Transferwise Review

By | June 14, 2020

 

 

Transferwise

 

 

Just about anyone could be in the need to send or receive monies from overseas.
The solution to this need remains the exclusive reserve of the banking sector. International money transfer is a financial service that aids the cross-border transfer of funds between two parties. These two parties often resided in different countries or continents.

This is beginning to change with the incursion of other players into the money transfer market.
One such player happens to be the subject matter under review.
We will be placing our spotlight on Transferwise to find out what it’s about, how it works, and whether it is right for you.

 

A Brief Overview of Transferwise

Transferwise is an innovative digital bank that offers cheap cross border transfer services. It was launched in 2011 to enable transfers between people rather than between countries.
That way, transfers that would have been subjected to high bank charges are charged very little. The normal charge for transfers through Transferwise is 0.35% + 80p fee.

The Transferwise fee does not include any hidden charges as we know the banks to be.
If you’re new to this service or wondering if it’s right for you, then you’ve got to read right through this review.
Amazing Benefits of Transferwise

1 – Send Money Abroad Almost For Free

One of my favorite benefits of Transferwise is the ability to transfer funds at very cheap rates. It’s so cheap that it almost cost you nothing to transfer funds abroad.
And this funds transfer system is very secure.

A fee of 0.35% of the transfer amount plus 80p is charged for money transfers.
Let’s use this illustration to drive home and find out how cheap the charges are.
Here is John who resides in London and wants to send £1,000 to his wife in Australia. He is charged 0.35% of £1,000 plus 80p – which translates to £3.5 (0.35% of £1,000) + 80p.

That brings the total fee to £4.30 (£3.5 + 80p).
So, Transferwise will charge just a £4.30 transfer fee for a £1,000 transfer from London to Australia.

2 – Very Transparent System

The transfer fee for cross border transactions is clearly stated for all to see. If there are any changes to this fee for whatever reasons, Transferwise makes it clear to users. Fees may be different when transfers involve a less popular country although the fees are also made public.

So here we have the traditional banking system that charges you so much more for transfers. There are hidden charges that may attract deductions from your funds. And also discrepancies in the exchange of the currencies involved.
At the end of the day, the receiver gets much less amount than was sent.
Transferwise offers a much better option where users know what they are charged before using the service.

3 – Use of Real-Time Exchange Rate

Banks are the biggest culprits when it comes to transactions involving exchange rates. You get the shorter end of the stick whenever currency conversion is made.
That’s because currency conversion is a source of revenue for banks.

However, with Transferwise, the story is different as currency conversion is a means of delivering money transfer service. So, real-time exchange rates are used for money transfers on Transferwise.
You can check out real-time exchange rates on Google or XE.com to be sure you got the right rate.

4 – International Money Transfers to 75 Countries

Currently, Transferwise serves 75 of the most popular countries in the world. That means anyone living in these countries can access the money transfer service on Transferwise with 48 currencies supported by Transferwise.
You can also check out these countries on the Transferwise website as the list of countries and currencies is constantly updated.
If you find that your country is yet to be listed, you could leave your vote for it to be added.

5 – Secure Transfers

As far as financial dealings are concerned, security is a paramount concern.
No one likes to subject their funds through an untrustworthy system. Banks go the extra mile to ensure that funds in its care are both safe and secure.

So also does Transferwise, which is a duly certified money service company based in the UK.
As a company that is licensed by the Financial Conduct Authority (FCA), it is bound to comply with the Electronic Money Regulations.

The Basic Features of Transferwise

I – Send and receive transfers from abroad at a very low cost. A fee of 0.35% plus a flat fee of 80p is charged by Transferwise for transfers.
That translates to a transfer fee of $4.30 charged for transferring from one party to the other. This charge does not include the changes brought about by currency exchange.

II – Transparency in all its dealings with users of the cross border transfer service! No hidden charges of any kind as all transfer fees are clearly spelled out.

III – Send and receive funds within 75 countries with 48 currencies supported. Transferwise also allows people to vote in their countries for inclusion if they are not yet supported.

IV – Use of real-time exchange rates for transfers involving 2 different currencies! In this way, every transfer that involves currency conversion can be duly monitored.

V – All transfers are secured as Transferwise complies with the FCA Electronic Money Regulations. Transferwise is also regulated in Australia by ASIC (Australian Securities and Investments Commission) while it’s regulated by the Financial Intelligence Unit in the United States.

VI – Account opening on Transferwise is free with zero account maintenance charge. Also, Transferwise bank cards are free of charge and that includes delivery too.
The withdrawal made through ATM is free up to £200 a month after which a 2% fee applies.

VII – The top-up fee on the Transferwise account falls within 0 to 0.2%, while for certain countries additional charges are applied.
If you look long enough, you will find out many other great features on Transferwise.

Transferwise isn’t just a funds transfer service, but a system designed to compete with the traditional banking system.
It is a way to empower users of its service with low cost, secure, and transparent financial services.
Now that we are all familiar with the Transferwise service, how does it work?

How Transferwise Works

Using the banks to process your international transfers could be on the high side. But Transferwise offers a less expensive alternative for getting your funds across borders.

There are lots of expatriate workers who need to send money to their home countries frequently, or maybe a freelance worker who receives payment from clients abroad. This money has to be received in the country where the freelancer resides.

Transferwise works similarly to the way the barter system was operating in the past.
In a barter trade, one person exchanged what he produces for what he needs.

For Transferwise, the transfer needs are settled without transferring outside a country. The money is instead exchanged locally between two people living in the same country. So Transferwise plays the role of a facilitator to ensure that all parties are duly settled.

For seamless transfers, Transferwise ensures cooperation between all transacting parties.
Once you understand this, you will know why Transferwise money is between people and not between countries.

Pros and Cons of Transferwise

As we move towards the conclusion of this review, it is important that we highlight the pros and the cons of using Transferwise.

Pros

  • International money transfer service that costs very little to send and receive money from abroad
  • A money transfer service that uses real-time exchange rates to ensure accuracy in transactions
  • Transparency in all the dealings – no hidden charges

Cons

  • Users of the Transferwise service can only access their received funds through the banks.
  • There are no instant transfers because transfers have to be paired before completed.

Conclusion

The ease with which people travel abroad has created the need for cross border money transfers.
Expatriates, freelancers, and different job kinds have led to workers receiving payment in different currencies.
These situations have necessitated the need for transfers between people.

The norm was to use international money transfers through the banking system.
Although the banks have serviced this need, we find that high fees and hidden charges are common with the banks. There are also cases of sharp differences in exchange rate transactions in favor of the banks.

Transferwise was founded to deliver money transfer services at a very little cost. The fees are meant to be so minimal that they would be negligible compared to what the banks charged. And Transferwise has managed to maintain this low fee, even in the face of expanding its service.

The money transfer service is currently accessible in 75 different countries with support for 48 currencies.
Transferwise also allows members of the public to vote for their country’s listing if the country isn’t currently supported.

The service is free to join and account holders are charged zero account maintenance fees.
If you reside in any of the supported countries, you may want to give Transferwise a try. It is an innovative service that delivers money transfer solutions at very reasonable fees.
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