An In-Depth Review of Transferwise

transferwise review

If you’re searching for the most efficient way to wire transfer money overseas, you’ve probably heard of TransferWise. TransferWise is one of the many money transfer companies that work to provide you with honest, fair, and efficient wire transfer services. To help you make a decision about whether or not TransferWise is the company for you, this article will present an in-depth review of all the ins and outs of TransferWise. Let’s get started.

 

The Background of TransferWise

What better place to start a review than from the very beginning? TransferWise was founded in London in 2010 by two financial gurus, Taavet Hinrikus and Kristo Kaarmann, who both have impressive financial and business backgrounds.

Taavet Hinrikus was one of the founding members of Skype back in 2003, and has worked as an entrepreneur and investor for several other startup businesses.

Kristo Kaarman has a stellar financial services background working with Deloitte and PricewaterhouseCoopers. These two combined their talents and focused their energies to start a company that focuses on true and accurate exchange rates.

The investors that back TransferWise are equally impressive and include IA Ventures, Index Ventures, Seedcamp, and Kima Ventures, Virgin Group Sir Richard Branson, and PayPal founder, Max Levchin.

Since its inception, TransferWise has had 7 funding runs totaling over $396 million dollars. Their team includes over 23 bright employees, 5 board members, and TransferWise continues to grow.

 

How Does TransferWise work?

Now that you have a good idea of how TransferWise started, let’s talk about how it actually works.

TransferWise works by having you make a bank transfer to TransferWise through your borderless account. Once TransferWise receives the transfer, they exchange currencies in a transparent way, meaning you can always refer to their website to see exactly what the exchange rates are. If you are worried about the exchange rates, TransferWise also links the currency rates posted on XE, Google, and Yahoo right on their website for your reference. That way, you can check and compare currency rates whenever you want. Once the currency has been exchanged, TransferWise then makes a local transfer to the person you wired the money to on the other side.

TransferWise saves you money by taking a small percentage of the transaction, rather than having you pay a credit card transaction fee or a bank transfer fee. Bank transfer fees can be up to 5% in hidden fees, and TransferWise is touted to be 8x cheaper than banks.

 

What Are Hidden Fees?

Many banks and other money transfer services will often hide a fee in their currency exchange fee rate. These fees can vary anywhere from .3% up to 20%, depending on the service you select. Most banks and transfer services will charge a hidden fee when you are transferring money between currencies, and some companies bank on the fact that you won’t check the currency rates or look into the fee. Many banks and wire transfer companies aren’t transparent about charging the fee. Hence, it’s a hidden fee.

For example, on XE.com, the current exchange rate of 1 USD to a Euro is 0.84385, but on TravelEx, the exchange is listed as 1 USD to a Euro is 0.7681. The discrepancy is a hidden fee.
With TransferWise, you get the sending money via transferwise AUD to GBP

Example 2: EUR to USD

Now, let’s say you are sending 1,000 Euros to the United States. The wire transfer fee for this transaction would be .5% of the amount that is converted or 4.98 Euros. The mid-market exchange rate is currently 1.18500, so that comes to 995.02 Euros. This means the person in the United States will receive $1,179.10 USD.

sending money via transferwise EUR to USD

Example 3: CAD to EUR

Finally, let’s say you are sending 1,000 CAD to Europe. The wire transfer fee for this transaction is 1% of the amount that is converted or 9.90 CAD. The current mid-market exchange rate is 0.65565 or 990.10 CAD. Therefore, the recipient gets 641.78 EUR.

sending money via transferwise CAD to EUR

TransferWise has a handy online pricing tool where you can always price out your transactions before making a transfer.

 

What Are The Exchange Rates They Use?

TransferWIse uses real exchange rates. It’s also called the mid-market rate, interbank rate, and spot rate.

The important thing is not what it’s called, but what it is. The real exchange rate is the midpoint between the buy and sell rates on the global currency markets, which are always changing. It is the fairest rate, and the rate you will find on Google, Yahoo, and Reuters.

For some currencies, TransferWise offers a guaranteed rate, so you can make the wire transfer at the rates you planned on. These rates only work within a specific period of time.

 

How Long Does It Take For The Transfer To Arrive?

TransferWise works hard to move money as quickly as possible, but when you actually receive your money depends on a variety of different factors. This means there is no one standard guaranteed delivery date.

The Delivery Date Depends On:

  • The countries you are sending to and from
  • Your payment method
  • What time you pay for your transfer
  • Security checks

To get a better idea of how long it will take, visit the supported currency page and click on the currency in question.

For example, consider the CHF (Swiss Frank) and the RUB (Russian Ruble). It takes 1 working day to deliver money to a Swiss bank account, and 3 working days to deliver money to a Russian bank account.

 

Using TransferWise for business payments

TransferWise is also available for business payments. If you do wish to make transfers via your business, then you’ll need to set up a business profile with TransferWise. They will ask you for some basic profile information. Then, you’ll go through a verification process to make sure you are who you say you are.

Once your business profile is set up, you can start transferring money. Just remember if you set up your transfer as a business payment, then it must come from your business account.

 

TransferWise Competitor Analysis

If you’re not officially sold on TransferWise, don’t worry. There are plenty of other wire transfer companies that work as good alternatives including Ria Money Transfer, OFX, Western Union, Payoneer, PayPal, MoneyGram, traditional banks, Xoom, WorldRemit, CurrencyFair, Transfast, OrbitRemit, Paysera, Skrill, and TravelEx.

Here are some details from a previous article by Time Doctor on the hidden conversion fees and benefits:

hidden conversion fees

While there are several alternatives to TransferWise, you’ll notice the fees with TransferWise are low and the fact that they have no hidden fees is outstanding.

In short, if you’re looking for a comprehensive wire transfer company, TransferWise is a good way to go. They offer service to several countries and currencies. They also have no hidden fees and reasonable, transparent fees. Not to mention, the fact that they work off the mid-market exchange rate is fair and may save you money in the long run.

For more information about TransferWise, visit their website.

 
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Rob Rawson

Rob Rawson

Rob Rawson is a co-founder of Time Doctor which is software to improve productivity and help keep track and know what your team is working on, even when working from home.

1 Comment

  • Krissan says:

    I noticed that for China there are specific areas in China, no list was provided as to the places in China that is under TransferWise. Secondly I don’t see Jamaica as a recipient or sender?.

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