I first discovered TransferWise when I was buying my vehicle in Canada. If I took the money out at the ATM it would’ve taken days due to withdrawal limits and it would have also been so expensive with the ATM withdrawal fee and the currency conversion fee.
My other option was to send the money from my Australian account to my Canadian bank account. This would’ve also taken days and been extremely expensive. I began asking everyone what’s the cheapest way to send my money abroad? Multiple people suggested TransferWise to me. So I decided to check it out.
Features of TransferWise
Basically, the way it works is that you send money from the currency in your bank account to TransferWise’s bank account in the same currency. They will then convert it using the real exchange rate and take the money out of their foreign bank account and transfer it into the receiver’s bank account in the same currency.
Have I lost you? Let’s use an example.
If you want to send Australian dollars to euro, instead of making one international transfer through a bank and getting charged ridiculous fees, you will send your Aussie dollars to the Transferwise Australian account with a specific reference number. TransferWise will then send your money out of their own euro account to the euro account you wanted to initially pay.
This results in the money never actually being transferred internationally at all! They claim their service can save you up to 8 times what the banks charge. The only time I’ve found this not to be true is when you’re transferring to and from the same currency. I had to do this previously when I couldn’t access my internet banking, but it was such a small amount it didn’t concern me.
Banks are sneaky in the way they operate. Even if the fee doesn’t seem unreasonable, they will get you with the exchange rate! Banks will generally use an exchange rate they’ve created to benefit them, just like when you order foreign currency, or exchange currency at airports... two things you should avoid unless you like flushing your money down the toilet!
TransferWise keeps the transaction fees and exchange rate transparent. You can see both of these upfront before you make the transfer. You won’t be charged any sneaky hidden costs.
Pros of TransferWise
- Send money up to 8 times less in fees than you would at your bank
- Fees are always transparent and are shown before you transfer money
- They use the real exchange rate
- International payments on common routes generally take 24 hours or less
- Payments within the same currency can be delivered within the hour
- Transferwise is regulated by the Financial Conduct Authority
- Over 3 million people trust the service
- Can be used for business and personal finance
- You can have multiple bank accounts in different currencies. This is a dream for digital nomads
- The recipient doesn’t need a TransferWise account
- You can transfer money from a laptop or your phone via the app
Cons of TransferWise
- Sometimes it can take up to 3-7 days to process an international transfer
- How the service works can be complicated to understand the first time using it
- Has an in depth set up process when you first sign up, this is to protect against fraud
- For sending money over $10,000 in one go, look to other platforms like OFX and World First as these may be more cost effective
- They’re mainly based online so can be hard to talk to a real person if you have issues
Verdict of TransferWise
As well as the obvious pro’s, what I like about the service is that TransferWise will let you know where your money is at each stage of its journey. They can keep you and the receiver up to date via email if you request it.
So when I used this service to buy my car, I did the exchange straight to the sellers account while she watched, and she knew the money had been taken from my account and was in progress, making us both feel secure.
I was a little confused when I first used the platform so I recommend you watch their tutorial video’s if you’re also feeling a little lost.
Once your account is set up and verified, it’s very simple to use. I recommend using Transferwise, I actually used it before writing this article!
If you want to get your first transfer free of fees, use this referral link:
Claim Your Free TransferWise Transfer *Limits may apply if this promotion is still in place
