Let’s face it: sending money across borders and especially in different currencies is a pain. Banks charge high fees and there’s often a lot of hassle involved. Working online, with clients all over the world, and traveling as much as I do, I deal with different currencies every day. I used to do everything via PayPal, but my stomach turned a little each time I saw the fees I was paying. Yikes!
So when I discovered TransferWise, and especially its Borderless Account, I didn’t think twice about trying it out.
Please note that this is an independent TransferWise review. I have no affiliation with the company whatsoever and they didn’t ask me to write about them. I want to share this service with you as it’s saved me a lot of hassle – and money – over the last few months.
What is TransferWise?
TransferWise was born out of the frustrations of two Estonian friends who were working internationally. Taavet Hinrikus used to work for Skype in Estonia and so he was paid in euros, but he lived in London. Kristo Käärmann worked in London but had a mortgage to pay in euros back in Estonia.
Each month, they would check Reuters for the mid-market exchange rate and then Kristo put pounds into Taavet’s UK bank account and Taavet sent euros to Kristo’s account. This way, they both avoided currency conversion bank charges.
They figured other people would want to do something like this as well, and TransferWise was born. The business gained a lot of interest and is currently still backed by both individuals and large investment companies. TransferWise investors include Virgin, Seedcamp, IA Ventures and others.
How does TransferWise work?
How TransferWise works, is that the company has local bank accounts in various countries through which transfers are made, meaning money never actually crosses borders. Sounds complicated? Here’s an example.
If I want to send euros to a pounds account, what TransferWise does is take my euros into its euro account and then send pounds from its pound account. So instead of making me do one expensive international transfer, TransferWise makes two local transfers – euros to euros and pounds to pounds – at a much lower cost than what I’d pay for that one international transfer.
TransferWise will always use the mid-market exchange rate, while traditional banks are allowed to set their own exchange rates to make more money on the conversion transaction, often adding up to 5% or more in hidden costs.
For example, let’s say you have $1000 USD that you want to transfer and exchange to EUR. TransferWise will charge a total of $9.90 and will use the TransferWise exchange rate or the mid-market exchange rate of 1 USD = 0.80 EUR (at the time of writing), leaving the recipient with 794.56 EUR. The average bank will charge approximately $82.68 in fees and will give an exchange rate of 1 USD = 0.77 EUR, leaving the recipient with 736.15 EUR.
If you hadn’t used a TransferWise money transfer for this transaction, you would have lost $72.78 USD.
TransferWise currently allows users to receive and send money from over 40 countries and in 28 currencies around the world, with more currencies planned to be added in the near future. You can find a complete list of the TransferWise supported countries here.
Initiating a transfer from the TransferWise website is pretty straightforward. First, you need to create a TransferWise account by simply signing up with your name and email address. Then, TransferWise will also ask you for an address and contact details such as a phone number. Next, TransferWise will need to verify your identity. For this, you’ll have to upload proof of ID (passport, national ID card, driver’s license, etc) and proof of address (mail sent to you from a credible source, like a bill).
Once all of this is done and you have your TransferWise login – which is your email address plus the password you choose – you can get busy.
How to use TransferWise for a transfer into another currency:
- Go to “Transfers” in the left sidebar and click the green “send money” button in the upper left corner.
- Select the amount you want to send and the currency you want to send that in, as well as the currency you want the recipient to receive the money in.
- TransferWise automatically lists which fees are being charged, the exact exchange rate that is used and the final amount the recipient will get after the fees are subtracted. It also tells you how much money you could be saving using TransferWise vs a traditional bank and how fast the recipient should receive the money you’re sending them.
Get your first transfer for free when signing up through my link.
- Next, you select a recipient. To transfer money to someone using TransferWise, you’ll need their name, the currency of their account and their TransferWise account number or the details of their bank account. Once you enter a recipient’s information, it will be saved for future transfers.
- You’ll be able to review your transfer before confirming it.
- When you confirm, the transfer is initiated.
Once the money has been sent, you will be notified by TransferWise at three different stages of the process:
- when the transfer order has been completed
- when your payment to TransferWise has been done
- when the recipient received the money in their TransferWise account
The entire process typically takes 1-3 business days but varies based on how you pay for the transfer and the country you are transferring to.
I’ve personally used this service to pay freelancers I’ve worked with abroad but I mostly use TransferWise to receive money in different currencies via my Borderless Account.
What is a Borderless Account?
Via TransferWise, you can have a local bank account in Europe, the UK, the US and Australia. This is huge. For me, it means clients can pay me directly in pounds, USD or Australian dollars and I won’t lose any money during the transaction.
Yes, you can also receive foreign currencies via PayPal, but you either have to calculate the fees into your price or just live with them.
When you open a Borderless Account, it automatically opens in your “home” currency. You can then add the other three currencies I mentioned above. Routing and account numbers are created for each of these currencies, just as if you’d be opening accounts with local banks.
When you receive money in a foreign currency into your Borderless Account, you can either leave it there to later make a payment from your Borderless Account into that same currency, transfer it to any of the currently 28 currencies supported by TransferWise or you can transfer the money to your home currency at the TransferWise mid-market rate.
The beauty is that because of the way TransferWise is set up, you don’t pay a fee when you’re receiving foreign currency. That’s different than when you receive a foreign currency into your regular bank account – or at least, for me, that’s the case. When I get transferred a foreign currency into my regular bank account, I pay a minimum of €8 + a percentage of the total amount I’ve received.
There are no setup fees for creating local accounts via your Borderless Account, no monthly fees, and no fees to receive money.
How do you add money to your TransferWise account?
Because TransferWise operates solely online, you cannot use cash or checks to top-up your TransferWise account. The options you have, depend on the currency you are transferring from, but can include:
1. Direct Bank Transfer
Most currencies accept a direct bank transfer, which is paid directly from your online regular bank account. Verifications and micro transfers will allow you to set up a connection between your bank account and TransferWise. Money is sent within 1-3 business days from your bank account to TransferWise. No additional fees are charged with this method, but a TransferWise daily limit does exist (i.e. $10,000 for USD transfers).
This option is the least expensive and most popular option.
Good to know:
- the bank account you’ll be transferring from needs to be under the same name as your TransferWise account. If you want to send money from a joint account, TransferWise offers an option at the end of your transfer to alert them of the full name of the joint account holder.
- If you want to send money from a business bank account, you’ll first need to create a personal TransferWise account before you can add a TransferWise business account.
2. Debit or Credit Card
Many currencies also accept payment from a credit or debit card (Visa or Mastercard). This is the fastest transfer method as the money is received almost instantly, but it accrues additional fees from the card companies. It also has the smallest daily transfer limit of all the payment options (i.e. $1,000 for USD transfers).
3. Wire Transfer
Wire transfers into your TransferWise account take a little more leg-work and banks typically charge fees for sending a wire transfer, but this payment method is ideal when sending large sums of money, as the transfer is fast (within a few hours) and the daily limit is high (i.e. $1,000,000 per transfer for USD).
4. SOFORT Banking Transfer
Paying via a SOFORT bank account is also available in select European countries and is applicable to users who have EUR TransferWise accounts. Users can expect transfers using these accounts to take 1-2 business days and the daily limit for sending money via a SOFORT account is 25,000 EUR.
5. Apple and Android Pay
Apple Pay and Android Pay are available when using the mobile platform and work in the same way Apple Pay and Android Pay typically work, making it a convenient option for users who already have familiarity with these types of payments. One thing to keep in mind is that if it’s a credit card connected to your Apple Pay or Android Pay account, the normal card fees will be applied.
At this point, it’s not possible to transfer from PayPal to TransferWise or from TransferWise to PayPal.
Also good to know: currencies transferred via TransferWise can only go to local accounts for those currencies. For example, pounds need to be sent to UK accounts and cannot be sent to someone who has a euro account in which they might also be able to receive pounds. Euros can be sent to all euro accounts in SEPA countries.
How to do a transfer using your regular online bank account
1. Initiate your transfer on TransferWise like normal, by clicking the “send money button” and then entering the amount to send, the currency to change to and the recipient of the transfer.
2. In the final transfer initiation step, select “bank transfer” as your payment method. TransferWise will send you a TransferWise bank account number (this will be the account for the TransferWise branch in the country you send money from) and a reference number.
Note: Record these numbers, as the remainder of the steps will need to be performed directly from your personal bank account, not from TransferWise.
3. Set up a bank transfer directly from your bank, using the bank account number and reference number provided by TransferWise. This can be done online, in person or over the phone.
4. Once the transfer is initiated and money has been sent, TransferWise will send a confirmation when the funds have been received.
Wihtdrawing money from your TransferWise account?
If you want to withdraw money in the same currency from your TransferWise account into your regular bank account, you’ll only pay a small fixed fee. If you want to transfer a different currency, you should first exchange that currency at the mid-market rate TransferWise offers into the currency of your regular bank account before transferring.
Limits per country and currency
The TransferWise limit for the amount of money you can transfer per day and per year, depends on which country you’re transferring from. On the website, the TransferWise transfer limit for every country and currency is listed on an individual FAQ page.
Limits per type of payment method
There are also limits for each of the methods you can use to send money into TransferWise – direct bank transfer, credit/debit card, wire transfer, SOFORT banking transfer and Apple/Android Pay.
Joining TransferWise is completely free. There are no setup fees and no subscription fees. It’s also free to receive money, regardless of where that money comes from and which currency it’s send in.
The only things you pay for, are
- sending money to an account that’s in a different currency than yours.
- paying with a debit or credit card.
When you’re sending money to someone that needs to receive the money in a different currency, you pay two kinds of TransferWise fees:
- Conversion Fee – a percentage of the total transfer which varies based on the currency you convert from and to. For example, the fee is 0.35% to go from GBP to EUR and is 0.5% to go from EUR to GBP.
- Fixed fee – a small, fixed fee to cover the cost of the transaction which varies based on the currency you are sending out. For example, if you have GBP to be exchanged, the fee is 50p and if you have Euro to exchange, the fee is 0.60€.
Both of these fees are clearly shown to you before you finalize your transfer.
When you use a personal or business credit or debit card for your transfer, an additional fee equal to a percentage of the total transfer is applied. The percentage charged is based on the currency you convert from, and often the credit fee is higher than the debit fee, with some currencies even offering debit payments at no charge.
How long does TransferWise take to process a transfer?
As mentioned before, TransferWise always indicates how long it estimates it will take for a transfer to be completed when you enter how much money you want to send where.
TransferWise transfer time depends on four things:
- the countries you’re sending money to and from
- how you pay – for example, card payments are usually instant while bank transfers can take longer
- when you pay – TransferWise only processes transfers during normal banking hours and if there’s a holiday in the country you’re sending money to, that can play a part as well
- whether or not your ID needs to be checked again
Can I Get a TransferWise Debit Card?
Currently, Transferwise debit cards for the Borderless Accounts are in the trial phase, and as of January, 2018, a small group of users have been issued cards by invitation only. These cards will be available in the UK and EEA in the near future, and Borderless Account holders from these countries will be notified once they are available to all account users.
For users outside of the EEA, it’s not yet known when a TransferWise card will be available.
There’s no TransferWise credit card.
What’s TransferWise customer support like?
I love TransferWise support. The TransferWise customer care team is super responsive and goes above and beyond to help customers. For example, I wanted to receive payments in pounds from a UK site, but to do so, I needed a BIC and an IBAN number. TransferWise normally only offers a UK sort code and account number, but when I contacted support, they somehow created a BIC and IBAN for me to use and when I couldn’t get them to work immediately, they were always quick to get back to me.
I don’t often rave about online support, but TransferWise’s has been great so far.
The team works and lives from different countries, meaning you’ll get help no matter what timezone you’re in. You can contact them via email or call. Live chat currently isn’t an option yet.
To contact support, just click the blue “help” button at the bottom right of the website. This will both let you search the extensive knowledge base and contact the team. To call, you’ll have to select the country closest to you to be given the TransferWise contact number for your timezone.
The articles in the knowledge base have all the information you need to set up and get to work with your account. And then there’s also a TransferWise blog that shares news about TransferWise but also about doing business internationally.
Handy TransferWise tools
TransferWise Rate Tracker
TransferWise has its own rate tracker that allows you to set exchange rate alerts so you can convert currencies when the price is right for you.
TransferWise Currency Converter
The currency converter lets you convert currencies at the REAL exchange rate – the mid-market rate that is independent of banks or currency exchange providers and thus without hidden fees.
SWIFT/BIC Code Finder
This tool lets you look up a SWIFT code by bank or country. It also lets you validate a SWIFT code.
You can find the Transferwise Money Transfer app both on iTunes and in Google Play. I don’t personally use the TransferWise mobile app as I prefer doing money things on my laptop, but both versions of the app have good ratings.
The app lets you transfer money via bank, credit or debit cards as well as Apple Pay and Android Pay. It also shows you the status of transfers, lets you cancel transfers and lets you upload the personal verification documents you need to set up an account.
There are many many international money transfer services out there, but I’ve really only properly tried out two TransferWise competitors: PayPal and Payoneer.
TransferWise vs PayPal
I still use PayPal for receiving payments from companies that don’t have another payment options and also to make some payments in USD. I’d prefer using TransferWise for those payments, but because some companies will only pay me via PayPal, I always have money in there and since I can’t transfer it from PayPal into TransferWise, I have to spend it via PayPal as well – or convert it and withdraw it to my regular bank account, but that costs a ton of money.
Why I prefer TransferWise over PayPal is because of the clarity of the fees (you always know up front what you’re going to pay) and because as a receiver, I never pay a fee. I know that when you use PayPay, you can ask the client/sender to cover the fee, or you can calculate the fee into your price, but I just find it easier if I don’t need to think about that.
Lastly and very importantly for me, I can receive Amazon affiliate payouts into my TransferWise account which isn’t possible with PayPal.
TransferWise vs Payoneer
Payoneer is another TransferWise alternative and this one does allow you to receive Amazon affiliate payments, but I find the interface a bit clunky and their support is horrendous – and that’s being kind. I only very briefly used Payoneer for international payments (you can link it to your regular bank account as well) but stopped as soon as I signed up for TransferWise.
Is TransferWise legit?
All of the above sounds amazing, right? But maybe you’re still wondering: “How safe is TransferWise?”. Well, this is what the website says:
Their page with country-specific licences can be found here.
I know this all just sounds very official, but I tend to follow my gut and recommendations on things like this. TransferWise came recommend to me by several people and I personally haven’t experienced any problems with it so far.
Get your first transfer free!
As a TransferWise user, I can give people who want to sign up credit for their first transfer. If you use this link to sign up, you can send your first transfer for free (up to $707/€567/£500).
What do I get? I get €60, but only if multiple people not only sign up but also use TransferWise. So if you don’t like it and decide not to use it, I get nothing.
If you frequently send and receive in different currencies, I highly recommend you to check it out, though, and if you have any questions about it, don’t hesitate to get in touch!
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I am in no way affiliated with TransferWise. This is an independent review based on my experiences using their services. As explained, if you use my TransferWise link, I earn €60 but only if multiple people don’t just sign up, but also actually use the service. I’m confident that TransferWise can save you time, money and headaches when sending and receiving money internationally and that’s why I’m recommending it.