Is Transferwise Safe and Reliable?
When I was a student, I had to send and receive money from my home country. I have used traditional banks to make the money transfer.
However, I was disappointed and frustrated every time I made the money transfer through banks and some other money transfer providers. Because, I never had a transparent cost from them and the exact amount I receive was not known until I receive the amount in the bank account.
The money I received every time always different from what I have seen when I set up the transfer mainly due to below factors.
- Unassured mid-market rate: Mid-market rate are not lock in or guaranteed
- Unclear cost structure: The transfer fee was not transparent and always contains an hidden cost
Out of frustration, I was looking for some other money transfer transfer providers and I came to know about Transferwise through one of my friend.
However, honestly I was not confident of using them to transfer money as it concerned me with safety of my money. But, since, I was losing lot of money with traditional bank, I though to try out Transferwise.
I also checked and confirmed that Transferwise is providing their services since 2010 and they are financially regulated in each country they operate.
Since I have started to use them from 2012, I never looked back and I’m still using Transferwise to send money aboard.
In this article, I will explain in detail if Transferwise is safe and reliable and what best values they offer and some limitation they have.
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Is Transferwise Safe: What is Transferwise?
Transferwise is an innovative online platform provider to seamlessly transfer money across countries. Their mission is to provide a low transfer cost with a transparent fee structure and coverts the money truly at mid-market rate as supposed to traditional bank.
TransferWise currently supports transferring money to 60+ countries and sending money from 40+ countries. Transferwise claims to have 8 million customers and transacting $5 billion every month and $1.5 billion saved by customer every year.
Is Transferwise Safe: How Does it Works
You will have to create an account with Transferwise either by sign up using Apple, Google or Facebook or registering with email in Transferwise website.
Once you created the account with Transferwise, you will have to set up the local account of the person who you want to transfer the money. Ofcourse, you can transfer to your own local account by setting up your local account as the one you want to send the money.
After set up the local account of the transferee, you can initiate the transfer from one currency to another by making a bank payment to Transferwise. Soon after Transferwise receive your money in their account, the money is converted and sent to your transferee account.
In my experience, the average transfer time I have witnessed is less than 2 hour, provided the transactions are initiated during normal banking hours. However, it is entirely depends on the amount of time the local bank account takes to receive the money.
Once you initiated the transfer, you can track the progress of the transfer right from you sending money from your account to Transferwise and till the money is received in local bank account. For each of these steps, Transferwise will also send an email with update to reassure the transfer.
What Financial Services they Offer
Transferwise not only provide international money transfer service but they also offer Multi-currency account (Borderless account) with an access to Debit Mastercard.
Transferwise Multi-currency account enables you to hold and manage money in 50+ countries with an access to international bank details. You will get below countries bank account details and can be used as local bank. This means anyone can pay you just like they’d pay a local in your accounts.
- British Account Number and Sort Code
- European SWIFT/BIC and IBAN details
- US Routing (ABA) and Account Number
- Australian BSB Code and Account Number
- New Zealand Account Number
- Hungarian Forint Account Number
You can use money in your multi-currency account to send money to 80+ countries in Transferwise. This is seriously awesome and a great innovation in financial services.
In addition, the TransferWise multi-currency account provides you a debit card same as a traditional bank. However, in contrast to traditional bank, Transferwise borderless account debit card lets you spend money anywhere in the world at true mid-market exchange rate at low conversion fees and zero transaction fees.
- Free to pay with currencies in your multi-currency account
- Free withdrawals with debit card with a maximum of up to £200 a month
- Conversion fee is very minimal, typically ranges from 0.35% to 1%
- Money can be converted automatically at the real exchange rate
How Much it Cost to Transfer
Banks usually provides exchanges rates below market-rate and their fee includes profit margin and fee structure is not transparent.
However, Transferwise is radically transparent about their transfer fee and they charge a low cost for the transfer.
In other words, there’s zero markup on the exchange rate with a low transfer cost and their cost breakdown is clearly outlined.
Transferwise also provides an instant comparison with other money transfer service providers and helps to realise how much you can save from your transfer.
How Transfer Fee is Determined
The transfer costs depends on three factors: the money you transfer, Payment method, and the exchange rate.
The Money you Transfer
The TransferWise fee is worked out as a percentage of the money you are transferring. This means the more money you send, the more your transfer costs.
The percentage changes from one currency to another and it can checked in their pricing page. However, the good news you will be charged a cheap, minimum fee when transferring a small amount of money.
It depends on the country you are transferring the money from because there are different ways to pay for each country. When you initiate the transfer, you can see the can the transfer cost for each payment method.
Bank transfer is the most common method of transferring money to Transferwise and it is usually the cheapest payment method.
However, transferwise accepts other different ways of payment such as debit and credit card, apple pay, and android pay.
But not every country have all these payment options and it varies from one to another country. You can easily check what payment types and the cost instantly on their pricing page.
The Exchange Rate
Unlike banks, Transferwise do not mark up the exchange rate and you always get the mid-market rates. As a result, your recipient gets more amount of money at the other end.
However, this advantage cannot be enjoyed unless the mid-market exchange you see at the time of initiating your transfer is locked in.
Good news that Transferwise guarantee exchange rate upto 24 or 48 hours. This means you can lock in the exchange rate you see at the time you setup transfer.
But it is crucial that should they receive the money in their account within specified timeframe. You cannot get the guaranteed rates if you do not transferwise money within specified timeframe.
In such a case, your recipient receives the money based on moving mid-market rates and not the guaranteed rates.
Most banks and other online money transfer providers charges additional fee which is embedded into their transfer and usually their fees structure is not transparent.
However, there is no hidden fee with Transferwise and their core mission is to provide a transparent fee structure.
When you set your transfer up, you can clearly see what you transfer cost you pay for the amount you send.
Fees to Hold Borderless Account
There is no fee to open a borderless account and there are no annual fees or monthly subscription fees.
Multi-currency account with Transferwise are found to cheapest compared to traditional banks based on the study conducted by Consumer Intelligence.
The research concluded that multi-currency account is an average 9 times cheapest that than multi-currency account offered by traditional banks.
It is ofcourse cheaper but it is not completely free and there are some fixed charges and a low conversion fees in below cases.
- Sending money from your multi-currency account to a traditional bank account – A fixed charge and small conversion fee.
- Spending in a currency that you don’t have in your multi-currency account – A small conversion fee between 0.35% to 2.85% varies from currency to currency.
- Add money to multi-currency account from a bank account is free but with other payments such as credit or debit cards have a fees. This fee varies from currency to currency.
- Withdrawing money from your multi-currency account to a traditional bank account – A fixed charge and small conversion fee.
- If you’re sending money from your account to a bank account outside of TransferWise, we charge a fixed fee. We’ll also charge a conversion fee if you send money to a different currency.
- Pay with your borderless account debit card with currency that you do not hold an account – There is a conversion fee between 0.24% and 3.69%.
- Withdraw money from ATM above allowed limit of £200/$250/350 Australian Dollar/350 NZ Dollar/350 Singaporean dollar per month in total – Charged 2% withdrawal fee.
It depends on four different factors as follows.
Where you are transferring from and to
The time it takes to transfer is different for every country and currency. Transferwise advocate a safe transfer time of 2 working day at the max but it is usually quicker than 2 days.
For every transfer I have made from the UK, the transfer was completed within few minutes and some times surprisingly within few seconds more like a real time money transfer between two UK bank accounts.
There are various ways I have discussed above to make payment to Transferwise. Usually, a card payment are fastest among all other payment methods. However, it is not the cheapest.
In contrast, bank transfer takes a while but it is cheapest among all other payment methods. You need to make a tradeoff when it comes cost vs transfer speed.
However, I never experienced a significant difference in transfer time between card payment and bank transfer. Most of my payments were made via bank transfer.
The Time you Setup Transfer
Transferwise move the money only during the normal banking hours. When you are setting up transfer on Friday evening or during the weekend or bank holiday, it will take longer than usual to transfer your money.
For example, if you setup transfer on Friday evening, it is likely that your transfer will complete only on Monday. This means your recipient receives money before the end of day on Monday.
Transferwise will have to verify your identity, source of the money and address after you initiate a transfer. This is especially happens when you make a transfer for large amount.
This might slow things down a bit but it can be quickly resolved if you provide what they require for verification. For example, they ask to submit a bank statement for verification.
You can check the time it takes to transfer on their homepage without even having to login or signup.
Is Your Money Safe with Transferwise
Transferwise is being used by more than 8 million customer all over the world with transaction of more than $5 billion every month.
I personally use Transferwise for since 2013 and I never had any issues in relation to safe transfer of the money.
There are very few times, I made under payment and overpayment than my original transfer amount. In all those cases, the money was returned back to my account safely.
However, this does not qualify them to be safe. For any financial service provider to be qualified as safe and legit, they should be regulated by regulatory agencies of the specific country.
These agencies are primarily operating to protect the consumers and keeping the industry stable. Financial service provides regulated by these regulatory agencies have to strictly follow the set of the rules set by them.
Transferwise is regulated by regulatory agencies in every country they operate. Below are some of the example of regulation authorities that Transferwise must strictly follow their rules.
- UK – Financial Conduct Authorities (FCA)
- US – Financial Crimes Enforcement Network (FinCEN)
- Australia – Australian Securities and Investments Commission (ASIC)
- Singapore – The Monetary Authority of Singapore (MAS)
- Canada – Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
The above is not an exhaustive list as Transferwise is operating in 71 countries such as India, UAE, New Zeeland and many more.
Is Transferwise Safe and Suitable for Large Amounts
Transferwise allows you to set up account quickly and initiate transfer for small amounts. However, when it comes to large amounts, any money transfer provides has to do additional verification as per the guideline from regulation authorities.
I personally had some issues when initiated the transfer above £10000 for the first time. I had set up the transfer and also made bank transfer to Transferwise.
However, the transfer was not completed and I was asked to provide further information such as bank statement. This is primarily to verify the source of the money.
Soon after I submit the bank statement online, the transfer was completed immediately. Thereafter, I did not have any issues when transferring large amounts.
Transferwise is safe and reliable for large amount transfers but there are some steps you may take to avoid any issues or delays.
To avoid the issues or delays, it is best to complete verification before you make first big amount transfer. Transferwise verification includes verifying your ID, address or source of funds.
Additionally, you need to check if your banks has any limits to send the money per day. For large amount, usually it is might be useful to go into bank in-person so the money can be transferred quickly to Transferwise account.
If in case, you cannot visit in-person to the branch, you may split the transfer into multiple transaction rather than making one-off transfer.
Pros and Cons
None of the money transfer providers are perfect and there are some advantages and limitations to watch out.
- Instant transparent transfer cost
- Guaranteed rates from 24hrs to 48hrs
- Cheap transfer cost
- User friendly website
- Late additional checks for large transfer
- Limited support on telephone
Border Less Account
- Transparent fees structure
- Hold and manage money in 50+ countries
- Bank account details for 6 countries
- Free Debit Mastercard
- Limitation on some transaction
- Only some countries can hold borderless accounts
- High transaction charges on USD outside of US
Transferwise is an excellent innovative platform to send money across countries. Tranferwise is regulated by regulatory authorities in every country they operate. Transferwise is safe and reliable for both small and large amounts of transfer.
Tranferwise borderless accounts is an innovation at its best in financial services. This enables you to hold international accounts as like local accounts and manage money with 50+ currencies.
Transferwise is cheapest and fastest among the banks and other money transfer providers. The transfer fee and the times it takes to transfer the amount can be checked in their homepage even without having to login or signup.
They have an incredibly simple and online platform which also lets you compare the cost with other providers and saving you can make from a transfer.
Move money across the border seamlessly at a cheap cost with Transfewise.