Transferring money overseas is something we all need to do from time to time. It’s an age-old problem, but that doesn’t mean it’s gotten any easier. Despite a range of solutions being a click away, with so many options to choose from, it’s hard to know which service is right for you.
If you are like me, you’re searching for a way to transfer money abroad without losing too much in fees, commissions or exchange rate spread. There is nothing worse than trying to save money in your home country or send money to friends or family, and losing a large chunk of it in the process.
I have been using the banks to send money back home to Australia, until recently, when a work colleague suggested I try TransferWise. To be honest, I’d never heard of them before. But now, after over a year of faultless service, I’m happy to say that TransferWise is a winner in my book.
TransferWise, a global money transfer solution
Enter TransferWise, the new kid on the block. Armed with rock-bottom fees and a transparent business model, they offer an innovative crowd funding solution to international money remittance. After gaining a lot of investment support from the likes of Richard Branson, and having facilitated over $3 billion in payments so far, TransferWise is notching up its fair share of achievements.
TransferWise is a currency exchange service for the next generation, lead by its charismatic founders, Kristo Käärmann and Taavet Hinrikus (one of the first employees at Skype). The company has been established on the belief that that we all need to move money around, and there is no reason why anyone should incur extravagant fees to do so.
This means that by using TransferWise, you can save hundreds of dollars in fees even with the smallest of transfer amounts. For you, that means more money in your pocket to do what you want, when you want to do it. And while TransferWise is targeted specifically at retail customers like you and me, it is also a convenient solution for many businesses moving money internationally.
How does it work?
TransferWise works by using a network of people trying to do the same thing as you – that is, of course, sending money abroad. Instead of actually physically exchanging your money, as traditional banks do, TransferWise holds bank accounts in a number of countries and currencies and uses their customer’s to facilitate currency trades between each other.
The reason why this solution is so economical is because “your” money never actually leaves the country — it’s simply rerouted to those who need it. TransferWise acts as a platform to enable this swap for a small fee, through the use of their proprietary software and accounting network. Not that you’ll ever know any of this because they make it so easy for their customers to use.
For example, if you would like to transfer British Pounds into US Dollars, TransferWise will match your request with someone trying to do the exact opposite, i.e. transferring Dollars into Pounds. That way, instead of physically exchange your money, TransferWise simply transfers your Pounds to the other person and their Dollars to you. The result is everybody wins, at a fraction of the cost of traditional methods.
TransferWise’s brilliance is that its customers never have to deal with this peer-to-peer complexity. It’s incredibly straightforward and has built a devoted fanbase off this ease of use. If you study at a university overseas or have family living in another country, it’s quite simply the best way to send money to and from any international destination.
A market leading service
I’ve had some excellent results with TransferWise over the past twelve months, as I send money back to Australia from Europe. Here are a few things which I think make it stand out as a market leading service:
Best rate guaranteed
TransferWise promises its customers transfers at the mid-market exchange rate, which is just about as good as it goes. To ensure that you’ll be happy, they even have a “cheapest money guarantee”. What this means to the everyday customer is that if you receive a quote from another provider, offering a better deal than the mid-market rate, they’ll match it or refund the difference.
Instead of hidden fees of up to 5% charged by traditional services, TransferWise charges a small transparent fee, amounting to 0.5% of the transferred amount – the equivalent of paying 50 cents for every $100 transferred. That’s it! No variable fees, no exchange rate spreads. Just an honest and transparent service.
TransferWise is growing into a truly global company, already supporting over 27 currencies around the world, including the market’s largest pairings such as US Dollars, British Pounds, Euros, Indian Rupees, Swiss Franc, Hong Kong Dollars, Japanese Yen and Australian Dollars, just to name a few.
Perfect for all amounts
TransferWise can handle a wide variety of payment values, anywhere from a few dollars up to the USD equivalent of £1,000,000. Their flat fee of 0.5% means that TransferWise is a perfectly sufficient way of sending even the smallest amounts of money internationally. Perfect for paying bills across borders, or transferring funds to friends and family.
A couple of caveats
As with most things in life, it’s not all sunshine and roses. Here are a few things that you should know about TransferWise’s service before getting started:
Transfers take a couple of days
As with most electronic foreign exchange services, the transfer process is not immediate. TransferWise advises its customers that most exchanges take anywhere from 1-4 days, depending on the currencies involved. In my experience, the transfer of funds usually takes about 2-3 days, from start to finish.
Some internet skills are needed
It should be said that if you’d like to use TransferWise, you’ll need to know how to use the internet. TransferWise’s platform is available on the internet and through mobile apps, and at least in this regard, the positive thing is that their system is easy to use. Most users of a modest ability will be up and away in 5-10 minutes.
No physical branches, but great customer service
TransferWise is 100% internet based. Therefore, unlike the bank or Western Union type services, there are no physical branches. Despite this, TransferWise has some excellent customer support available over email, and they also list the contact phone numbers for their offices in the United Kindom, United States, Germany, and Estonia.
Is TransferWise safe to use?
Is TransferWise safe? A very important question. You’ll be happy to hear the answer is yes. TransferWise has been operating successfully for over five years now, and has amassed a large and loyal customer base. Having a large customer base means they handle a lot of money, to ensure they can fulfill their orders.
Holding a lot of their customer’s money means that it’s in TransferWise’s best interest to keep everyone’s money safe. Security is essential to their reputation and ongoing business success, so they certainly don’t to mess around. To ensure that they maintain a safe and efficient service, TransferWise maintains competency in a few key areas:
TransferWise is registered with the UK Financial Conduct Authority (FCA). The FCA is a regulatory body who aims to make sure that financial markets are run with integrity so customers get a fair deal. This body is funded by the firms they approve, however they do report to UK treasury and parliament as an independent body. TransferWise and their partner companies are also registered in each jurisdiction of their company’s operations.
Customer funds held in trust
To maintain financial integrity TransferWise keep their customer’s money separate from their own operating accounts. By doing this, the funds used to run their business are independent of monies received by customers for trading between currencies, which are kept in special trust accounts.
Being 100% international based means that website security is a priority, especially when dealing with potentially large transactions. With TransferWise, there’s no need to worry, as all your personal information is protected using HTTPS security encryption – keeping your details safe from prying eyes.
Managing exchange rate risk
When you complete your transfer, TransferWise does everything it can to provide you with an accurate quote of the exchange rate. Because exchange rates are known to change at short notice, their system allows you to select your “tolerance” for currency movements. If the mid-market rate suddenly moves outside your tolerance level, the trade will be canceled, providing you with total flexibility and piece of mind.
Does TransferWise offer good value for money? A comparison
To see how TransferWise stacks up against the competition, let’s compare it with exchanging money through the bank. Say I’d like to exchange 1,000 Euros (EUR) into Australian Dollars (AUD), and that the current market rate is 1.461. That means every one of my Euros is technically worth $1.46 Australian Dollars. In theory, all things being perfect (which of course they are not), my EUR 1,000 is worth approximately AUD 1,461.48.
The bank review
Because I live in Germany, I jump into the online system of my bank (Sparkasse) and set up a transfer request of EUR 1,000 into Australian Dollars. I place my Australian bank details into the required fields and hit enter. A few days later AUD 1,377.13 arrives into my Australian bank account, at an actual exchange rate of 1.3981. Upon review of the fees, it appears that I have been charged EUR 57.30 – comprising of a transaction fee of EUR 15 and commission of EUR 42.30 (approximately 4.23% of the transfer value).
Now for the star of the show, TransferWise. I log onto the TransferWise website and enter all my banking details and hit go. I then send EUR 1,000 to TransferWise’s German account and receive an email confirmation immediately, letting me know that my money is on its way home. Two days later AUD 1,454.36 pops up into my Australian account, at an actual exchange rate of 1.454. TransferWise advise me that they have changed a fee of EUR 4.98 and that’s it!
And the winner is…
TransferWise by a nautical mile! With their small fee and no additional deductions for commission/exchange rate spread, TransferWise put me ahead by an additional $52.32 (or 5.23%), compared to the service provided by the bank. After numerous trials, I’ve found that this trend also holds true for much smaller and larger amounts, as well as other popular currency combinations.
Sure, and other online exchanges?
So far I’ve demonstrated that TransferWise produces a far better result than using the bank. But how does it compare with other online currency services? Below I’ve listed today’s TransferWise mid-market exchange rate alongside some of the internet’s most popular alternatives. You be the judge.
TransferWise, 1.4616, “1,454.36”
WorldRemit, 1.4465, “1,446.56”
OFX, 1.4463, “1,446.30”
Western Union, 1.4179, “1,147.99”[/easytable] Don’t forget, that if you find a better deal, TransferWise will match it – even if you find it after you’ve already made your payment. How good is that!
Ready to get started? A step-by-step guide
If you’re ready to send money abroad and you think that TransferWise is right for you, that’s great to hear, you won’t be disappointed! TransferWise has developed their service in a simple and easy manner, allowing just about anyone to use their interface. Below, I’ll show you how to get started in 4 simple steps:
1. Getting started
Go to transferwise.com. When you first arrive on the website, you’ll be greeted with simple currency calculator. For a quote, enter your intended transfer amount and destination currency. You can send funds to your own account overseas, another person or business. TransferWise’s low fees are carefully outlined.
2. Upload money
Send TransferWise your funds in local currency. You can make a normal bank transfer or use a debit card like you’re shopping online. Specify a value and a destination, then select your preferred payment method. Enter your details or upload your money and you’re done. This takes just a couple of minutes and is your part done.
TransferWise converts your money at the mid-market exchange rate and matches your request with people transferring funds in the other direction (that’s why it costs so little).
4. Money sent!
The converted funds are sent to your destination bank account. All parties to the transaction (you and your recipient) are notified by email along the way, so you always know where your money is. Within a few days, your cash is delivered to the recipient in the requested currency. It’s as simple as that!
TransferWise in the app store
TransferWise understands that not everyone has time to jump onto the computer everytime they need to transfer money. As as result, TransferWise has developed a mobile app for iPhone, iPad, and Android.
The app is with a simple and functional interface and is perfect for making payments on the run. It will work wherever you have access to the internet, either through Wifi or 3G. It supports payments by bank transfer and debit card and displays every detail you need to keep track of its process. During any payment, you can also monitor its status and if needed, cancel it.
In addition to its standard functions, TransferWise have included the following features:
- Invite friends to TransferWise by SMS, email, Facebook & Twitter
- Send-in and verify identification documents
- Set up fixed target amount payments to your recipient
- Set up transfers with new and previously used recipients
Refer friends and EARN money!
If you’ve had a good experience with TransferWise, you can tell your friends about it and get paid in the process. TransferWise has an innovative referral program which provides each of its customers with a unique affiliate link. For every three friends that you refer you’ll be paid $50 – provided that they transfer over $200 in any single transaction.
The best bit is that it’s not only you who will benefit. Any friend referred to TransferWise by you will get their first transfer free of charge – for any amount transferred up to $3000. Everyone’s a winner!
I hope this review has provided you with an insight into the TransferWise operation and its many benefits. If you’d like more opinions on the quality of service, be sure to check out the reviews of 16,000 happy customers over at Trustpilot.co.uk. As for me, I’ll continue to use TransferWise on a monthly basis, as it makes my life a lot easier knowing that I’m getting an honest and competitive deal.
Over to you…
So you’ve read my review and heard what I have to say. Have you had any experience with your own TransferWise review? Is there anything that I haven’t covered that you’d really like to know? If you have a question or comment, please feel free to leave it below.