Pros and Cons
- No Dedicated Dealer Guidance
- No Discounts For High Volumes
- No FX Options Offered
- Does Not Handle Cheques
Is TransferWise Reliable?
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
|Series A …||$6,000,000||
SV Angel (VC), Valar Ventures (VC), Peter Thiel
|Series B …||$25,000,000||
Valar Ventures (VC), Peter Thiel, Richard Branson, Index Ventures (VC), IA Ventures (VC)
|Series C …||$58,000,000||
Anderson Horowitz (VC), Index Ventures (VC), IA Ventures (VC), Seedcamp (VC), Valar Ventures (VC)
|Series D …||$26,000,000||
Anderson Horowitz (VC), Valar Ventures (VC), Baillie Gifford (PLC Company)
|Series E …||$280,000,000||
Andreessen Horowitz and Mitsui & Co.
|Total to date …||$396,368,400||
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, Mitsui & Co.
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 typically doesn’t mind as long as they receive better rates than they would with other providers.
There are other companies using Peer-to-Peer technology, most notably Currencyfair. You can view the following Transferwise VS Currencyfair comparison to learn more about the difference between these companies.
In reality aside from the major currencies which will we see currency flows moving both ways TransferWise is likely to be purchasing most of the currency itself but we love this basic principle to TransferWise and the fact they still drive to reduce customer fees even when they’re purchasing the currency themselves. It shows that other traditional brokers could be doing the same too.
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 as 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 at in such a rapid pace. As a Branson-backed company, it appreciates any form of attention – positive or negative, and it works out perfectly.
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.
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 is now available in more than 71 countries and is on track to move £36bn this year alone, with 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.
More recently you may have spotted TransferWise has opened an office in Belgium. The firm took the pro-active decision to gain a European license in Belgium so even in the event of a no-deal Brexit, where UK financial services firms lose their ‘EU passporting’ rights, they can continue to offer the same great service they do today.
Do Clients Like TransferWise? TransferWise Reviews from Across The Web
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.
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 local regulator for the required jurisdiction (such as 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 complaining about this have simply failed to read the information that is readily available.
Transferwise’s Exchange Rate & Fees - New for March 2019
Meaning that overall, TransferWise won’t make any more or less on fees than it did before. The cost is just spread around differently. And most importantly prices are based purely on the costs incurred in that country rather than subsidising certain routes with income made from other currencies.
So any cost savings TransferWise can make in Australia for example can be passed onto savings for consumers purchasing AUD. Transferring money from around the world incurs variable fees with TransferWise but they are as low as under 1 Euro for most destinations from Europe, and less than $2 for anywhere from USA. Just be sure to fully understand the pricing structure for your currency corridor, particularly if you are trading any exotics.
The pricing is so carefully modelled that not only is the size and speed of payment considered, TransferWise also alter their payment fee depending on where your destination of payment is. So any cheaper payout method the firm can employ, TransferWise can then pass this saving onto the consumer too.
Exchange Rates: Here is the complete fee structure for payments converted to GBP and sent to the UK (note payment fees and spreads can vary very slightly depending on where money is being sent so be sure to use TransferWise’s online calculator first):
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. Transferwise is a good option for sending money to some traditionally difficult markets for remittance, such as India and Brazil where brokers will traditionally charge you a much higher fee.
In some countries, like Brazil however, it seems that Transferwise isn’t particularly competitive to send money from. These are currencies that are usually more expensive to transfer money from (“exotic”) and at 2.5% the offering is pretty much in line with the market.
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.
Also, newcomer< a href="http://moneytransfercomparison.com.com/lebara-money-transfers/"> Lebara Money Transfer has been beating Transferwise on the GBPEUR route for remittances – have a look at our review of Lebara Money Transfer. Transferwise First Trade Free 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 to the Exchange Rate LockTransferwise does offer a guaranteed rate for all of its transfers and will guarantee a clients rate for 24 hours for every currency except: AUD, BGN, BRL, CAD, CHF, EUR, HKD, HRK, JPY, RON, and SGD, where the rate is guaranteed for 48 hours. And as long as TransferWise receives your money within that period, you’ll get the guaranteed rate.
Sometimes, however, it’s important for the recipient of a transfer to know exactly how much money they will receive even if you pay after the expiry of the guaranteed rate.
In order to secure the rate you see you’ll have to ensure the amount lock icon is displayed on TransferWise’s online platform and pay a 3% deposit of the total value of the transfer. 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 (and Transferwise is not even benefiting in this situation either) you could l possibly pay up to 3% of the transfer, 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.
On the flipside, if the rate improves during this time, TransferWise will refund the 3% deposit and possibly even more depending on how much the rate has changed.
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.
Global Reach & Service
Ways to approach: Email, Chat or Telephone
Translations: Italian, French, Russian, German and Spanish.
Accepts Clients: Listed Below.
Currencies Handled: 49 – 21 you can both BUY and SELL + an additional 28 currencies BUY ONLY (i.e. send money to)
Client Reviews: Love the support team.
That creates a situation in which Transferwise is a great solution for people who want to conduct smaller transfers and is a valid solution for those who need to move large amounts abroad – but not every person who want to move big volumes is happy to do the entire transaction online.
New on Transferwise:
- Transferwise is now supporting the USD / MXN Corridor
- Transferwise is now accepting Canadian clients
- Transferwise has a new office in Australia (Sydney)
- Transferwise has a new office in Brussels (Belgium)
- Transferwise has a new pricing model
|Europe||Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lichtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and the UK|
|America||All US states except Hawaii and Nevada, Brazil, Canada|
|Australia and Oceania||Australia, New Zealand|
|Asia||Hong Kong, Japan, Malaysia, Singapore, UAE|
|Africa||Morocco, South Africa|
There’s very little offered by Transferwise besides sending money using credit cards, or bank transfers.