TransferWise Review (2019)
Tears of joy or just tears?
HOWEVER, many people don't realise that choosing a money transfer service is not just about cost. We want to show you what else you really should consider.
So what's the bottom line?
TransferWise could well be the best money transfer company in the world, but we think it is not for everyone in every situation (and we will show you when it is not).
For smaller amounts, we found they can easily save you hundreds of dollars.
Amounts less than £4000 GBP or $9500 CAD/AUD or $7000 USD are considered small amounts in the money transfer world.
For larger amounts, TransferWise becomes less competitive and there are also 2 other important things you should consider which were revealed when we analysed 54,181 reviews.
You will find your answers in this independent and unbiased review.
- Very inexpensive in some situations
- Guaranteed rates for up to 96 hours
- Fast (potentially)
- Transparent costs
- Easy and quick setup
- Not the best choice always
- Compliance requirements
Transferwise offers a smart, quick (online) and inexpensive way to transfer funds overseas. From their humble beginnings in 2010, they have come a long way to become a billion dollar company.
In our review, you will see why it is a great choice for people looking to transfer smaller amounts, i.e. less than £4000 GBP/$9500 CAD/AUD/$7000 USD.
More importantly, you will see if it is right for you.
For larger amounts, we found it may be better to go with companies where their costs become often more competitive and there are additional advantages. Also, if you prefer to talk to someone than do everything online, Transferwise may not be your best bet.
6 Things you need to know about TransferWise
- 1. Costs and Fees
- 2. What to Expect
- 3. What 54,181 Reviewers REALLY Say
- 4. Secret Sauce - How TransferWise Works (& When it Doesn't)
- 5. Speed and how to make it faster
- 6. Security
First a bit of slightly educational fun.
Let's dive straight into the really fun stuff. Seeing what you are going to save and making sure there are no surpises!
One thing we love about Transferwise is that the costs are incredibly transparent and you exactly know how much you will pay even before you make the actual transfer or even sign up!
1.1 Transfer Fees
The actual costs depend on a variety of factors incuding the (A) currency to be transferred, (B) where it is to be transferred and (C) the amount.
However, you can easily find out how much you will pay for the transfer using the simple widget (from link above or click image).
To see your costs, you just need to enter the amount you need to send and the currencies.
The widget will calculate the total cost of transfer for you, which in this case is 4.29 GBP.
It also gives you a guaranteed exchange rate (24 hours) and the estimated delivery time.
You can also choose the transfer type. The above mentioned quote is for bank transfer. If you need a fast transfer, you can make a transfer using your debit or credit card, but you will have to pay a higher fee. There is another option of an advanced transfer if you are sending from your GBP account outside of the UK. In this case, the fee remains the same.
However, it must be pointed out that this may not be the end of the story when it comes to fees.
1.2 Getting the Best Rates
You can also use the widget to compare costs across services.
The trouble with this is that most of these are banks which are notoriously expensive.
To be fair, we think you need to compare with other similar services. To do this, you will generally have to sign up with the other service in order to get the amount that will arrive and compare this number.
Most money transfer companies show the interbank rate and not the rate you actually get.
If you want to squeeze every last cent out of the transaction, it is best to check for yourself with your currencies and amount.
Most likely best competitor is CurrencyFair.
After camparing these ourselves we can tell you that for amounts less than £4000 GBP/$9500 CAD/AUD/$7000 USD TransferWise is going to be hard to beat for money transfers.
For larger amounts, in our comparisons OFX (review) becomes cheaper as the amounts increase and they also have other possible advantages.
1.3 Understanding Rates
TranferWise offers the mid-market rate or interbank rate, which in layman terms, means the rate you see on Google, XE or any other source. Actually, it is the rate at which banks buy from each other.
Most banks and services charge a margin on this rate plus a fixed fee.
However, TransferWise charges you an upfront transfer fee and not a margin on the exchange rate. At the very onset, you know how much fee will be deducted and the amount that will be transferred and at what rate.
Just as importantly, when choosing a service, a very important factor that you need to consider is whether or not the rate they offer is guaranteed, and if it is, then for what time duration. Rates may change quickly and considerably, and the quoted rate and the rate at which the transfer occurs may be different.
This means, if your money reaches them within the specified time period, you will get the rate you have been quoted. Again, you will know from the very beginning the guaranteed rate and the time period for guarantee.
There are fees that nobody seems to be talking about very much and can apply to any money transfer service including TransferWise.
These fees are the fees charged by banks at either end and can very wildly.
For smaller amounts these fees can be greater than the fees taken by the money transfer services!
Fortunately they can also be zero.
The way services like TransferWise make these hidden fees as cheap (and often zero) as possible is by having a network of local bank accounts worldwide. This enables them to receive and send money without attracting $15 or $30 international transfer fees.
Although we do not know all the bank accounts TransferWise has worldwide, in our experience with many of the major currencies like USD, GBP, EUR, AUD, CAD they are likely to have bank accounts. For smaller countries/currencies you could ask them.
For larger amounts this becomes less of an issue because in percentage terms it will become insignificant.
TransferWise keeps the sign up process simple so you can get transacting pretty much immediately. After you have set up your first transfer you will be then taken through the final process of verifying your account which in our experience was hassle free.
2.1 Choose a Method
Signing up is pretty simple with two options to make it easy.
2.2 Verify Email and Mobile
TransferWise then sends a text with an email and security code to verify your identity. After you click the email link and enter security code, you will be ready to login make your first transaction.
2.3 Set up Transfer
Once the basics of the account are setup, you can get straight into making a transaction.
Simply enter the amount you wish you transfer. At this stage, TransferWise will offer a guaranteed rate for up to 24-48 hours, and will provide an estimate of the time the transfer will take.
2.4 Bank Details of Receiver
The next step is to enter the bank details of the recipient.
2.5 Proof of Identity
With all your transfer details complete, TransferWise will ask you to upload your proof of identity such as your driver’s license. You can simply click a photo of the ID on your phone and upload it.
2.6 Make Payment
You will be now ready to make the payment. TransferWise will offer you various options to pay them depending on the country where you are sending money from.
2.7 Track Progress
Once you have made the payment, TransferWise will keep you updated on the progress of the transaction. It will send you a mail at each step of the transaction and you will exactly know where your funds are at any given time.
TransferWise enjoys amazing reviews on most sites and our experience has been positive but we wanted to take things a step further! There are of course many sites where you can get reviews like Tripadvisor and Monito but the one who has the most is Trustpilot.
On Trustpilot, it has a rating of 9.2 from 54,181 reviews. It is needless to say that majority of reviews are complimentary with most reviewers appreciating the low cost transfers, straightforward setup and transactions, and great speed.
People really seem to like the fact that they save on the high bank fees. While most reviews are encouraging, there are customers who have had less than desirable experiences. It is important to check out what people do not like about the service so as to make better decisions. So, here are the problems some reviewers have faced with the service.
2 things reviewers didn’t like
3.1 Transfer delays: A small percentage of reviewers have had to wait longer than expected to get funds into their accounts. Some were even convinced the money was lost. This is understandably cause for concern, so we had to dig a bit deeper.
There a few reasons why funds appear to be delayed or lost.
While TransferWise gives you a time estimate for the transfer even before you make the payment, this time promise is subject to receiving funds in their account. What many people don't realise is that banks can take days especially if weekends or public holidays are involved.
Additionally the transaction time also relies also on the bank the other end who may hold on to funds longer than expected.
This becomes a bigger problem if the bank at the other end cannot match the recepient's other details.
Although the chances of there being a problem are low, many issues can be cleared up simply through understanding how the process works and giving the correct bank details and recipient name.
3.2 Account deactivation: There have been complaints by some users that there accounts have been deactivated and they could no longer use the service with money frozen while things get sorted out.
For the most part this is likely due to compliance and regulatory issues.
From all accounts, it would appear TransferWise requests additional documentary compliance when transactions reach certain thresholds. (Interesting to note, most people transferring smaller amounts will actually benefit from this due to the streamlined sign up process)
For some of the reviews it would appear some legitimate people who get caught up in this process due to recent changes in address or details that makes it hard for TransferWise to reconcile.
Speed of transfer is usually just a misunderstanding of how things work.
Account deactivation is related to compliance and the way TransferWise seems to be structured towards making smaller transactions easily.
App issues are likely to be something that will be improved with time but in the meantime - they have an App!
Tranferwise is a P2P service, which means your money often does not actually cross borders and move from one bank account to another. The currency is actually exchanged with someone who is looking to make a reverse transaction.
For example, John works in Sydney and wants to send money back home to the UK. He will deposit AUD into the TransferWise AUD pool. TransferWise will match this transaction with other reverse transactions, i.e. users looking to transfer money in the reverse direction. So, money will only move from local TransferWise accounts to user accounts and not from user to user accounts. This saves time and cost which they pass mostly on to their customers.
When it does not work
This system works wonderfully in most cases. However, it may not be the best option is some cases.
When you are looking to make bigger transactions it may not work as well. The system works on swapping currency with peers, so it may not remain as efficient and cost effective when the amount is large.
In order to keep the costs low, most of the TransferWise operations are online and phone based support is limited to troubleshooting only. If you are someone who prefers to speak to someone personally for constant support, you will need to look elsewhere.
Many people have concerns about using P2P providers. They think they are dealing with another person and what if the person fails to fulfil their obligation. However, the reality is that you are not dealing with a person but the company itself. They will match the transaction and make sure you get the money in time.
When it comes to fund transfer services, security and reliability is of utmost importance.
Although it does not make them perfect, TransferWise is registered with various regulatory agencies across many countries. This does add layers of protection including bank accounts for the operation that are independent of their business. This means that if they ran into financial difficulties your money should still be fine.
In the USA, TransferWise is registered with the Financial Crimes Enforcement Network (FinCEN). It is licensed as a money transmitter in pretty much every state (list) except Nevada and supervised by regulatory authorities in each of those states.
TransferWise is registered as an Electronic Money Institution (EMI) with the UK Financial Conduct Authority.
In Australia, it is registered with the Financial Intelligence Unit (AUSTRAC) as a money remitter and regulated by the Australian Securities and Investments Commission (ASIC).
TransferWise Canada Inc. is licensed as a Money Service Business (MSB) and regulated in Canada by FINTRAC.
It is also regulated in Japan, Singapore, Hong Kong and New Zealand.
TransferWise offers one of the fastest ways to transfer funds across countries especially if you use a debt or credit card to fund the transaction.
Generally the speed of moving your money from point A to point B has more to do with the time it takes the banks at point A and point B to do their thing then anything else.
"Converting your money can take a maximum of two working days, but it's very rare that it takes this long."
By using a credit card or debit card you speed up the process by getting the money to TransferWise quicker than you would by a wire or bank transfer. However this does come at an additional cost which TransferWise gets charged by the banks.
So, speed comes at a cost.
Regardless of how you fund the transaction, the actual speed depends on a variety of factors including the countries, how quickly you pay them, and if all the necessary compliance aspects have been met.
Typically in our experience if you choose not to use a credit of debit card it takes 3 to 6 working days end to end (for common countries).
TransferWise is a popular service for transferring funds abroad. They charge an upfront fee on all transactions and offer mid-market rate. Along with their widget you know exactly how much money you are paying for the transfer and what amount you will receive. All this is backed up by great online and telephone support.
That said, it is not perfect and there may be better options for larger fund transfers or for those who prefer speaking to someone at every step.
Please Note: We are an affiliate for TransferWise and may earn a small commission if you click on one of the links that leads to their website. This is at no extra cost to you. While many of their competitors pay much more, we have chosen to do this review because we strongly believe they are a great service for many people. Ultimately we hope you can make a better decision on who to transfer money with.