TransferWise Money Transfer - Review
Transferwise Review - Fees, Pros, Cons and More
With an increasingly interconnected global economy, the international money transfer sector is continuing to grow, with businesses and individuals alike looking to send money abroad more and more often. Individuals may want to send money abroad to family members in less affluent countries. At the same time, companies often need to exchange currencies for paying workers and suppliers or convert payment from clients abroad into their domestic currency.
Transferwise is a great option to access the FOREX market and transfer money overseas, both for individuals and businesses (via a Transferwise for Business account.) They help some 6 million people transfer money abroad per year, to the impressive network of countries they serve.
But how does Transferwise stack up against the many alternatives available in today's global currency transfer market?
Click Here to For More Information on Transfers and Rates
The Benefits of Using Transferwise
Transferwise's currency transfer solutions offer distinct benefits, most of which can be reaped by both businesses (small and large firms alike) and individuals.
Transferwise Fees Are Low
Transferwise's principal unique selling point (USP) is offering currency exchange at the real mid-market rate, which results in lower fees for customers.
Transferwise aims to make transferring money abroad affordable for all. Offering exchange rates that match the underlying exchange rate in the FOREX market is one way they're trying to achieve this.
Essentially, this means they don't charge a "spread" on currency exchanges, so you're converting money at the real, live rate with them. In contrast, the vast majority of currency brokers and online payment transfer services including the likes of PayPal and Skrill charge a spread, so you get less bang for your buck.
Transferwise's fees are transparent and spelled out before you make a transfer. Instead of paying a spread, you are charged a transfer fee, which varies depending on the amount you're sending and the end location.
According to Transferwise, if you send £1,000 to a European country through their service, you are charged a transfer fee of £3.95. Hence, the receiver gets EUR 1,189.81 (based on the mid-market exchange at the time of research.)
If the same amount was sent via Barclays' bank, the recipient would only get EUR 1,161.20, with the fees coming via the spread they charge, not a transparent fee.
Alternatively, the recipient would only get EUR 1,157.59 via MoneyGram. Via Nationwide bank just EUR 1,142.58 (they would charge a £20 fee plus a spread margin on this transaction), so almost EUR 50 less than if they had used Transferwise.
Fast Delivery
Payments sent via Transferwise can arrive in the recipient's account in a matter of hours, far quicker than many of its rivals for international currency transfer.
As for the example transaction outlined in the previous section, this would take up to 12 hours to be received, while the receiver will have to wait up to a day to receive the funds via Barclays' bank transfer. Alternatively, the delivery time is 2-4 days with MoneyGram and up to four days with Nationwide bank.
It should be noted that Transferwise's delivery times vary depending on the end location (it's likely to take longer than 12 hours if the recipient is in quite a remote location.) Furthermore, there are some faster alternatives, including a few online payment providers, such as PayPal.
User-Friendly Platform
Transferwise's online platform is easy to use and very user-friendly. To send money abroad, you simply open an account with them for free, select an amount to send (they'll display their fees as you do this), and add the recipient's bank details.
You may be asked to verify your identity, especially for more significant transactions, by uploading a scan of your passport or another form of ID, before funding your transfer. For most countries, the only way to fund your transfer is via a bank account, but with a select few, you can pay through a credit or debit card.
You'll then be able to track the payment and notified when it reaches the recipient's account for them to spend or withdraw.
Wide Coverage
Transferwise currently allows you to exchange money between 51 currencies, including all the major fiat currencies and facilitates transfer to and from 59 countries, including Thailand, India, Brazil, and Australia, plus most of Europe and the US.
This sizeable network means that in most cases, you should be able to send funds to your target unless it is very obscure. Transferwise, by no means, has the most extensive global coverage. Still, its network is more substantial than many of its rivals and is likely to be sufficient for most users.
Regulation and Security
Transferwise is regulated by the UK's Financial Conduct Authority (FCA). As such, Transferwise must strictly adhere to rules and regulations which are designed to ensure customers are being treated fairly and their funds are protected.
For example, customers' funds are segregated (held separately) from Transferwise's. They are also regulated by the Financial Crimes Enforcement Network (FinCEN) in the US, in addition to other European and Asian regulators.
With regards to security, the company has an in-house team that works around the clock to ensure its customers' funds and data are protected.
Click Here to For More Information on Transfers and Rates
The Drawbacks of Using Transferwise
Although Transferwise is rated highly by customers on various trusted review sites, it does have a few drawbacks and factors to take into account.
Limited Payment Options
As already mentioned, for most customers, the only way you can fund your transfers is via a bank account. This may put off some customers who would prefer to pay via a credit or debit card, and many alternatives are far more flexible in this regard. It is, however, worth checking if Transferwise offers such payment methods in your country.
This limited flexibility is also the case for recipients. In essence, you can only send funds directly to their bank account, not as a cash or check pickup.
Strict Verification Process
As part of Transferwise's efforts to ensure the security of its customers' funds and that its services aren't being used for money laundering, users are required to verify their identity before sending funds.
To verify your identity and address, you'll be asked to provide two documents, such as a recent bank statement. (mobile phone bills currently aren't accepted for this purpose, according to Transferwise.)
Customers in the United States are required to provide their social security number (SSN). Even with Transferwise's robust security and data protection practices, this is something that some people might not be comfortable with.
No Telephone Support
Although most customer rate Transferwise's customer support and user experience very highly, the lack of telephone support may be an issue for some. This is especially likely to be an issue if you're looking to resolve a technical issue quickly or seek clarification about their verification process and associated requirements.
Coverage Could Be Better
Transferwise's reach is comprehensive and far-reaching enough for most individuals or businesses. Still, if you're looking to send and receive money from multiple countries, some of which are in far corners of the globe, you may find their coverage to be somewhat lacking.
It's unclear if Transferwise is looking to widen its network and begin offering their services in more countries. This certainly would be an excellent way to improve their service and appeal to more customers, especially businesses.
Banks Are More Cost-Effective for Large Amounts
Transferwise's low fees mean that using their services to transfer money abroad is likely to be more cost-effective than using a bank in most cases. Still, if you're sending a particularly large sum, then you may find that some banks' fees offer a better value.
It's important to remember, however, that Transferwise offers conversions at the actual mid-market rate. Keep market rates in mind when you compare fees with other providers.
Transferwise Alternatives
There are countless international money transfer and payment providers operating in today's saturated market, so there's plenty of competition and alternatives to pick from. However, in most areas, Transferwise comes out on top.
PayPal
Likely, you've already used PayPal to pay for online shopping or to quickly send money to a friend.
While PayPal has far more users than Transferwise, you will find Transferwise to be more cost-effective. Unlike Paypal, Transferwise exchanges your money at the actual mid-market rate. And Tranferwise transparent fees are on the low side.
However, PayPal's global status as a trusted payment solution means that most businesses still use their service over other, cheaper alternatives, such as Transferwise.
With regards to speed, PayPal does offer instant transactions, but sending money can sometimes take 5-7 working days, if you are paying via an e-cheque, for example.
Banks
Retail banks, such as HSBC, Barclays' and Nationwide, all offer money transfer and exchange services. Fees are likely to be higher than if you used Transferwise, as they charge a spread on the exchange rate, and sometimes a fixed price as well.
However, for substantial transactions, you may find certain banks to be more cost-effective than Transferwise.
Delivery times vary quite heavily from bank to bank. Still, you are looking at at least a few working days for global currency transfers and immediate to a few hours for domestic bank-to-bank transfers.
MoneyGram
MoneyGram is the world's second-largest money transfer provider, only behind WesternUnion. They have a wider reach than Transferwise, and their fees are often lower for large transactions. However, customers have reported difficulties using their platform and received just an overall one-star review on Yelp.
What Transferwise's customers say...
There are over 80,000 reviews left on TrustPilot by customers of Tranferwise.
86 percent rated their service as excellent,
8 percent as great,
2 percent as great,
1 percent as poor, and
3 percent as bad.
Verified reviews described the service "very efficient and quick" with "very reasonable fees" and "excellent exchange rates." Moreover, some described the platform as "very intuitive" and "easy to use."
One review simply described Transferwise as "the best transaction company."
However, some reviewers pointed out that MoneyGram is often cheaper for large transfers.
A Quick Transferwise Review Summary
Transferwise is a popular choice to send and receive money abroad, with over 6 million individuals and businesses using the service per year.
Their unique selling point is they exchange funds at the real mid-market rate instead of charging you a spread (as banks and most other alternatives would do.)
Instead of charging a spread on exchanges, Transferwise charges transparent fees, which vary depending on the size of the transaction.
Using Transferwise to send money abroad usually works out cheaper than sending the funds via a retail bank or PayPal.
Transferwise's platform is easy to use, and the funds can reach your recipient in a matter of hours. However, this varies depending on the location.
Transferwise allows you to exchange money between 51 currencies, including all the major fiat currencies. And their network consists of 59 countries, including Thailand, India, Brazil, and Australia, plus much of Europe and the United States.
Transferwise is regulated by the FCA in the UK and FinCEN in the US.
In most cases, they only allow customers to fund their transactions via a bank account. However, some users have the option to pay via a debit or credit card.
Banks and some other global payment providers, such as Western Union, have more extensive networks.
Alternatives to Transferwise include PayPal, MoneyGram, and high street banks. However, few can match their low fees and quick delivery times.
86 percent of reviews left on TrustPilot describe Transferwise's service as excellent, while just four percent describe it as either poor or bad.
One reviewer simply described Transferwise as "the best transaction company" in the world. In contrast, others said it's easy to use and has excellent features.
Click Here to For More Information on Transfers and Rates