7 Things You Should Know Before You Sign Up!
In the next few minutes, you will find out if TransferWise is the right choice for your needs.
- Can be inexpensive
- Transparency of fees/costs (see below)
- Rates guarantee (24/48 hrs)
- Online focus, limits telephone contact to troubleshooting
- Larger transfers can be limited
In many situations TransferWise is a clear leader but in some circumstances TransferWise may not be the right choice and we want you to know!
But wait there’s more 🙂
We make it easy for you to figure out if TransferWise is best for you and if not who is.
But importantly, we dig deep into reviews from real folks including the negative ones so you know exactly what you are going to get – the good, the bad and yes, even some ugly.
Disclosure: This post contains affiliate links. For more information, see my disclosures here.
- When and How it Works (and When it Doesn’t)
- The Real Transfer Costs (+ Hidden)
- Two Best Ways to Sign Up
- How Fast is TransferWise Really?
- What Reviews Really Say (inc. Negative Ones)
- Is Your Money Safe with TransferWise?
- Bottom Line – Best Service for YOU?
Focused on making international transfers, TransferWise is typically far cheaper than banks and insanely transparent starting with the real exchange rates and then showing the fees up front. They are particularly good at smaller transfers and have a very useful multi-currency account.
Here is a short video that explains the 3 must knows we will expand on in a moment:
See the transfer fee you pay for yourself with their widget! 🙂 You can also compare with other services.
The main reason TransferWise may not be the best choice is for larger amounts (more than $7000 USD/£4000 GBP/€4500 EU/$9500 CAD/AUD). We will talk more about that in a moment or you can skip ahead to the “When and How it Works (and When it Doesn’t)” section.
First let’s focus on the awesome.
In addition to their money transfer service after signing up, you can opt into their seriously useful Borderless account (review) and get access to their Credit Card like pre-paid Mastercard (review).
The Borderless account enables you to accept money from GBP, EUR, USD and AUD and hold more than 50 currencies it’s a bit like having an account in the US, UK, EU and Australia.
You can also transfer funds between different currencies within your account and they have a calculator to show you what you will pay for this too. Spoiler Alert: It could be a game changer in saving money and helping you to do more – more easily.
That combined with the optional card means you can spend it in any currency without the usual fleecing you get from involving banks and other cards.
Their mobile app also ranks well and is available for Apple and Android mobiles.
But the best part may not be so obvious:
For the sake of security and customer service, the best option is ideally one that has offices in your country of residence.
TransferWise has offices in the UK, USA, Australia, Estonia (which covers Europe), Hong Kong, Brazil, Belgium, Hungary, Japan, Malaysia, Singapore, Ukraine and the UAE.
Right from their outset in 2011, TransferWise wanted to take power away from banks (who continue to fleece most people) and put it back into the hands of individuals.
This means they can have some serious advantages, as we will show now.
1.1 When it Works
TransferWise started off as a P2P peer-to-peer service, but they have moved away from this, which may or may not be a great thing – time will tell.
The benefits of P2P were huge; it meant 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). This has huge cost savings especially for smaller transfers.
But TransferWise has not lost the most important benefit for smaller transfers – low costs with highly competitive currency exchange rates.
What this means for you
TransferWise cost structure works wonderfully for smaller amounts and this is where great cost savings are. This includes amounts below $7000 USD/ £4000 GBP/ €4500 EU/ $9500 CAD AUD.
If you plan on only sending amounts smaller amounts, skip down to The Real Costs of Transfers (+Hidden Fees). This section will show you stuff TransferWise is really made of.
1.2 When it Doesn’t Work
In the same way TransferWise was designed from the ground up for smaller transfers, for larger transfers ($7000 USD/£4000 GBP/€4500 EU/$9500 CAD AUD) we think other services could be better and here is why.
TransferWise says, “The more money you send, the more your transfer costs. That’s because the TransferWise fee is worked out as a percentage of the amount you’re sending. The percentage varies from currency to currency, and you can check it on our pricing page.”
By comparison, services designed from the ground up for larger transfers simply charge progressively less in percentage terms as the amounts increase.
This means you can be more confident you will pay less in percentage terms as amounts increase and this makes sense when you look into the way services are structured.
1.2.2 Service Structure
While TransferWise has terrific customer service, services designed from the ground up for larger transfers do a number of important things differently.
A) Pre-approval for Larger Amounts
A) Pre-approval for Larger Amounts
Once you get into larger amounts ($7000 USD/£4000 GBP/€4500 EU/$9500 CAD AUD) regulations, Anti-terrorism and Money Laundering laws mean that all money transfer companies require additional information.
This is usually just ID checks but sometimes other documents are required.
Services such as TransferWise tend to make it easier for you to sign up (better for smaller transfers).
Others get everything they need up-front, which it turns out is better for larger transactions.
Those focused on larger amounts tend to ask for more information when you sign up, which means you can avoid a lot of potential issues later in the transaction.
As we saw (below) in the excellent reviews for TransferWise, some negative reviews come from TransferWise needed to ask for more information and freezing accounts.
Now this happens with pretty much every good service, but TransferWise clearly focuses on smaller amounts and easier sign-up.
Part of the beauty of using a really good service is that they become partly responsible for your money arriving.
Different banks in different countries have different rules around how much they can send and the ways to fund your transaction. This means that knowledgeable and helpful customer service who know the ins and outs of each bank can make a world of difference to ensuring your transaction runs smoothly.
TransferWise does a great job of making things work online and then troubleshooting if required. This works extremely well for smaller amounts, but for larger amounts things can get tricky and ideally require human intervention built into the service.
For example, we recently transacted a large amount but the bank we use did not allow direct debit over a certain amount. The only alternative it seemed was to fund the transaction through a wire transaction that required us to go into the branch – not going to happen, as I no longer live there.
Our money transfer provider worked with us on the phone to decide on a few options. The best it turned out was to split the transaction and do it in two amounts. After we agreed they just did it without further input from us and also locked in the rate for both transactions.
This is why we use TransferWise for the majority of our transactions which are smaller but use OFX (review) or TorFX (review) for larger ones. TorFX in particular loves doing business of the phone while OFX strikes a sweet balance between online and telephone support.
2.1 The Real Fees
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 transfer fee breakdown between the two panels as shown.
Divide the “fee” by the amount “You send” and multiple by 100 to get the percentage of fees you pay.
In my example, because I entered £1000: (£4.78/1000) X 100 = 0.478%
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 wire transfer and other providers:
- Banks – 3%-7%
- PayPal – 6%-8%
- Other International Money Transfer Companies – 0.4%-1.8% (variable on the amount and currencies involved)
As we see, 0.478% is extremely competitive. However, this percentage will change depending on a number of factors, which is why we recommend following all 3 steps ↑↑↑ above.
What else should you know?
As I hope we have made clear, TransferWise offers the mid-market exchange rate (essentially the best exchange rate anyone can get) and is transparent about the exact fees including any flat fee 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. This gives your bank time to get the money to them.
They say, “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. For example, once I transacted Saturday morning knowing my bank would take at least 48 hours from Monday morning to send them the money. In the 4 days or so it took for them to get the money, the exchange rate have moved slightly against them, but they still held the rate we originally locked in. 👍
2.2 Hidden Fees
When it comes to smaller transfers one the easiest ways you stand to lose the most money is to not be aware of the fees banks charge at each end.
I call these hidden fees because while you may think money transfer companies are powerless to do anything about these fees they can!
Although it is expensive to have local bank accounts in almost every country in the world, this is exactly what the best services do to avoid (as much as possible) banks hammering you on wire transfers with fees of $10 – $50 USD at each end.
Example: Moving $1000 from USA to the UK.
- Low Cost Fee of Money Transfer Service = 1%
- $10 Fee from sending bank
- $20 Fee from receiving bank 15 GBP $20
Total Fees = $50 or 5% of $1000
From this example, you can see that while the money transfer companies fees are around 1% of the total (this is a very competitive fee) the fees banks charge are relatively horrendous. That said, even if you used an inexpensive service like TransferWise and got hammered at each end by the banks you would still be ahead of the banks which charge 2 – 4% instead of the 1% and do not have local bank accounts!
To a very large degree TransferWise is excellent at having local bank accounts, but no service is perfect so it is good to be aware of them!
3.1 Signing Up
Initial sign up for TransferWise is very straight forward.
It can be done in two ways:
- Sign up using Google or Facebook
- Register on their site starting with their super useful currency guides
3.2 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.
3.3 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).
3.4 Who Your Sending Money To
Next you enter bank details of where you want the money to go.
3.5 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 smartphone, shared with your computer and uploaded to their site.)
Although they 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.
3.6 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 payment methods to pay TransferWise based on the country where the money is coming from.
Options include: (ACH, bank wire) USA, (Faster Payments Scheme, CHAPS) UK, (direct debit, online bill payment) Canada, (bank transfer) Australia, direct debit, debit and credit cards – just to name a few!
3.7 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 which is very reassuring.
When it comes to transaction speeds for bank to bank transfers, TransferWise is on par with the best.
The truth is banks at either end are a much greater part of the time equation, and everything is done in business days.
In theory TransferWise could hold onto your funds for a while (while they sort out everything) but from our experience using them and the reviews, TransferWise is excellent in this regard.
Also TransferWise does something others don’t.
Although not directly helping speed, just like when you are in an airplane stuck on the tarmac and the captain continually reassures you and updates you on the situation, TransferWise sends quite a few helpful emails so you know exactly what is going on.
4.1 Real Speeds
TransferWise is pretty vague (understandably) because transactions can literally take 1-5 working days.
They say, “Every currency and country is different. Converting your money can take a maximum of 2 working days, but it’s very rare that it takes this long.”
But the “2 working days” mentioned, is just the conversion side (B shown in the diagram below). After using them multiple times for their part they seem to transact in hours not days, but then again we are working with major currencies like (USA, GBP, EUR, AUD, CAD, NZD, SGD).
They also say, “And how quick your transfer arrives depends on how quickly your recipient’s bank can process your money, as well as the ways you’re able to pay in the country you’re sending from.”
This is the same for every money transfer company focused on bank to bank transfers.
TransferWise does however have a trick up its sleeve (for a price)!
Transfer speeds can be significantly improved if TransferWise receives your funds through a credit or debit card. This means the whole funding process (A in diagram) goes from days to practically instantaneous.
For most people the fees TransferWise passes on will make them happy to wait a day or two extra, but this option can significantly speed up the process.
But don’t forget the receiving bank (C) will also take its sweet time regardless.
If you use a card (credit or debit), TransferWise can be one of the fastest services around but because of the additional costs associated with this most people just go bank-to-bank.
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/s (A) and (C) and not the transfer company itself.
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 4.6/5 rating based on 85,000+ 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 analyzed 100s, so that you can learn from it. It is important to keep the negative reviews in perspective, as they account for less than 4% of customer reviews.
Most bad reviews relate to these things:
- Accounts Deactivated After a Transfer (Approx. 1%)
- Money Delays (Approx. 1%)
- Better Rates Elsewhere (Less than 0.5%)
- Customer Service (Less than 0.5%)
- Problems With Card Service (Less than 0.5%)
- Other (Less than 0.5%)
Only two stand out and they only represent about 1% each of total reviews, but the first one is a big one.
5.1 Accounts Deactivated After a Transfer
TransferWise seems to have a policy of asking for additional ID if the transaction reaches certain thresholds. No doubt this is related to meeting regulatory requirements.
This benefits most people because there is less hoops to jump through when you initially sign up.
However for a minority, accounts get 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 USD (£4000 GBP/€4500 EU/$9500 CAD AUD). See “When and How it Works (and When it Doesn’t)”
5.2 Money Delays / Lost
A significant number issues relate to the money being delayed. Some believe the money has been lost and some even think TransferWise might be a scam.
This seems like a big problem but in almost all cases what we found has nothing to do with TransferWise at all, and is more about the banks at both ends who take time to process transactions.
If anything, TransferWise shows how good it is at rectifying the situations.
TransferWise claims 6 million customers in 71 countries transacting £4 billion every month and there is no doubt their business is growing like crazy.
But that does not mean they can’t loose or mismanage your money, even accidentally.
However, because of its presence in many countries TransferWise is heavily regulated.
Each country it operates in has its own regulatory framework that TransferWise must abide by. This means that it is regulated by, authorities such as Financial Crimes Enforcement Network (USA), the UK Financial Conduct Authority (UK), National Bank of Belgium (Europe) as an Authorised Payment Institution, the Australia Securities and Investments Commission (Australia), Financial Transactions and Reports Analysis Centre (Canada) and Financial Customs and Excise Department (Hong Kong). It is also regulated in India, Japan, Malaysia, New Zealand, Singapore and the UAE.
At a practical level, one of many measures TransferWise needs to take is to manage funds using separate accounts. These funds are separate from the company’s operating accounts. So in the situation they run into trouble, your money should still be safe.
On top of that, they claim to have”bank level” data security and from what you can see when using them, this is likely the case.
Possibly more importantly – What if they go bust?
We wrote an article about if your money transfer company will be around in 2021 and we were assured by what we found for TransferWise despite its recent fund raise and the fact it is private.
In comparison to others (except maybe public companies) TransferWise seems solid.
Checking out the comparison with other providers on 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.
They also have some leading optional services like Borderless and their prepaid Mastercard which you can use like a Credit Card to access you funds in multiple currencies.
However, as we discussed in When it Works (and When it Doesn’t) ↑↑↑, if you need to speak to human at critical times, or want to transfer larger amounts we think other 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.