Transferwise (now rocking the name “Wise”) claims to be the perfect solution for expats, frequent travelers, and pretty much anyone tired of getting ripped off by banks when sending money internationally.
But does it actually deliver on this promise, or is this just another case of chest-thumping?
Well, that’s what today’s post is all about. We’ll take a microscope to Wise’s claims, scrutinizing its speed, pricing, safety, and much more to help you decide whether it should be your top choice for shuffling bucks across borders.
Let’s get on with it, shall we?
TransferWise Speed: How Fast Can You Transfer Money Internationally?
Unfortunately, there isn’t a straightforward answer to this question. Wise is working on instantaneous transfers. But as things stand, most international transfers take anywhere from a few hours to several business days.
The exact time it takes for your international transfer to reach your recipient will depend on the following factors:
- The method you use to fund your transfer.
- Whether additional verification is needed.
- The time the money takes to show up on the recipient’s account.
- The currencies involved in the transaction.
- The timing of your transfer
Here’s exactly how each of these factors can affect the speed of your cross-border transfer.
The Funding Method
This simply means the way you load money you’re looking to transfer into your Wise account. There are a couple of ways you can fund a transfer.
You can transfer money directly from your bank account to your Wise account, use your credit/debit card, or load up your Wise account using mobile payment methods like Apple Pay or Google Pay. SWIFT transfers can also be a good option, especially for large amounts.
And if PISP (Payment Initiation Service Provider) payments are supported in your region, that can be an option too. Setting up PISP payments involves giving Wise the green light to automatically transfer money from your bank account to your Wise account. They’re basically automated bank transfers.
Last but not least, you can fund an international transfer with your Borderless account. Obviously, you’ll need to have enough money in that account to begin with; otherwise, you’ll have to fund it using one of the other methods above.
Now, each of these funding methods has its strengths and weaknesses, some of which have to do with speed.
If speed is a priority, you’ll be better off funding your transfer with a debit/credit card, a pre-loaded Borderless Account, Apple Pay, or Google Pay. Wise processes payments from these sources almost instantly. PISP payments are also processed relatively quickly within the European Union but can take a few hours in other parts of the world.
Bank and SWIFT transfers are the worst for speed, with bank transfers having a slight edge (although it’ll depend on the specific bank you’re using and its location).
Verification Requirements
Wise, like any other licensed financial company, is governed by Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. These regulations require Wise to verify the identity of its customers and monitor transactions to prevent illegal activities such as money laundering and fraud.
As part of their efforts to comply with these regulations, they’ll run several checks to evaluate your transaction’s legitimacy and verify your identity as well as the recipient’s. Typically, this involves reviewing personal details and documents on both ends of the transaction and checking the purpose of the transfer.
When everything checks out, these checks take a couple of seconds.
But if something doesn’t sit right with them, Wise will request additional information from you or the recipient and run further checks to clear things up. This process can slow down your transaction by up to 14 days.
The Time It Takes the Money to Reflect in the Recipient’s Account
After funding your account and initiating a transfer, Wise will process the transfer and move the money through their network of local bank accounts.
However, the money might not instantly be reflected in the recipient’s account. It can take anywhere from a couple of minutes to a few business days, depending on the following factors:
The Destination Country’s Banking Systems
Banking infrastructure varies from one country to the next. Developed countries have more advanced, super-efficient banking systems that can process transactions quicker than their developing counterparts.
If you’re sending money to a country with advanced banking systems, chances are the money will reflect in the recipient’s account almost instantly — or within a couple of minutes tops. But if the banking systems in the recipient’s country still have some catching up to do in terms of transaction processing speed and efficiency, they might have to wait days before the money shows up in their account.
The Recipient Banks’ Transaction Processing Times
The receiving banks’ transaction processing times will also come into play. Individual banks have varying internal processes and procedures, and these determine how fast they process incoming international transfers. Some banks process transactions multiple times a day, while others might only do so once or twice.
Currency Pair
The currencies involved in the transfer can also significantly affect how quickly the transaction goes through. How? In a word, liquidity. Liquidity refers to how easily an asset can be converted into cash without affecting its market price. In the context of currencies, it means how easily one currency can be exchanged for another.
To move your money across borders, Wise needs enough funds in the recipient’s currency to actualize the transfer. This is where liquidity comes into play: the ease with which they can get those funds in that currency and at the right time depends on the liquidity of the currencies involved in the transaction.
If your transfer involves a highly liquid currency pair like USD/EUR or GBP/USD, Wise will have an easier time getting the money needed to complete it, so your transaction will be faster. The reverse is true for less popular currency pairs.
The Timing of Your Transfer
Timing matters when it comes to Wise transfers, too. And by “timing” I mean when you initiate the transaction.
You see, Wise relies on partner banks to move your money. And if you’ve ever needed to access banking services on a weekend or holiday, you know that banks take their off days seriously — sometimes more seriously than we do!
So if you initiate your transfer during weekends or before a holiday, Wise won’t be able to coordinate with its partner banks to complete the transaction. They’ll have to wait till the next business day. Translation? Your transaction will take longer to go through.
Timezones might also come into play, depending on the proximity of the destination country to yours. If you’re in different time zones, there’s a good chance your country’s banking hours don’t align with the recipient’s. This mismatch can cause further delays in processing your transfer, especially if it means waiting for the recipient’s banks to open for business.
TransferWise Pricing: How Much Does it Cost to Send Money Internationally?
Wise generally charges fees based on a percentage of the amount being transferred, plus a fixed fee that varies depending on the currencies involved. The total cost of sending money internationally is made of three types of fees:
- Variable fee
- Fixed fee
- Additional fees
Let’s take a closer look at each element of Wise’s pricing structure to give a clearer idea of what to expect when sending money across borders.
Variable Fee
Wise charges this fee to cover the cost of converting your currency to the recipient’s. It’s usually a percentage of what you’re sending and can be anywhere between 0.35% to 2% depending on:
The Currencies Involved in the Transaction
Remember when we talked about currency pairs affecting transfer speed due to liquidity? Turns out they have a similar impact on how much you’ll end up paying in variable fees.
Commonly traded currency pairs like EUR/USD, GBP/USD, and USD/JPY usually attract lower variable fees in the 0.35% to 0.55% range because they’re more liquid. Meanwhile, their less popular, less liquid counterparts come with higher variable fees, typically in the 0.75% to 2% range.
The Size of Your Transfer
Wise drops its variable fees as your transfer amount grows larger. You can actually check this out yourself using their Fees Calculator. Just stick with the default funding method and currency pair, then gradually up the transfer amount in the “you send” box. Once you hit £100,000, you’ll see those variable fees start to drop.
There are two reasons for this:
- Larger transfers naturally get lower variable fee percentages. Wise uses tiered pricing based on the size of your transfer, so the more you send, the lower your fee percentage becomes.
- Wise offers additional discounts for amounts exceeding £100,000 per month. This means that as you transfer more than £100,000 (or the equivalent in your currency) in a calendar month, you enter into a higher tier where the variable fee percentage decreases even further.
This tiered pricing model, combined with the extra discounts, makes Wise a smart choice when picking a payment method for high-value international transfers.
Fixed Fee
Wise charges this fee to cover the basic costs associated with processing your transaction. It’s a pretty straightforward charge because it doesn’t change regardless of how much you’re sending.
That being said, this fee can vary depending on the currency pair you’re dealing with because different currencies have different processing costs. It might also change based on how you fund your transfer. Here are the different funding options, ranked from the most economical to the priciest:
- Wise balance (cheapest)
- Bank transfer
- Debit card
- Credit card
- SWIFT transfer (priciest)
Additional Fees
These are probably the trickiest charges to understand because they never show up on Wise’s Fees Calculator. And no, they aren’t what’s displayed as “our fee” on that calculator — “our fee” is simply a sum of the variable and fixed fees. I needed to clear that up because it trips up a lot of people.
So, what exactly are these additional fees and why aren’t they shown on Wise’s Fees Calculator?
Nine times out of ten, they’ll arise from your bank, card issuer, or any intermediary banks involved in your transaction. Since Wise has no control over the charges from these third parties, it’s impossible to accurately estimate the additional fees. That’s precisely why additional fees are never shown on the Fees Calculator despite Wise’s undying commitment to fee transparency.
TransferWise Safety: Is Wise Safe for Large Amounts?
Tranferwise is safe for all kinds of transfers, including large amounts. Here’s why:
- It’s regulated by financial authorities in multiple countries, including the Financial Conduct Authority (FCA) in the UK and the Financial Crimes Enforcement Network (FinCEN) in the USA. This ensures they adhere to strict standards for security and customer protection.
- It has invested in advanced security measures to protect your funds and personal information. This includes two-factor authentication, encryption, and regular security audits.
- It’s one of the most transparent money transfer services out there when it comes to fees and exchange rates. While this might not be a security measure per se, this level of transparency is always a green flag, especially since many similar services aren’t that upfront with their fee structure. With Wise, you know exactly what you’ll pay in fees, and that’s important regardless of how much you’re sending.
- Wise keeps customer’s money in segregated accounts, separate from their operational funds. So even if something happened to Wise as a company, your money would still be safe.
Even though Wise has measures in place to protect your money and sensitive personal information, you still have bits to do on your end to keep your money safe. Here are some great pointers:
- Always double-check the amount and the recipient’s details because once the transfer clears Wise’s systems, there’s no way to reverse the transaction.
- Use strong, hard-to-guess passwords and enable two-factor authentication (2FA) for extra security.
- Never share sensitive information via email. Fraudsters have been known to run phishing scams by impersonating Wise support staff and asking for personal info (usually, log-in details or your account number) via email. Don’t fall for that; Wise will never ask for this kind of info via email – they usually use secure channels like their mobile app or message portal. Avoid installing suspicious software or apps, too.
- If you use Wise frequently, make a habit of regularly going through your transaction history. If you notice any suspicious activity, contact the support team; they’ll seal that security loophole and advise accordingly.
- Keep up with software/app updates. One of the main reasons Wise (and pretty much any other organization dealing with sensitive customer info) rolls out regular updates is to patch up security loopholes, so make sure you’re not leaving yourself vulnerable by missing important updates.
- Avoid using public Wi-Fi to access your account. Public Wi-Fi opens all kinds of loopholes for information breaches. Stats back that up, too: in a survey conducted by Forbes, 40% of participants reported they’ve experienced data breaches when using public Wi-Fi.
- Stay informed about common scams and best practices for online security to protect yourself effectively. With technology evolving at the fast pace it is, scammers are always devising new tactics. Staying informed is crucial to safeguarding your personal and financial information.
TransferWise Features: What Sets It Apart?
We’ve already touched on some of these, but I think it makes sense to go into greater detail. So what unique features does Wise offer and how do you stand to benefit from each when sending money internationally?
Let’s find out.
Borderless Accounts
The Borderless Account is central to Wise’s value proposition as an international money transfer service, and rightly so. It’s a game changer for people sending money internationally because it allows you to hold and manage money in over 40 currencies in one place.
Better still, this type of account comes with local bank details (e.g., UK sort code, US routing number, and so on) for all popular currencies. That means anyone with a Borderless Account can receive money like a local in those currencies. It also makes the Borderless Account one of the most efficient cross-border payment solutions for expats working abroad because it saves them money on international transfer fees and speeds up transfers (transfers from a Borderless Account are faster, remember?)
Wise’s Borderless Account provides further savings on exchange rates and currency conversion fees, too. Converting money from one currency to another within the account can be done at the real exchange rate, and the conversion fees are usually cheaper than what you’d get with traditional banks.
Multi-Currency Debit Card
Wise offers a multi-currency debit card that can be linked to the Borderless account. This card allows users to spend money in over 40 currencies at the real exchange rate, making it a valuable tool for travelers and expats.
To give you an idea of just how much better this card is for international travelers and expats, here’s a table comparing it to your run-of-the-mill debit card.
| Feature/Merit | Wise’s Multi-Currency Debit Card | Normal Debit Card |
| Multi-Currency Capability | Fully integrated with your Borderless Account, and can hold and spend in over 40 currencies from one account | Typically linked to a single currency account |
| Exchange rate | Uses the mid-market rate (real exchange rate) for currency conversions, ensuring you get the fairest rate available. Conversion fees are low and transparent. | Banks often add a markup to the exchange rate, making it less favorable. Additional foreign transaction fees may apply. |
| Fees and transparency | Known for low, transparent fees with no hidden charges. ATM withdrawals are free up to a certain limit, and spending in supported currencies incurs no extra fees. | Banks often charge foreign transaction fees, conversion fees, and sometimes additional ATM withdrawal fees when used internationally. |
| Local bank details | Provides local bank account details in multiple currencies (e.g., USD, EUR, GBP), allowing you to receive payments as if you had local bank accounts in those currencies. | Does not offer local bank details in different currencies, making it less convenient for receiving international payments. |
| ATM withdrawals | Free up to a monthly limit, small fee thereafter | Often higher fees for international withdrawals |
| Global acceptance | Accepted globally as a Mastercard, with low-cost international transactions | Also widely accepted, but often comes with higher fees for international use. |
Evidently, the multi-currency card has a leg up on conventional debit cards on pretty much all aspects of international transfers.
TranferWise Pros and Cons Summarized
Having dug through everything Wise has to offer, it’s time to summarize the good and the not-so-great so you have an easier time deciding whether this is your best option for shuffling money across borders.
Let’s start with the good:
TransferWise Pros:
- Cheaper than traditional banks with a transparent fee structure.
- Fast transfers, with most transactions going through within 24 hours.
- Secure and regulated in multiple countries.
- Has global reach.
- Flexible funding methods, allow users to pick what best aligns with their priorities.
- Offers one of the most user-friendly money transfer apps.
TransferWise Cons:
- There are limitations on how much you can send.
- Doesn’t support cash deposits.
- Additional fees can be difficult to estimate.
- If additional verification is needed, it can slow down transfers.
TranferWise FAQs
Let’s round off our discussion by addressing some of the most commonly asked questions about Wise.
Is Wise Better Than PayPal for International Money Transfers?
For most people, Wise is a better way to transfer money internationally than Paypal. It’s cheaper overall, more transparent with its pricing, and offers better exchange rates than PayPal. Wise also offers a multi-currency account, which adds flexibility and convenience to cross-border transactions.
Is Wise Better Than a Bank Transfer For International Money Transfers?
Yes. Wise typically offers lower fees, better exchange rates using the mid-market rate, and faster transaction processing times. It’s also more transparent with pricing, making it a better overall choice for cross-border money transfers than traditional banks.
Wise Vs. Western Union: What’s Better For Sending Money Internationally?
Wise is generally a better option than Western Union when it comes to international transfers. It’s cheaper overall, faster, more transparent with pricing, and offers better exchange rates than Western Union.
How Can I Speed Up International Money Transfers With Wise?
First off, ensure you’re verified ahead of time to prevent delays. Second, preload your Borderless account and use it to fund your transfer for faster processing. Lastly, time your transfer to coincide with peak bank operating hours for efficient processing.
How Can I Minimize Costs When Sending Money Internationally Via Wise?
To minimize the cost of your international money transfer, fund it through your Wise Borderless account or a bank transfer, consolidate smaller transfers into one larger transaction, initiate transfers when exchange rates are favorable, and send the funds to the recipient’s Wise account in their local currency.
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