TransferWise Review: Cheapest Way To Transfer Money Abroad
TransferWise is the best services I found for sending money abroad safely and almost for free.
TransferWise, a revolutionary fintech startup, has changed the rules of international money transfers for good, revealing banks’ unfair & hidden fees.
Over £500 million is transferred with TransferWise every month – which means the users are saving more than £22 million each month.
TransferWise solves real people’s real problems turning a very traditional industry (banking) upside down.
There’s certainly an element of taking from the rich to give back to the people, which I really like about it.
How does TransferWise work & why is it so cheap?
Since TransferWise does peer-to-peer currency swapping rather than “buying” and “selling” between countries, users get their money converted at the real mid-market rate.
That’s the rate you see on Google search, for example.
TransferWise matches you with people, who need the opposite currency to you, so unlike banks they transfer money between people rather than countries, which means the money never crosses any boarders, it’s simply rerouted to those who need it.
TransferWise holds bank accounts in different countries and currencies and uses their customer’s to facilitate currency trades between each other.
As a result, TransferWise is in position to offer cost-effective service for incredible £1 for transfers up to £200 and 0.5% for everything above that without any hidden fees.
This means that on a £1,000 transfer to Euros, banks could charge you £50. With TransferWise, it’s only £5, meaning it’s 10X cheaper.
Read more about peer-to-peer money transfer and compare TransferWise with CurrencyFair.
My experience with TransferWise
Last year, I bough a property in my home country Estonia, Tallinn, so I had to transfer a large sum of money to my Estonian bank account.
As you do, I called my bank to find out more about their fees.
Even though, Lloyds Bank said to charge a fee of £7.99, I knew that they secretly overcharge me on exchange rate and I end up losing about £107 on my £5000 transfer.
TransferWise, on the other hand, is transparent with all their charges & exchange rates up-front:
I didn’t even consider PayPal for this transfer as I know their fees are huge.
(I remember the first time I received an international bank transfer from my overseas client via PayPal, I was unpleasantly surprised at how little money I had left from all the fees, commission and exchange rates.)
PayPal charges 3.4% + 20p per transaction + they are not upfront about their exchange rates, which makes me think, that that they might even end up costing more than a bank.
If you are an expat like me, who wants to send money home or a business owner, who needs to send salaries to different countries or a freelancer with international clients, TransferWise is probably the best option out there.
Is TransferWise safe to use?
TransferWise has been operating successfully for over 7 years now, and has a large and loyal customer base that trusts them with £500m every month.
TransferWise ongoing business success is directly related to keeping people’s money safe. Hence, security is paramount to their business and reputation as a reliable and honest financial service.
To maintain financial security, TransferWise maintains compliance in a few four key areas:
TransferWise is authorised with the UK Financial Conduct Authority (FCA), which is a regulatory body that ensures that they operate in accordance to all relevant regulations and rules laid down by FCA. This is crucial for any credible financial service provider and for your peace of mind.
Customer funds held in trust
TransferWise uses trusted bank accounts and banking partners Worldwide for transferring money and, of course, they keep customer money separately from their operational accounts.
Customers’ money is kept in separate trust accounts.
Website secure & encrypted
All your transactions are protected by industry standard HTTPS encryption, which means that card payments are processed via their secure debit card processor and your CVV/CVC number is never stored. This keeps all of your information safe.
TransferWise is completely online-based business, without the tightest of security, there is no TransferWise. Security is as important to them as it is to you.
Managing exchange rate
When you complete your transaction, TransferWise does everything it can to provide you with an accurate quote of the exchange rate. Because exchange rates are known to constantly fluctuate, you have two options:
- Guaranteed exhnage rate
- Estimated exchange rate
If you choose ”Guaranteed rate” then this means you have a timed locked rate, usually 24h to 48h.
If you decide to go with “Estimated exchange rate”, this means that your payment will be converted with a floating rate, so TransferWise will use the mid-market rate at the time of conversion.
PS! With “Estimated exchange rate”, you can always set your limit rate, in other words your “tolerance” for currency movements, so if the mid-market rate suddenly moves outside of your tolerance level, the trade will be canceled, providing you with total piece of mind.
NB! Best rate guaranteed
To ensure that you’ll be 100% happy with your rate, TransferWise even have a “cheapest money guarantee”, which means that if you receive a quote from another provider, offering a better deal than the mid-market rate, TransferWise will match it – even if you find it after you’ve already made your payment.
How good is that?
Sign up and make your first transfer today!
Ready to send money abroad? Good stuff!
Below is a super simple step-by-step guide to help you to get started:
1. Go to TransferWise homepage
When you hit TransferWise homepage, select the currency you want to send FROM and the currency you want to send TO.
You can also specify the exact value you want to transfer.
Then hit “Get Started” button.
2. Quick sign up
You will then need to sign up with your email and password (or Facebook/Google+ if you prefer)
3. Enter your recipient bank details
You are now on the transfer page, where you can enter your recipient bank details and see the mid-market exchange rate.
You can also see how much are you saving compared to your bank.
Hit “Pay For the Transfer” when you’re done.
4. Send money
You can select debit/credit card or bank-transfer.
If you select credit or debit card, you need to enter all your card details similarly to when you pay for goods online.
If you prefer bank transfer, then TransferWise will show you their bank details in the country that you’re sending money to, which will include their sort code, bank account number and reference number you need to use for the transfer.
Your part is now done!
5. Money received!
Money will arrive to a recipient bank account within 1 business day (I sent money from the UK to Estonia and it arrived the following day). Sending money to some countries can take 2-3 business days.
All parties (you and your recipient) are notified by email along the way, to keep your peace of mind.
It’s this simple.
Oh, and their customer support is fabulously friendly, should you have any questions along the way.