If you are looking to send money to another country cheaply, Transferwise is a money transfer service that promises to allow you to do just that.
But does it?
They say they can transfer your money in a without the costs associated with your bank and without any hidden charges or fees.
The low down
In our Transferwise review, we found it to offer an excellent and easy to use service that, as advertised, was very upfront about its charges and the amount of money that you would both receive when using their service.
Best for you?
First lets see if you are going to get a good rate?
Do not miss “Safety and Security” and “What happens if things go wrong?” below.
Because Transferwise is so transparent about its fees, you can figure out if you are getting a good deal pretty easily.
3 Simple Steps – A Good Rate for You?
Try the Transferwise widget for yourself (opens in a new tab) to see the fees you will pay.
Simple enter the amount “You send” and select the two currencies you are exchanging.
“Here” is you Total Fees.
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%
A) Compare with other services you are considering. Note: You will most likely need to figure out the cost of exchanging money in addition to fees quoted. Part of Transferwise’s transparency means they use the mid-market rate – more about that later.
B) Compare with banks charging between 3% – 7%, Paypal 6% – 8% and other Money Transfer Companies 0.5% – 1.8% (depending on currencies and amounts)
In this example, 0.8% is very competitive but it will vary for everyone especially as the amounts change.
Not all about the fees.
It has a Secret Sauce that we will explain below.
Safety and Security is a concern for many especially given that it has a fairly unique way of doing things.
Service is vital especially if something goes wrong (which can happen).
Speed of Transactions can be very important.
More on Rates, Fees and Costs
Transferwise is a money transfer service with a difference – it is a Peer to Peer (P2P) platform (wikipedia) to start with. It is also a relative newcomer.
However, its unique way of sending money has resulted in it being one of the hottest fintech companies in the world and it is backed by investors including one of the founders of Paypal which also enables you to transfer money.
Watch how it works.
What is its Secret Sauce?
So what is this new, innovative way of sending money that has turned out to be so successful?
Well, basically, Transferwise’s big secret is that they transfer your money without actually transferring any money at all.
Transferwise calls itself a peer to peer transfer 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.
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.
Safety and Security
The fact that Transferwise call themselves a peer to peer 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?
As explained above, 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 from their capital supply.
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.
Of course, this is as long as you are careful with who you send your money too! Once the money is sent, it is gone, so make sure you trust the person you are making the transfer to.
If you need any more assurance about the safety of their service, Transferwise has claimed that over 800million GBP worth of transfers are made using their service every month!
Service – Customer Reviews
Now we have looked at the service and security offered by Transferwise, it is time to check out what kind of experience people have actually had with them.
Well, luckily for those people thinking about sending money using Transferwise, the service has astoundingly positive reviews. On TrustPilot they have an ‘Excellent 9.5” rating based on 36,399 customers reviews. Meanwhile, on Trustmark, they have a rating of ‘Excellent 9.8’ from 4,251 reviews.
So what exactly is it that people love about Transferwise?
Here are some of the pros:
- Very easy to use service
- Good rates when compared to a bank
- Cheap fees
- Transparency of the service and no hidden fees
- These positive reviews pretty much all confirm what we have found in our Transferwise review. They offer an easy to use service that allows you to transfer money quickly, at a cost cheaper than a bank, and without hidden fees.
Of course, with the number of customers and reviews that Transferwise has, there are undoubtedly going to be some negative reviews. We scoured these two sites to see what people were complaining about.
- Delays to transfers
- Verification on accounts
- Slow transfers
These negative reviews are the type of one-off problem you get on reviews for most money transfer services. Basically, it is crucial to know exactly what you are getting into before sending money.
Overall Transferwise is a fantastic service but check here to make sure you know what you are getting.
Speed of Transactions
Delays to transfers for example, may be due the need to match your trade with someone else. In effect, their core strength is causing some of their core weakness. For large amounts or between certain countries it is easy to see how delays may occur in the matching process.
Firstly, a ‘same day transfer’ doesn’t necessarily mean that your money will be in the bank on the same day. It simply means that the company will send the money that day. 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.
See FAQ below for more details.
As well as this, when setting up your account to make a transfer you should always be aware that there is a slight chance that your account will not be verified or that you will need to provide extra details. Because of this, if you are desperate to send money as soon as possible and can’t afford any delay, perhaps look for another option.
One notable thing was that on all the negative reviews on the website TrustPilot, a representative from Transferwise had made a comment in order to try to help solve the problem. It is hard to know whether this ever actually lead to the problem being solved but it is nonetheless a very nice touch.
Any good review would not be complete without at thorough analysis of its rates.
So what about the rates you receive with Transferwise? Will they actually save you money and how do they compare?
Unlike some of the other transfer services out there, Transferwise do charge a fee on all transfers. This usually comes in the form of a small percentage of the total amount transferred. There is also a minimum fee for when you transfer smaller amounts.
The exact fee you will be charged depends on the currency pairing you use. For most of the main currency pairings the fee is around 0.5% of the transfer with a minimum of 2 GBP. For example, if you choose to transfer GBP to USD, you will be charged 0.5% of the amount you choose to send, with a minimum fee of 2GBP.
On the other hand, if you need to send money to China, you will be hit with a slightly higher rate of 1.5% with a minimum fee of 2.85 GBP.
The reason that Transferwise charges a transfer fee on all transactions is that they don’t charge anything extra on the exchange rate itself – which is where most transfer services do. Most money transfer services and banks make a profit by transferring your money at a slightly worse rate than they receive themselves and keep the difference.
Transferwise, on the other hand, uses the mid market rate as their exchange rate and pass every penny on to you.
Of course, the savvy consumers out there will have realised that while Transferwise say this is what they are doing, their “transfer fee” of 0.5% (or whatever the amount for the currency pairing you choose) is essentially the same as them giving you a slightly worse exchange rate.
While this isn’t necessarily a bad thing, (whichever service you use there will be a charge at some point), if you are looking for the best possible deal it could be worth checking out a number of sources before making your transfer.
What the Transferwise way of charging does offer that others don’t, however, is excellent transparency about what you will pay on each transfer. This is because when you transfer with them you know that you will get the mid-market rate plus their specified transfer fee.
In fact, on their website, you can get an exact quote on the amount of money you receive when making a transfer.
In comparison, many other money transfer services will show you the interbank rate on their website but you won’t actually know the amount you will receive until you have signed up to their website and got a quote.
One feature you may have noticed on the above screenshot is the 24 hour guaranteed exchange rate. This is a handy feature that guarantees you will get the rate quoted to you as long as you send Transferwise your money within 24 hours.
There are some instances where they reserve the right to refuse the guaranteed rate, such as if the exchange rate drops by 5% or if they suspect that you are abusing the system by setting up rates without transferring money.
There are situations where this guaranteed rate could come at a slight cost. For example, if the exchange rate moves in your favour during those 24 hours and you don’t get a new exchange rate you could end up with a slightly worse deal than with a service that uses floating exchange rates.
However, equally, you may end up with a better deal if the exchange rate moves the other way. Because of this, it really does seem like Transferwise are using this feature as a way to improve the user experience and be clear upfront about the amount of money you will send and receive, not an attempt by them to lock you into a poor rate.
You might also like Transferwise Fees
Next up, we will try to answer some of the most common questions you may have about transferring your money with Transferwise.
How long will it take to verify my account?
Verification will usually be completed within two days although it can be quicker or longer if you end up having problems with verification.
Is there a fee to pay on my Transfer?
Yes. The fee will depend on the amount you transfer and the currency pairing you choose. For many transfers between major currencies the amount will be around 0.5% of the total transfer with a minimum fee of around 2 GBP or equivalent. However, there are no hidden fees when it comes to your exchange rate.
It should be noted that depending on your bank or payment method you may be charged transfer fees or card fees which can add to the total cost. You should bear this in mind when transferring money.
How long will the transfer take?
Transferwise state that most transfers will be completed within 1-4 working days and the exact time will depend on which currencies you are transferring and also the payment method you choose to use.
For example, while bank transfers can take up to three working days to reach Transferwise, a credit card payment will reach them instantly.
Once the money has arrived, they will usually transfer it within a few hours (assuming the banks are open) and always within 2 working days if there are no problems.
Now, when you receive the money will depend on your bank. This can take up to a few working days.
Basically, while it is a quick service and there are ways to maximise the speed at which your money will be transferred, it is import to realise that your money won’t arrive instantly.
How much money can I send?
One of the biggest positives about Transferwise is that there is no minimum amount that you can send. There is a minimum fee that you will have to spend to make the transfer but as long as you don’t mind this you can send any amount of money you want.
How safe is Transferwise?
Transferwise is regulated in each of the countries it is based in. It sends large amounts of money every single day without problem.
So, Is Transferwise a Service Worth Using?
Absolutely, Transferwise is an excellent way to transfer money abroad. Its brilliance is in its simplicity 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.
Having said that, there may well be slightly cheaper ways to send money out there and they also don’t offer many options when it comes to rates. Because of this if you want the best and cheapest rate possible it could pay to shop around.
However, if you want a pain free experience without any hidden charges, one that allows you to send any amount of money, and one that is most certainly much cheaper than your bank, then Transferwise could be the money transfer service for you!