transactions and Reports Analysis Centre of Canada as a legal money transfer company with a registration number of M15193392.
- In the European Economic Area(EEA) and Belgium, it is authorized as a legal institution by the National Bank of Belgium with rights of operations across EEA.
- In Australia, it is regulated by the Australian Securities and Investments Commission as a legal money transfer service provider.
- The individual American states also authorize TransferWise. In other words, TransferWise is always supervised by regulatory bodies in every state it operates.
Opening and maintaining an account with TransferWise in absolutely free. TransferWise bank cards and delivery are also free.
A flat fee is charged for clients who wish to transfer money under the same currency. However, the flat fee depends on the currency transacted. In many cases, the international transfer fee is between €0.5 to 2.0.
TransferWise does not charge ATM withdraws of up to £200 per month, but above this amount, customers incur a cost of 2%.
Additionally, TransferWise charges currency exchange fees for all international transfers. However, the fees charged depend on the exchanged currency but to range between 0.35 to 2% of the total amount.
TransferWise usually charges top-up base fees ranging between 0 to 0.2% and an additional charge for some countries.
The TransferWise borderless account review
The borderless account offered by TransferWise refers to a multi-currency account that enables customers to hold money in more than 40 currencies. Later on, customers can convert these currencies anytime they wish at the mid-market exchange rate, most probably when the rate favors them. A borderless account is the same as having local bank accounts across the world but in a compressed digital space. With the borderless account, you can get IBAN codes, SWIFT, account number, and a routing number you can easily use to accept and make transfer payments in your local currency. TransferWise makes money transfer between currencies is possible by charging low fees.
Once you open the borderless account, you will be given the first virtual bank account, your default currency. Notably, suppose you wish to have a local presence in any country. In that case, TransferWise will offer you a unique routing number or sort code and account number for the associated bank account. You will also be given personal account numbers, free TransferWise debit MasterCard and bank details.
The bank details offered by TransferWise are for AUD, New Zealand dollar, Euro, US dollar, and British pound sterling. However, TransferWise plans to add other significant currencies in the future. With the borderless account, you can receive money from more than 30 countries for free. At the moment, you can use the borderless account through the TransferWise app or website. All your vendors and clients can send, make, and demand payments in a similar way when using their local bank accounts.
TransferWise borderless Fees
When making a payment or receiving money in a local currency, you will not incur any fees. However, you will pay some fees when you wish to convert money between various currencies. Additionally, when adding money to your account using some credit and debit cards, you will pay some fees. If you transfer money from a regular account to your borderless account, you will pay a fixed fee of $1.30.
Advantages of the TransferWise borderless account
- Easy to add new currencies and countries to the account
- You will be given a free debit card.
- There are no monthly charges, setup fees, or charges for sending and receiving payments.
- You will get a virtual local bank account that allows you to send and receive payments in various currencies and localities.
Disadvantages of TransferWise borderless account
- The borderless account does not cover all currencies and countries, but TransferWise is still adding more.
- As a highlighted above, when making external transfers to a bank account, you will be charged $1.30
- The debit card is only limited to European customers.
At the moment, TransferWise does not have active coupons offers. However, you can check at their site regularly to take advantage of other money transfer offers.
TransferWise alternatives in our price comparison
There are so many money transfer companies that work as the best alternatives for TransferWise. Some of these companies include; Skill, TransferGo, Paysera, OrbitRemit, Transfast, CurrencyFair, WorldRemit, Xoom, MoneyGram, PayPal, Payoneer, Western Union, and Ria Money Transfer. While there are so many alternatives in the price competition, the good thing is that TransferWise charges minimal fees and does not have hidden fees. In short, if you wish to get a detailed online transfer company, TransferWise is the best choice for you. Notably, TransferWise offers services to many currencies and countries. TransferWise works against the midmarket exchange rate moderately, which can help you save a lot of money in the long run.
What is the TransferWise refund policy?
TransferWise can refund your full amount after you have made a payment, but you have canceled it before your recipient receives the funds. All you have to do is contact the customer support team immediately so that they can authorize your cancellation and refund.
Who can use TransferWise?
You can use TransferWise service for personal transactions such as sending money to your family members and friends. Freelancers and businesses of any kind (small, medium, or large) can also use it. Businesspeople are free to open an account so that they can receive money and also pay invoices. TransferWise simplifies issues by automating work using its API.
TransferWise Customer Service
There is a possibility that you might face some challenges when using TransferWise to send or receive money. The good thing is that TransferWise has the best interface, which is easy to use and rarely to customers face transfer issues. However, in case you face any challenge, TransferWise has the best customer service team, which you can ever think of. Apart from being responsive, the team offers customer support in many international languages. Additionally, TransferWise does not use automated chats, which are highly frustrating.
Pros of TransferWise
- High-level security measures
- It has a mobile app that is easy to use.
- The daily sending limit is high
- Highly affordable compared to banks and other money transfer platforms such as PayPal.
- Flexible payment options
- You will not be required to maintain a minimum balance in your account
- Intuitive interface
- Easy sign-up process and fast verification.
Cons of TransferWise
- Automated clearing house payments might be slower due to the two-step verification process.
- It is not the best option, especially when making large transfers exceeding $100,000.
- Recipients are only supposed to receive cash from their bank accounts.
Usually, when you are sending money internationally, there are middlemen such as banks who markup the spot exchange rate and then include other hidden charges, thus increasing your total expenses. Notably, TransferWise reduces the fees associated with international money transfers, has easy to use services, fast delivery, and offers the best features. The borderless account plus MasterCard simplifies spending, and the rate alerts assist you to know the best time you can transact with TransferWise. Additionally, the high level of transparency, security, and honesty displayed by TransferWise is indeed encouraging.