Like the idea of a multi-currency account, with prepaid Mastercard that gives you the ability to be paid and pay others (anywhere in the world) with very low fees?
Chances are you have heard of Borderless, but is it right for you?
How does it really work?
And importantly – What does it do and not do?
In this review, we thoroughly unpack the Borderless Account from TransferWise and show you how to make it work best.
Click here to open Borderless for your country in a new tab so you can see how it works while you read on.
While TransferWise has been making it super easy, fast, and cheap for its customers to send money across the world in a variety of currencies for years now, their borderless account is taking aim at your bank account.
It promises to revolutionise the banking industry by helping you to:
- Receive money in a variety of currencies and store them in your account
- Get bank details for the U.S., U.K., Australia, and Europe (like you have your own bank account in those countries)
- Easily (and most importantly cheaply) change the money in your account into the currency of your choice
- Don’t like the current exchange rate? Simply keep store your money in your account and change it when things improve
- Manage your money online, no matter where you are in the world
- Send money cheaply almost anywhere in the world
- Super easy set-up
Sound like something you would be interested in?
Then read on to see how it can work for you!
What Is A TransferWise Borderless Account?
To put it simply, a TransferWise Borderless Account is like a bank account that lets you store money in many different currencies.
Note: Technically Borderless is not a Bank Account, it is a Global Account. This in practice means it has some seriously great advantages over a traditional bank when it comes to accepting money in different currencies. However, you will may still need a bank account to do things like pay bills in the currency you operate.
The big advantage is instantly having an account number in the US, UK, Australia and Europe to accept payments AND to exchange them at a VERY competitive rate when you like.
Business example: If you were a business getting paid in a different currency to the one you operate or if you have contractors you pay in different currencies Borderless could easily save you almost 4%* easily. (*Data from Consumer Intelligence study 2018)
Expat/Backpacker example: If you were working overseas and need to get paid in the US, UK, Australia and Europe this is a much easier way to get paid in the local currency initially (opening a normal bank account can be a pain) and then get the money home if you want at a very competitive rate.
When you sign up, you will be given an account number, swift or sort code, and all the other details you would expect to get with a regular bank account.
Where it differs from your high street bank is that it can accept many different types of currency. 28, in fact! You will also get the bank details for four different countries! The U.K, Europe, the U.S., and Australia.
While your regular bank will likely only keep one currency, and charge you a hefty fee if you want to accept money in a different currency, with a TransferWise borderless account all your different currencies can be kept in the one account.
Why is this useful?
Well, for most people, this may not be that useful. If all your money is in USD and you get paid in USD and you don’t need to send money in another currency, this is obviously not going to be much of a revelation.
However, if you need to manage multiple currencies, this could be an absolute godsend as you can avoid the hefty bank fees and exchange rate fees that are often associated with sending money abroad.
As well as this, it can be quicker, easier, and you will have more control over your money.
Imagine if you are a freelance worker from Australia who has done some work for a company in the US. Normally, you would have likely either been paid in USD through PayPal or a bank transfer. This will normally incur a big fee when exchanging the money which can seriously eat into your profits.
However, with a borderless account, your employer could simply pay you in USD. Once they do this you can choose when to exchange the money and also take advantage of TransferWise’s low fees on converting currencies.
Here are the main benefits of a TransferWise Borderless Account
- An Easy Way To Get A “Local” Account In Multiple Countries
- This allows you to send and receive money in multiple countries cheaply and easily.
It is basically the same as if you had a bank account in each country, except it is much quicker to sign up to. As everything is online, it is also really easy to manage your accounts. You won’t have to make any trips to your high street bank!
Consider, for example, how hard it is to get an account in the UK. Even if you literally move to the country, you will still need to collect certain documents before you can get paid. However, with Transferwise you can set up a bank account from the comfort of your own home.
Reduce The Costs Associated With Sending Money
There are no costs associated with the Borderless Account except for when you want to convert money or send it to another bank account. There are also no charges to receive money.
In fact, even the fees they do charge are likely going to be lower than comparable charges levied by banks or other services.
Consider when you convert money.
Because of the P2P money transfer service that TransferWise was built on, converting money to another currency with them is generally very cheap. In fact, you will always get the mid-market rate (the rate you see on Google and other sites) with only a small percentage, usually under 1%, being charged by TransferWise.
Meanwhile, the fee for withdrawing money is simply a token fee by TransferWise to cover costs and is generally very little. For example, withdrawing GBP costs 50p, USD costs 1.30, and AUD costs 0.90.
Basically, a Borderless Account is going to be one of the cheapest ways to receive, send, convert, and transfer money in a large variety of currencies.
High Security And A Reputable Company
Transferwise is a highly respected fintech company. It is heavily regulated in each country it operates in, including the U.K, U.S, and Europe. Also, on its website, it claims to move over one billion GBP safely every single month.
The money that you put in the account is stored in a low-risk financial institution, not put into investments that could put your money at risk. Because of this, they claim that even in the unlikely event that the company becomes insolvent, your money would still be returned to you within 10 working days.
How Is This Different To TransferWise’s Regular Service?
It is quite different in that a borderless account acts like a bank account, while TransferWise is simply a service to send money. While they both use the same P2P technology to make the transfers quick and cheap, a borderless account gives you more options when managing your money.
This is because with a borderless account you will actually get bank details for EUR, AUD, GBP, and USD. This enables you to send, receive, and store money in those currencies.
For example, by having a USD account, you can actually receive money from companies in the US without any charge whatsoever. It is no more difficult for the company sending the money than if they were sending to a regular bank account, but you would be in charge of when your money is sent. You would also likely avoid many fees.
As well as actually being able to receive money in different countries, it also allows you to keep the money in the account. None of this is possible with the regular TransferWise service.
Who Is A TransferWise Borderless Account For?
While a TransferWise Borderless account isn’t necessarily for everyone, we anticipate that some people will wonder how they ever survived without one. (like mobile phones or bill payments before the internet)
For example, if you are a freelancer, work overseas or a small business owner who needs to receive money in multiple countries, you are likely going to get some significant use out of your TransferWise Borderless Account.
Before these people would have had three main options for receiving money. The first would be to set up a bank account in the country that they were receiving money in. This is a process that generally ranges from incredibly difficult to literally impossible.
Alternatively, they could accept money via wire transfer. This would see them potentially hit by hefty bank transfer fees or conversion fees that could see them lose a significant amount of money on every paycheck. It also gives people basically no control over when they receive money or the exchange rates they get.
A final solution would be to use a third party application such as PayPal, while no doubt easy to use, these services limit what you can do with your money and often subject you to fees and uncompetitive exchange rates to withdraw or send money.
A borderless account could also be set up by people moving to foreign countries to help them get set up with a bank account before they leave. While it won’t be much use for buying things, it will at least allow you to get paid from the day you arrive.
How Much Does A Borderless Account Cost?
One of the best things about a TransferWise Borderless Account is its low fees. In fact, using the account like a few regular bank accounts doesn’t cost anything at all. The set up is free, as is receiving or adding money to your account.
The only fees come when you decide to convert money to a different currency or withdraw money from your borderless account to a bank and these are comparatively low.
Fees to convert
Much like with the regular TransferWise service, when you convert money you will get the mid-market rate. This is the rate that you will see on, for example, Google when you search for exchange rates.
However, TransferWise do charge a small fee as a percentage of your exchange. The exact fee depends on your currency but it ranges from 0.35% when converting GBP to EUR, to 1% when converting USD to EUR.
Fees To Withdraw Money To A Bank Account
If you are withdrawing money to a bank account, whether your own or someone else’s, you will be charged a small fee that TransferWise claim is simply there to cover costs. This will be paid in the currency you are sending the money in but some example amounts are 0.5 GBP, 0.60 EUR, or 0.90 AUD, or 1.3 USD per transaction.
If you want to send money to an account in one currency, but your money is another currency, you will also be charged the conversion fee.
The Sign Up Process
Luckily, signing up for a TransferWise Borderless Account is an absolute breeze. Let’s take a look at what you have to do. This guide will assume that you already have an account with TransferWise, if not you will have to sign up to them first.
1. Log In To TransferWise As Normal
Simply enter your email and password to log in to TransferWise as you normally would.
2. Click On Borderless Account On The Side Menu.
On the menu on the left hand side of your screen, simply navigate to the Borderless Account option and click “Get Started.”
3. Choose The Currency You Want To Activate
You will then have to select the currency that you want to activate. TransferWise currently lets you receive bank details for AUD, USD, EUR, GBP accounts, although you can also activate up to 24 other currencies from around the world.
4. Complete Any Security Checks
You may need to complete some security checks before activating your account. This can include taking a picture of your ID, for example a passport or driver’s license and sending it to TransferWise. Don’t worry though, because in most cases this will not take more than a few minutes to get sorted.
5. You can now see your account details!
On the next page you will see your account details, including the account number, account name, and, depending on the currency you chose, your sort-code or routing number. You can use this section to see how much money you have in your account, as well as add, convert, or send your money.
6. Activate any other currencies you may need
Once you have activated your first currency, you can then easily activate any other currencies that you need. As more security checks are not normally required, this will not be any more difficult than simply choosing a currency and clicking activate.
This All Sounds Great! Are There Any Negatives?
We have spent this whole article talking about how great and how useful the borderless account is, because it generally is excellent. However, are there any things you should know before you sign up?
Well, yes. The account isn’t perfect. Here are some of the things that TransferWise will hopefully improve in the coming months.
Limited Number Of Currencies
This is likely to be the biggest issue for many people. While there are a good number of currencies available in the account, if a currency you need isn’t one of them that isn’t much use.
There are even some pretty big currencies missing at the moment. These include: Chinese Yuan, Indian Rupee, and Korean Won. If you need to receive money in one of those currencies, it looks like you will have to wait for them to be added.
The good news is that you can still use your Borderless Account to send money to any of the currencies that are currently set up to work with TransferWise’s regular transfer service. That includes the three currencies mentioned above!
Difficult To Spend The Money In Your Account
While you can make payments by sending money to a bank account, there is currently no easy way to buy things using the money in your account. Having said that, TransferWise are reportedly working on a debit card that you could use with your account.
If and when this is released, it would add an extra level to the borderless account and it would make it even more useful.
No Interest On Your Money or Government Guarantee
While perhaps not the biggest issue as this is a global multi-currency account, not a savings account, TransferWise do not offer interest on money in your Borderless Account. Because of this, you will have to think twice about storing large amounts of money in the account for long periods of time.
Along the same lines, many governments guarantee you funds should the company go under. This is not the case with Borderless which is not considered to be a bank account.
Fees To Send Money To External Accounts
OK, while the fees are currently incredibly low, and TransferWise say that it is just to help them cover costs, many other bank accounts will not charge you any fee for transferring money within the same country.
However, we believe that for the people the Borderless Account is aimed at, these fees will be more than worth the convenience the account offers and that most people will still save money overall when using this account due to the cheaper international transfer and conversion costs.
If you get paid in a foreign currency or need to make payments in a foreign currency, then signing up for a Borderless Account with TransferWise could be a great idea. For most people it will even work out cheaper than using a bank transfer or a third-party service.
TransferWise is a trustworthy company and while there are a couple of small issues such as the limited number of currencies that the account works with and the inability to pay for things using your account, these are said to be things that TransferWise are working on.
All in all this an easy to use, cheap, quick to setup and, most of all, incredibly useful service!