Transferwise Editorial Review Summary: “Transferwise is the hottest startup in international payments bar none, and in just a few years, it has managed to become one of the most popular choices for expats and immigrants. It has one of the best online systems, transparent rate system, and small, fixed, margins on all transfers regardless of amount. Transferwise is indeed a Transfer Wise company for those who use it”.
Is Transferwise Reliable? Is Transferwise Trustworthy?
Transferwise is one of the hottest startups in the world right now, and it is considered a market leader in the Fintech sector, with a valuation of more than a billion dollars. It has grown at a staggering pace of more than 100% in sales each year for the past 4 years, and has recently reported that it is moving more than $500m every month for its clients. There are currently more than 700 employees working for Transferwise in 7 locations around the world.
Transferwise has definitely come a long way since its inception in 2010 (and launch in 2011).
It was established by two Estonian Fintech innovators, Taavet Hinrikus, (Skype’s first employee) and Kristo Käärmann, both of whom were working in the UK, and experiencing the high costs of bank-powered international money transfers. Quite early on in their journey to lower the costs of cross border remittances, they received a massive shot of encouragement in the form of two mega-investors who believed in the idea, and jumped on the Transferwise wagon. These two investors were PayPal’s co-founder, Peter Thiel, as well as Virgin’s founder Richard Branson.
Here is a complete overview of Transferwise’s investment rounds:
Index Ventures (VC), IA Ventures (VC), The Accelerator Group (VC), Kima Ventures (BV), Seedcamp (VC), Max Levchin
SV Angel (VC), Valar Ventures (VC), Peter Thiel
Valar Ventures (VC), Peter Thiel, Richard Branson, Index Ventures (VC), IA Ventures (VC),
Anderson Horowitz (VC), Index Ventures (VC), IA Ventures (VC), Seedcamp (VC), Valar Ventures (VC)
Anderson Horowitz (VC), Valar Ventures (VC), Baillie Gifford (PLC Company)
Total to date
Anderson Horowitz (VC), Index Ventures (VC), IA Ventures (VC), Seedcamp (VC), Valar Ventures (VC), Peter Thiel, Richard Branson, The Accelerator Group (VC), Kima Ventures (BV), Seedcamp (VC), Max Levchin
October 2017 update: Transferwise raised another $280,000,000 making it one of the most funded startups ever with a total of $440,000,000.
The Transferwise Peer-to-Peer mechanism (How Does Transferwise Work?)
The concept behind Tranferwise is as follows – the platform tries to automatically match transfers from both ends of one currency pairing (for example: one client is buying Euros for Sterling, and another one is buying Sterling for his Euros). This approach enables the company to significantly drop remittances prices in many different corridors, and generally speaking, makes it one of the cheapest and most transparent payment providers in the world.
The entire process is performed below the surface, so transfers are executed instantaneously, and the margin is always fixed – whether Transferwise managed to match the trade using the peer-to-peer money transfer system, or whether it had to exchange the money itself. The user is completely unaware of what’s going on behind the scenes, and he honestly doesn’t mind as long as he is getting superior better rates than he would with other providers.
There are other companies using Peer-to-Peer technology, most notably Currencyfair. You cab view the following Transferwise VS Currencyfair comparison to learn more about the difference between these companies.
Transferwise’s advertising campaigns:
The company is advertising heavily on billboards (including in the London underground), as well as on television and online. It is constantly covered by financial and technology journalists around the world, and managed to get into the mainstream quicker than any other company in this industry.
Its campaigns were so effective, and so memorable, that even large banks began noticing them. The old slogan “YOUR BANK IS SECRETLY OVERCHARGING YOU ON INTERNATIONAL MONEY TRANSFER” was adjudicated by The Advertising Standard Authority, following complaints from these banks.
Update: Transferwise has suffered additional obstacles a result of its advertising campaigns. In May 2016, the advertising watchdog commanded Transferwise to be more specific about the savings it offers in each route, in comparison to banks, rather than saying that it helps clients save 90% of transfer costs. Transferwise has also been mocked by the AmericanBanker magazine, as the company is now seeking bank funding.
Our take on this? Transferwise is catching fire because it is growing in such a rapid pace. As a Branson-backed company, it appreciates any form of attention – positive or negative, and it works out perfectly.
Financial Conduct Authority (UK)
WEF Tech Pioneer in 2015
EY Entrepreneur Of The Year UK 2015
FT’s Boldness in Business Award, 2014
Best European Startup, Europas European Tech Startup Awards, 2013
Transferwise is probably the sexiest name in the whole money transfer industry. Established by notable entrepreneurs who became aware of a significant problem and sought to fix it, the company is taking an entirely different approach from the entire remittances industry.
Its low rates, transparency, great on-boarding process, and mind-blowing advertising campaigns have gained it a status as one of the largest payment providers in the world, as early as 5 years from its launch. This is a “startup” that is already moving billions across the globe and fighting with industry giants like Western Union and Moneycorp.
Is Transferwise safe?
There is absolutely nothing to be concerned about when you use Transferwise to move money abroad. It has a sound financial structure, a solid business model, and it is the absolute epitome of client transparency. The company has moved more than $5bn this year alone, and serves thousands of clients from around the globe with an extremely high level of satisfaction. Transferwise is not a scam, although some people tend to think it is because of the ultra-friendly rates, while in fact, it is one of the most credible companies in this industry.
Do Clients Like Transferwise? Transferwise Reviews From Across The Web
There are 30,000+ Transferwise reviews (more than any other company in the foreign currency payments industry) available on TrustPilot, netting the company a 9.5 / 10 rating.
Less than 3% of these reviews are complaints, and 95% of them are glowingly positive.
A small amount of the reviews seem to be placed by marketers who are promoting the service (trying to push their discount codes), but the amount is rather insignificant. Seemingly, Transferwise’s superb advertising campaigns have paid off and gained it such serious recognition.
We have located fewer than 100 Transferwise compalints on the Internet, including one negative experience by one of our readers who responded below. These are some of the complaints dealt with:
Excessive requirements for documents in order to sign up
Some Debit and Credit Cards were not approved for use
Rude customer service
Some currencies are not available in the system
Clients are almost unanimously satisfied with every aspect of Transferwise’s service. Some students, expats, and immigrants have even said that this company has made a substantial change in their lives.
It appears that the main appeal of Transferwise for clients, even more than the superb exchange rates it offers, is the smoothness of the entire experience. An automated online on-boarding process is a huge advantage for the younger generation, and they have become avid users.
The relatively few complaints we have encountered don’t make much sense.
Those who are complaining about the rudeness of the customer service and making accusations are completely contradicting thousands of reviews that are glorifying how kind and respectful the support was. The same goes for the unpopular opinion that transfers are often delayed – this seems to be related to a specific problem at a specific time for a specific client, rather than an across-the-board problem.
Those complaining about excessive documentation appear to be unaware of the strict Anti-Money Laundering regulations that these sorts of companies must comply with. If additional documents were required, it is simply because the regulator (the FCA) demands that from the firm.
The part dealing with unsupported currencies is somewhat justified, as Transferwise doesn’t support as many currencies as some of its competitors like Currencies Direct, but we can’t downgrade Transferwise’s score based on that, as it’s very clearly stated on their website which currencies are handled and which ones are not. Clients who are complain about this have simply failed to read the information that is readily available.
The exchange rates offered by the Transferwise currency transfer are among the best in the business, and in no way comparable to other remittances companies (i.e., companies with low minimum transfers used by overseas workers to transfer money abroad to facilities). For instance Ria Money Transfer and Transfast’s margins are at around the 2-3% mark!
In some particular countries, Transferwise is cheaper (for example, the UK), while in Australia and NZ, it is great, but not as cheap as in other countries.
In some countries, like Russia or Columbia, it seems that Transferwise isn’t particularly competitive. These are currencies that are usually more expensive to transfer money to (“exotic”) but at 2.5% the offering is still sub-par.
Is it possible to beat Transferwise’s rates with popular currencies like Euro, USD, AUD?
The fact that Transferwise is transparent and straightforward is generally very positive, but it is the company’s disadvantage when it comes to high volume transfers. Due to the fact that other companies like Currencies Direct have flexible pricing models, if the transfer is over GBP 25,000 (or equivalent in another currency), it is likely that they could offer cheaper rates than Transferwise. However. it’s always recommended to use Transferwise as a benchmark before you approach other recommended companies and negotiate your price.
Transferwise offers new clients the chance to conduct their first trade for free up to a certain cap (the purpose of this is to check how the system works rather than moving tens of thousands abroad without paying a dime).
Booking a Trade? Pay Attention Rate Limit
In order to secure the rate you see you’ll have to declare a rate limit. If you don’t the rate will be determined by the time the money arrives to Transferwise, and not when the transfer was initiated. That means that due to fluctuations you’ll possibly pay upwards of 1.5%, instead of the fixed 0.5% margin applied. Worse than that, payments could end up lower than the agreed sum, which will require a second transfer or cause a payment to be void.
Declaring a rate limit requires depositing additional 3% of the transfer amount via credit card. Then, you must set up the lowest possible rate at which you’d agree to transfer. The 3% deposit is sort of a cushion that allows Transferwise to end up sending the exact amount you requested; If a portion of it or all of it has not been consumed, then you will be refunded that amount on your card. If the limit is not hit within 5 days, money will be refunded. This is not recommended for urgent payments.
Limits: TransferWise has variable limits for each currency route.
Transferwise is cheaper than almost any competitor when it comes to small or medium-sized transfers inside Europe. Its 0.5-0.6% margin with up to GBP 3 in fees represents an average saving of approximately 0.5%-1% against the average quote from other companies for small transfers.
With some destinations, it is not necessarily the cheapest even for smaller transfers, but as long as the margin is at 1% or less, it will be around what other companies are offering.
For large transfers their pricing system is definitely beatable by traditional FX institutions, such as Moneycorp. Furthermore, some destinations like Canada, Australia or New Zealand have transfer limitations that prevent sending large amounts with Transferwise (or sending it in several instalments).
To summarise, this is a very good choice for remittances and small transfers. The company specialises in European corridors.
Exchange Rates & Fees Rating
Global Reach & Service
Dedicated Dealer: No.
Offices: UK (Shoreditch, London), USA, Australia, Estonia, Ukraine, Japan, Hungary.
Ways to approach: Email, Chat or Telephone
Translations: Italian, French, Russian, German and Spanish.
Accepts clients: Listed Below.
Currencies Handled: 38.
Client reviews: Love the support team.
Transferwise has a great localised version of its website, and it’s truly refreshing to see the quality of their product, the FAQ’s they have, and of course the positive user experiences. On the other hand, we are firm believers that large transactions should be executed with the help of a dedicated dealer who can provide assistance throughout the process.
Very few people would transfer tens of thousands, or hundreds or thousands, online, without speaking to a real person. In addition, a great amount of savings can be enjoyed when you have a currency expert recommending you on when to make the trade (especially with larger sums).
Transferwise operates with a different model in mind, and it absolutely rocks at what it does, but we cannot give them a perfect score without dedicated dealers.
Transferwise is now supporting the USD / MXN Corridor
Transferwise is now accepting Canadian clients
Transferwise has a new office in Australia (Sydney)
Singapore, India, Hong Kong, Malaysia, Philippines, Pakistan, Thailand, UAE, Indonesia, Russia, South Korea, China, Sri Lanka, Bangladesh, Japan
Morocco, South Africa
Global Reach Score
Spot contracts (instant currency exchange) only.
Transferwise Debit Card:
Transferwise has just launched its multi-currency debit card that enables you to take money abroad with you, loaded with a certain currency with Transferwise’s amazing exchange rates.
For Online Sellers and Freelancers:
“Request Money” functionality – an option to send a payment request through Transferwise system that auto-generates a link enabling the person/company sending the payment to move money via Transferwise easily, similar to the Payoneer’s receive money system.
Incredible, attractive app, which receives a 4.5 / 5 rating from over 4,000 users on Google Play. The app focuses on the actual functionality of sending money, and does so well, with very few bug reports.
The app is definitely ideal for immigrants and expats who are sending money constantly. However, using hedging tools such as forward contracts, and limit orders, is really problematic if you want to use Transferwise for a large transfer (or for your business). There’s very little offered by Transferwise besides sending money using credit cards, or bank transfers.
Special Features Score
Credibility Score - 90%
Client Feedback - 95%
Fees, Exchange Rates - 97%
Global Reach, Availability, Service - 85%
Added Values - 67%
Transferwise is the new way to move money abroad. A simple on-boarding process, transparent fee structure, and sublime online platform make it the fastest growing company in this sector. With more than $116m invested into it by some of the world's most famous investors, constant media coverage and FCA authorization, your money is safe with Transferwise.
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