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ransferWise, the best way to transfer money abroad or to have a bank account in foreign country.
If you ever had to send money abroad, you must have experience the complexity of the transfer and associated high bank fees. These high fees are in addition to the modified “exchange rates” that always have additional hidden fees that increase the price once more.
In my research of finding the best solution to transfer and to hold money abroad which would minimize the fees, I came across TransferWise.
What is marvelous about TransferWise, it’s that they use a unique system to move money from one country to the other which makes their services much cheaper.
As an added benefit, it’s also much faster than your bank. All in all, TransferWise fees are about 8 times lower than any big bank!
Even if you are not transferring money to people abroad, TransferWise makes it easier for you to hold and access money in multiple countries. This comes handy for freelancers or people that sell accross border. In my case, I am receiving money in another currency in a TransferWise account without any double currency exchange.
In this review, I will cover how TransferWises services works and how do they compare to competitor such as Xoom, Western Union, Money Gram and others.
A Bit of TransferWise History.
TransferWise is an international money transfer service that was launched in 2011 by 2 Estonians, Taavet Hinrikus and Kristo Kaarman who were tired of losing time and money transfering funds into different currencies.
Nowadays, Transferwise is based in London city and has over 8 million customers worldwide who transfer more than 6 billion each month. With this system, they help customers save millions everyday
How Does Transferwise Work
As it was said before, Transferwise help you send, receive, hold and spend money internationnaly in more than 70 countries at a fairly low cost, compared to the competition.
If you look at the traditionnal way to do the same thing, it would involve some banks who had some points to the exchange rate, called the interbank rate or the mid-market rate.
Additionnaly, these banks will add some other extra hidden fees to that costing you a hefty margin.
Transferwise on the other hand, you pay a small upfront fee, nothing hidden, and they exchange the money at the mid-market rate which they guarantee for a certain period of time. You can easily confirm the exchange rate using Xe.com or Google.
They are hard to beat when it comes to be as close as possible to the exchange rate compared to most bank and credit card.
As such, with the transparent low fee and real exchange rate conversion that Transferwise charges, you will enjoy significant savings.
If you are convinced already, sign up for your account now and make your first transfer!
TransferWise � Pros and Cons
Here is a quick overview of some of the benefits of using Transferwise are:
- Convenient and cheap international transfers without leaving the comfort of your home;
- Fair competitive mid-market exchange rate and transparent upfront fees (No hidden fees);
- Versatile and user friendly mobile app;
- Excellent multi language and multi country customer support;
- A free multi-currency account giving you the ability to hold balances in over 40 currencies in multiple countries; and
- Great for individuals, freelancers blogger and businesses.
Every good side has some bad. As such, here are some of the complaints posted by users online include:
- Account deactivation without prior warning;
- Delayed account verification;
- Ocassional delayed transfers;
- Limits on amounts that can be transferred;
- Limited support on weekends; and
- No cash pickup option.
Achieving the Lowest Fee Possible
You might wonder how is Transferwise even able to offer such a low fee.
It’s actually quite simple.
They have a very innovative approach to keep the money local and not transferring it accross border.
It migth sound counter intuitive because we are talking about money transfer aren’t we?
First, Transferwise holds accounts in several countries across the globe and uses those to transfer funds to you whitout sending any money outside.
Here is how it works.
Let’s take me as an example.
I want to send some money to someone in the United State, let’s say a friend in need. Instead of transferring my money across the border, Transferwise will use it’s local United State branch and send my friend the funds in USD.
In turn, I will pay the local Canadian branch of Transferwise with CAD.
Also, the reverse is true.
If I want to send myself some money held in the United State, they will transfer the CAD money from the local Canadian bank account and I they will keep my USD in their own USD account in the United State.
To summarize this, they always keep the money local, removing the need to actually move money across borders thus keeping the fees pretty low.
How to Use Tranferwise Services
The first step is to open up an account with Transferwise.
It’s easy and can be done under 10 minutes!
When you are creating your account, you will need to verify your identity by providing the required ID and a proof of address. Don’t forget that it can take 2 days for Transferwise to verify your identity. As such, you better do those step before you have to send money.
Additionally, you need to have a method to pay for those transfer, be it bank transfer, debit card, credit card, online bill payment, SWIFT, wire transfer, etc.
Banks Supporting Automatic Debit to Transferwise (Canada)
Here is a list of bank and institution number that support the automatic debit from your account to you Transferwise account:
- Bank of Montreal (BMO) – 001
- Bank of Nova Scotia – 002
- Royal Bank of Canada (RBC) – 003
- Toronto Dominion (TD) – 004
- National Bank of Canada (CIBC) – 006
- Canadian Imperial Bank of Commerce (CIBC) – 010
- President’s Choice Financial (PC) – 010
- Hong Kong & Shangai Banking Corporation (HSBC) – 016
- Tangerine Bank – 614
- Vancity – 809
- Caisse Centrale Desjardins – 815, 829, 865 or 890
Bank Supporting Bill Payment to Transferwise (Canada)
A good way, and the least expensive in Canada, is to use bill payment to transfer money. And, here is a list of the bank, and institution number, that support the bill payment transfer method :
- Bank of Montreal – 001
- National Bank of Canada (CIBC) – 006
- Manulife Bank of Canada – 540
- Tangerine Bank – 614
- EQ Bank – 623
- Central 1 Credit Unions – 809 or 828 (encompass numerous other bank)
- Alterna Saving and Credit Union – 842
- Credit Union Central Alberta (First Calcagry) – 899
Transfer Limitation
When you transfer money, you need to be aware of the time it takes for the funds to reach Transferwise depending on payment method.
As an example, in Canada it takes about 1 to 3 days for the payment to reach them.
As such, your correspondant will not get the money before Transferwise receive it.
Also, there are some limitation on the amount of money you can transfer based on the method of payment.
You need to be aware of the following limit examples:
- Local Wire Transfer: $1.5 million CAD per transfer;
- Debit and Credit Card: $3000 CA per transfer; and
- Direct Debit: $9500 CAD per transfer with a $30000 CAD every 2 weeks
Transferwise Fees
There are 2 types of fees you will encounter using Transferwise, fixed and variable.
The fixed fee relates to the method you use to transfer the money and the variable is a percentage of the total amount of the transfer.
The variable fees relates to the currency used in the transfer and will change from currency to another.
The exchange rate is variable but Transferwise will give you the mid-market rate which has no markup or hidden fees. Also, depending on the currency, the rate may also be guaranteed for up to 48 hours. Here is an example on fees.
Let’s say that I want to send money to a family member in the United State (USD). The following fees would apply using the cheapest option for transfer, bill payment
Note that the exchange rate found is the same as on Google.
In addition to the bill payment options, there are several other option you can choose from to pay for your transfer:
- Direct Debit: 3.09 CAD
- Debit Card: 15.36 CAD
- Credit Card: 21.62 CAD
- Domestic Wire Transfer: 0.75 CAD
These fees are in addition to the 8.71 CAD basic fee of Transferwise.
Now, it’s time for a quick comparison against the competition:
- RBC Online Banking: 13.50 CAD with an exchange rate: 0.7661
- RBC in-Branch Wire Transfer: 42 CAD with an exchange rate: 0.7661
- Paypal Balance: 4.00 CAD and a minimum of 4% of amount (40 CAD)
- Desjardins: SWIFT at 15 CAD with an exchange rate of 0.76219
As you can see, Transferwise is still the cheapest option to use mostly because they offer lower fees and a more accurate and fair exchange rate that does not include any hidden extra fees.
You are now ready to sign up for a Transferwise account!
If not, continue reading for even more Transferwise greatness!
How to contact TransferWise?
You can reach their support team via email, phone (1-888-445-2780 for Canada).
Also, the in-app chat is availlable but only if you are logged in.
TransferWise multi-currency account
When you open an account with Transferwise, you can get a multi-currency account.
Basically, it’s a borderless account that makes it easy to send and receive payment in multiple currencies at the exchange rate that Transferwise offer.
Also, there are no fees nor minimum balance to keep it open.
This account is a great option if you are dealing with person abroad or have a business that does transaction with other business abroad.
When you open up the Transferwise multi-currency account, you get:
- British account number and sort code;
- European IBAN;
- US account number and routing number;
- Australian account number and BSB code; and
- New Zealand account number
This means that you can get paid or receive money in any of those countries as though you had a personal local bank account without having to convert currencies.
Additionally, it makes it easier to pay out money to your recipient in those currencies without any conversion.
Also, Transferwise can convert currencies (0.35%) from one to another in your multi-currency account for a small fee. However, you still keep the save favorable mid-market exchange rate.
The multi-currency account is one of feature that made me choose Transferwise.
Instead of opening a US dollar account back in Canada, the multi-currency account give you access to multiple foreign account in multiple countries in various currency.
Also, even though you are residing in Canada, these account function exactly like a local bank account.
As such, I can easily receive payment in any currency without losing money due to an unfair exchange rate and high fees.
Additionally, if you reside in the USA, Singapore, Australia, New Zealand, United Kingdom, Switzerland or anywhere in the Eurozone, you can get a Transferwise debit card that can be used internationally and would use your balance instead. As such, in cunjonction with your multi-currency account, it adds up for huge savings.
Transferwise and regulation
You are in your rights to ask if Transferwise is a legitimate company and if all those goodies are not a scam.
You can sleep safe knowing that it’s a legitimate financial company regulated by the relevant regulation authorities in the various country they have offices and provide financial services. As such:
- Canada: They are regulated by Authorité des Marchés Financiers (AMF) and are registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
- United States: Registered with the Financial Crimes Enforcement Network (FinCEN). Their funds are held in banks that are insured under the Federal Deposit Insurance Corporation (FDIC). Also, they are registered with local authorities in numerous states.
- United Kingdom: Authorized as Electronic Money Institution by the UK Financial Conduct Authority.
- Australia: They are regulated by the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA). Also, they are reporting with the Australian Transaction Reports and Analysis Center (AUSTRAC).
- New Zealand: They are supervised directly by the Department of Internal Affairs (DIA).
- India: Approved by the Revenue Bank of India.
- Japan: They are regulated by the Kanto Local Financial Bureau and licensed as a Funds Transfer Provider.
- Singapore: They are licensed by the Monetary Authority of Singapore (MAS) as a major payment institution.
- United Arab Emirates (UAE): They are regulated by the Abu Dhabi Global Market Financial Service Regulatory Authority.
Transferwise and EQ Bank
In December 2019, Transferwise and EQ Bank made a partnership to offer the cheap and transparent international transfer to EQ Bank customers.
What does it mean for you?
If you are an EQ Bank customer and you hold an EQ Banck Saving Plus account, you can now send funds directly in 17 currencies to recipients in over 46 countries using your EQ online account of the mobile app.
One of the great advantage of being a EQ Bank customer is that they offer a competitive interest rate on any balance you hold in your account.
The End
Transferring money internationally with high bank fee and extra exchange rate markup, can significantly reduce the money you save. When you use Transferwise, you have access to transparent and lower fees that you aware up front. As such, instead of handing your money to banks, you are keeping in for yourself.
In conclusion, whether you are receiving money from abroad, for service rendered or your pay, sending money to a friend or relative, when you use a reliable and cheaper money transfer service, it will make your life easier
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