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.

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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 mid-market exchange rate, and they offer a low, transparent fee structure.

 

What Currencies Can You Send And Receive Through TransferWise?

When working with TransferWise, it’s important to know what currencies you can send and receive.

TransferWise can SEND and RECEIVE the following currencies and corresponding countries:

  • AUD – Australian Dollar – TransferWise sends out and receives AUD via Australian local transfer
  • BGN – Bulgarian Lev – Within Bulgaria
  • BRL – Brazilian Real – Within Brazil – TransferWise can only send payments to or from private individuals within Brazil. Currently, they are unable to send business payments to or from BRL.
  • CAD – Canadian Dollar – Within Canada
  • CHF – Swiss Franc – Within Switzerland and Liechtenstein
  • CZK – Czech Koruna – Within the Czech Republic
  • DKK – Danish Krone – Within Denmark
  • EUR – Euro – TransferWise can send out and receive Euros anywhere within SEPA. The capital controls only allow a limited amount per customer to be sent out of Greece within one month period.
  • GBP – Pounds Sterling – Within the UK (including Gibraltar, the Channel Islands, and the Isle of Man)
  • HKD – Hong Kong Dollar – Within Hong Kong
  • HRK – Croatian Kuna – Within Croatia
  • HUF – Hungarian Forint – Within Hungary
  • JPY – Japanese Yen – Within Japan
  • NOK – Norwegian Krone – Within Norway
  • NZD – New Zealand Dollar – Within New Zealand
  • PLN – Polish Złoty – Within Poland
  • RON – Romanian Leu – Within Romania
  • SEK – Swedish Krona – Within Sweden
  • SGD – Singapore Dollar – Within Singapore
  • USD – US Dollar – TransferWise can only send out USD to checking accounts in the US. TransferWise can receive USD via ACH bank debit, domestic wire, and international SWIFT payment.

TransferWise can only SEND the following currencies to local banks:

  • AED – Emirati Dirham – Within the UAE
  • BDT – Bangladeshi Taka – Within Bangladesh
  • CLP – Chilean Peso – Within Chile
  • CNY – Chinese Yuan – Within China, from a limited list of countries (see here for the full list)
  • COP – Colombian Peso – Within Colombia – Transfers to Colombia are closed to new customers for the time being.
  • GEL – Georgian Lari – Within Georgia
  • IDR – Indonesian Rupiah – Within Indonesia
  • ILS – Israeli Shekels – Within Israel
  • INR – Indian Rupee – TransferWise sends out INR via RTGS, NEFT, TPT (as appropriate) to INR-denominated accounts in India.
  • KES – Kenyan Shillings – Within Kenya
  • KRW – South Korean Won – Within South Korea – Transfers to Korea are closed to new customers for the time being.
  • LKR – Sri Lankan Rupee – Within Sri Lanka
  • MAD – Moroccan Dirham – Within Morocco
  • MXN – Mexican Peso – Within Mexico
  • MYR – Malaysian Ringgit – Within Malaysia
  • NGN – Nigerian Naira – Within Nigeria
  • PEN – Peruvian Sol – Within Peru
  • PHP – Philippine Peso – Within Philippines
  • PKR – Pakistani Rupee – TransferWise can send payments to private recipients within Pakistan. Currently, they are unable to send business payments to PKR.
  • RUB – Russian Ruble – Within Russia (except Sevastopol and Crimea due to EU sanctions)
  • THB – Thai Baht – Within Thailand
  • TRY – Turkish Lira – Within Turkey and Northern Cyprus (as long as the IBAN begins with TR)
  • UAH – Ukrainian Hryvnia – Within Ukraine
  • VND – Vietnamese Dong – Within Vietnam

You can also send ZAR, the South African Rand, but only via SWIFT.

 

What Methods Can You Use To Send Money?

TransferWise recognizes there are several ways people and businesses move money. As such, they provide various ways to transfer money.

Bank Transfers are very common, and they include the following different types of bank accounts:

  • Bank Transfer
  • SOFORT
  • iDEAL
  • Trustly Instant Bank Payment
  • SEPA Direct Debit
  • SWIFT

Other Payment Methods TransferWise Accepts Include:

  • Credit card
  • Apple Pay
  • Android Pay

Keep in mind that not all countries and currencies are compatible with all types of payment forms. As such, it’s your job to quickly review which form of payment works best for the country you reside in and for the country you plan on sending money to.

 

How Does Someone Receive Money From TransferWise?

To receive money from TransferWise, you have to have a local bank account, and you must be willing to accept payment in a local currency. This means, with TransferWise, you will always be sending the money in the currency of your country and the recipient will receive the currency in their own currency.

For example, if you are making a USD to AUD transfer, the Austrailian dollars will only be paid to a local Australian account in Australia. This works the same for every country on the list where currencies can be received.

Remember, TransferWise is a money exchange company, but also a currency converter.

 

How Much Does It Cost?

The amount you will end up paying for each transfer will vary depending on how much you are sending and where you are sending the money. The reason it is always different is because the price for service is based on a percentage of the wire transfer fee. To make this clearer, let’s go through a few examples.

Example 1: AUD to GBP

Let’s say you are sending 1,000 AUD to Great Britain. The wire transfer fee is .7% of the amount that is converted, so 6.95 AUD. Then, the amount that is converted depends on the mid-range exchange rate, which is currently .56436, so that comes to 993.05 AUD. This means the person in Great Britain will get 560.44 GBP, that includes exchange rates and service fees.

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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