7 Things You Should Know Before You Sign Up
Today, I will show you if TransferWise is the right choice for your needs.
- Can be very inexpensive
- Transparency of fees/costs
- Very fast for (more costly) card transfers
- Rates guarantee (24/48 hrs)
- Online focus, limits telephone contact to troubleshooting
- Larger transfers can be limited
Full Disclosure: While we aim to show you the good and the bad in each review so you can make the best choice, there are links contained in this page which are affiliate links (and while not costing you anything) do earn us a commission. We often also get the opportunity to provide you with discounts and offers as part of using the link. If you use these links thank you for supporting our mission to making money transfers simple (and cheaper 🙂 )!
Is TransferWise right for you?
Focused on making international transfers bank to bank, TransferWise are cheaper than banks and being transparent they start with the real exchange rate and show the fees that will apply. They can send and receive 22 currencies and send a further 27 currencies.
See exactly what you pay in fees use their widget 🙂
Larger amounts = more than $7000 USD/£4000 GBP/€4500 EU/$9500 CAD/AUD
The real deal
In some circumstances TransferWise may not be the right choice but for many it will. The key here, is to make it clear who you should choose.
Choosing the best option for your circumstances ideally starts with a service that has offices in your country of residence because of the service and security advantages inherent. TransferWise has offices in the UK, USA and Estonia (which covers Europe).
In addition to their money transfer service after signing up, you can make use their ridiculously useful borderless account (review) and card (review) which enables you to accept money from GBP, EUR, USD and AUD and hold up to 40 currencies it’s a bit like having an account in the US, UK, EU and Australia.
7 Things You Need to Know (click to skip down)
- Rates, Fees and Costs
- How to Sign Up
- How TransferWise Works (and when it doesn’t)
- If Things Go Wrong and Trustworthy Reviews?
- Safety and Security
- Bottom Line
TransferWise is incredibly transparent about exactly what you pay, which means that you can see what you will pay very easily at each step.
The trouble is, different amounts, different currencies and different countries all lead to different costs.
The answer is at hand.
Simply open the TransferWise widget, (opens in a new tab) and follow these three easy steps to compare your TransferWise fees with any other service:
3 Simple Steps to See What You Pay (and Compare)
With your opened widget, specify the currency you wish to convert and the currency you want to convert it to. The currency to be converted is under the “You send” panel and the resulting amount is under the “Recipient gets” panel.
Please take notice of the fee breakdown between the two panels as shown.
Divide the “Total fees” by the amount “You send” and multiple by 100 to get the percentage of fees you pay.
In my example, because I entered $1000: ($8.45/1000) X 100 = 0.845%
Compare the values with the other services you’re considering so you can get the most of what you’re paying for.
Here are some rates from the following money transfer service providers:
- Banks – 3%-7%
- PayPal – 6%-8%
- Other International Money Transfer Companies – 0.5%-1.8% (variable on the amount and currencies involved)
As we see, 0.845% is very competitive. However, please take note that this percentage will change depending on a number of factors, which is why we recommend following the 3 steps above.
What else should you know?
TransferWise offers the mid-market exchange rate (essentially the best exchange rate anyone can get) and is transparent about the exact fees you pay so you are off to a great start.
But this can be useless if the exchange rate is not guaranteed.
Some services do not guarantee the rate they offer you. This means you are at the mercy of exchange rate fluctuations which can go either way quite easily by 1% or more each day.
TransferWise guarantees the rate for 24 or 48 hours, depending on what currencies you choose.
TransferWise says, “as long as we receive your money within the specified period of time, then that’s the rate you’ll get. If your money does not reach us in time, we’ll still convert your funds as soon as possible, but will use the mid market rate valid at the time of receiving your money.”
In our real world test, we found that TransferWise is more than good on its promise. When I transacted Saturday morning I knew our bank would take at least 48 hours from Monday morning. In the 4 days or so it took for them to get the money, the exchange rate have moved marginally against them, but they still held the rate we originally locked in.
However, this is not everyones experience we found out in the reviews (below) from our analysis.
2.1 Signing Up
Initial sign up for TransferWise is very straight forward.
It can be done in two ways:
- Register directly through the TransferWise website. Click here for additional instructions.
- Sign up using either your Google+ or your Facebook account. Click here for more details on how to do so.
2.2 Mobile and Email Verification
As part of the authentication process TransferWise will send you a text with a security code and an email.
Once these are verified by entering a security code and clicking the email link, you can set up your first transfer.
2.3 The Transfer
This is where you finalize the amount you want to transfer.
As a bonus, you will see an estimate of when the amount will arrive.
The also will Guarantee the Rate they give you for 24 or 48 hrs (which is highly valuable in our opinion).
2.4 Who Sending Money To
Next you enter bank details of where you want the money to go.
2.5 Verify Identity
TransferWise will ask you to upload images of your ID to verify your identity.
(This can easily be done with photos taken from a smart phone, shared with your computer and uploaded to their site.)
Although the say this could take 2-3 days, in our experience we found this step instantaneous.
This is standard required practice for all money transfer services.
2.6 Make Payment
After you check the details of the transfer you set up like the bank account and the amounts you will be given a number of options to pay TransferWise based on the country where the money is coming from.
2.7 Track Progress
You can track the progress online just to make sure everything is running fine, but at each major step you will also be sent an email with the subject “Transfer Sent”.
3.1 P2P Service
Basically, TransferWise’s big secret (and potential limitation) is that they transfer your money without actually transferring any money at all.
TransferWise is a peer to peer (P2P) service. What this means is that they match people who want to transfer one currency into another, with people who want to do the opposite swap (as much as possible anyway).
Also see “When it Doesn’t” below.
For example, if you want to swap 1000 GBP into EUR, TransferWise will simply add your 1000 GBP to their pot of GBP and send the equivalent amount of EUR to the recipient from their pot of Euros.
This means that the money doesn’t actually travel over any borders meaning they can save you money on transfer fees.
3.2 When it Doesn’t
In our tests, in almost every major currency and amount TransferWise is a leader – inexpensive as you will find anywhere and excellent in its delivery but not all the time.
Their biggest strengths maybe the reason you should look at other options.
As we has seen the TransferWise business model involves swapping with peers and doing everything online to keep their costs low.
And they do this very well.
But there are two instances where they may not be the best option.
- Larger amounts become more difficult for P2P services to handle making cost and speed advantages minimal over other similar services.
- If you are the type of person who prefers speaking to a human to explain things.
For larger amounts ($7000 USD/£4000 GBP/€4500 EU/$9500 CAD AUD) or if you want lots of telephone support we recommend using money transfer companies that are not based on P2P.
Not only are they easier to get on the phone (some 24/7 compared to weekdays 8am to 8pm), often they actively phone you during transfers and account set up.
Check out our other recommended providers for larger amounts or more telephone based services.
No matter which review site you look at, you will find the majority of reviews are very complimentary.
For example, Trustpilot averages the reviews and finds TransferWise to be “excellent”with a 9.1/10 rating based on 47,742 reviews.
Having used them personally, I am very confident that these reviews are mostly genuine.
But, nothing is perfect and it is in the poor reviews where a lot can be learned. The trouble with reading individual reviews however is that it is easy to find yourself caught up in the individual stories. So we looked at as many as we could to try and get a pattern, so that you can learn from it. It is important to keep the negative reviews in perspective, as they account for less than 5% of customer reviews.
After scouring 100s of reviews, most bad reviews relate to two things:
- Accounts Deactivated After a Transfer (30%)
- Money Delays (30%)
- Better Rates Elsewhere (10%)
- Customer Service (10%)
- Problems With Card Service (10%)
- Other (10%)
Accounts Deactivated After a Transfer
TransferWise seems to have a policy of asking for additional ID if the transactions reaches certain thresholds. No doubt this is related to meeting regulatory requirements. This benefits most people, unless in the minority of situations their account gets deactivated because they can’t meet requirements. In this case their money is almost certainly refunded to them, but they are understandably upset.
Most other transfer companies (which are geared towards transferring larger amounts from the outset) get all the ID checks out of the way before making even very small transactions.
This is one reason we recommend using alternative services over $7000
Money Delays / Lost
A significant number issues relate to the money being delayed. Some believe the money has been lost. This seems like a big problem but generally this has nothing to do with TransferWise at all, and is more about the banks at both ends who take time to process transactions.
If you use a card (credit or debit), TransferWise can be one of the fastest services around but there are additional costs associated with this and most people will not choose this option.
On the other hand the P2P process of matching your funds with that of others can take time, especially with less popular currencies and/or larger amounts.
TransferWise says, converting your money can take a maximum of two working days, but it’s very rare that it takes this long.
The cheaper methods that most people use to fund the transfer, are on a par with other services and our hands-on experience with TransferWise was consistent.
The reality is that most services swap the currencies very quickly and the speed of the whole transaction has much more to do with the banks at both ends than anything else.
How long it takes to arrive in your account will often come down to your bank not the transfer company itself which varies widely.
See (B) in “The Time Your Transfer” takes.
(A) and (C) have very little to do with TransferWise and rely on the the banks used at either end.
The fact that TransferWise are a peer to peer (P2P) service could leave you worried about the security of using the service. You may worry about what will happen if you send your money and your “peer” doesn’t do the same?
While it is peer to peer, TransferWise isn’t literally matching you up with another person on the other side of the world. They have large amounts of all the currencies they deal in and it is the company itself that will transfer the money.
As well as this, like all major financial companies TransferWise is heavily regulated. Each country it operates in has its own regulatory board that TransferWise must abide by. This means that it is regulated by, amongst others, boards such as the Australia Securities and Investments Commission (Australia), Customs and Excise Department (Hong Kong), the UK Financial Conduct Authority (UK and Europe), and the Financial Crimes Enforcement Network (USA).
As a company, they are heavily regulated and as such, you shouldn’t have any problems with sending money when using this service.
For many TransferWise is an excellent way to transfer money abroad. Its brilliance is in its simplicity online and in the fact that they are very upfront about what they charge and the amount of money you will receive when you make a transfer.
However, if you like speaking to human at critical times or want to transfer a for larger amounts non-P2P services may be better.
Check out our other recommended providers for larger amounts or more telephone based services.
Either way your transfers will certainly be much cheaper than your bank.