TransferWise’s brilliance is its simplicity—not only are transfers easy to make and quick to arrive but costs are often the cheapest in the market. This is largely why it has attracted so many users and why, at a recent valuation of $3.5 billion, it became the most valuable FinTech startup in Europe.
It’s difficult to find negative things to say about TransferWise, but if you want to transfer larger amounts or if you like the comfort of speaking to a human when doing transfers, you may want to check out some alternatives such as Revolut or a traditional bank.
- Overall TransferWise Review
- How much do TransferWise money transfers cost?
- How to sign up to TransferWise
- TransferWise safety, customer reviews and competition
TransferWise Review: Our Thoughts
TransferWise started life as a dedicated money transfer service, specialising in sending money overseas. These days it’s one of the biggest and the best in its field, so we’re going to take a closer look at what it can do, where it comes into its own, and also at where it may not be the best option.
The company was founded in 2011 by two Estonians who thought there must be a way to save on the huge fees charged by UK banks for sending money overseas. They were right—within eight years it has become a multi-billion dollar business, and reportedly now transfers more than £4 billion on its platform every month.
Cheap and fast overseas transfers: Focused on making international transfers bank to bank, TransferWise is generally much cheaper and faster than sending an international transfer from your bank. The platform is easy to use, and everything is very transparent so there are no hidden fees or surprises. It’s possible to send and receive money in 22 currencies, and send money in a further 27 currencies.
Debit card with borderless accounts: Transferwise is not, strictly speaking, a bank, although its Borderless Account does enable you to send and receive funds in multiple currencies and have a debit card. This makes it not so different from some of the newer app-based challenger banks such as Monese, Monzo or Revolut.
As always when considering whether to use a service, it’s important to know what you’re looking to do, and then decide what options you have. Clearly, everyone’s situation is different. TransferWise is a great option for those wanting to make international transfers from the UK, US or Europe (via its Estonia office). Assuming that applies to you, then you can sign up to the service here.
In addition to its core money transfer service, you can also sign up for Transferwise’s very useful Borderless Account and card, which means you’ll be able to accept money in GBP, EUR, USD, AUD and NZD, and you can then transfer into and hold up to 40 different currencies. Think of it as having a multi-currency online bank account.
TransferWise’s Fees and Hidden Costs (hint: there aren’t any!)
Fees often less than 0.5%: the good news is that you can easily enter the currency and amount you’re sending, and you’ll see exactly how much you’ll pay in fees before you commit to a transaction. For example, if you’re sending the equivalent of £1,000 to another country in that country’s local currency, then the fee you’ll pay is generally well below 1%; in many cases it’s less than 0.5%.
Costs are fully transparent: one of the stand-out benefits of TransferWise is that it’s totally transparent about costs. At every step, you’ll always see exactly what you will pay. The only caveat is that the exact amount of fees will depend on which currency you’re sending money in, how much you’re sending, and which country you’re sending to.
No exchange rate rip-off: And the beauty is, the exchange rate applied is the mid-market exchange rate (also called the interbank rate or spot rate) that you’ll find online at Google or anywhere else. This is completely different to the banks, which charge an off-market rate to generate further profits for themselves, on top of the flat fee they charge for an international transfer.
Exchange rate is guaranteed: the other important advantage with TransferWise is that the exchange rate they indicate is guaranteed for either 24 or 48 hours, depending on the currency you choose. This means there is no risk that the rate will move against you during the transaction. So long as TransferWise receives your funds within a fixed period of time, the exchange rate is fixed, and will not change. This is quite different to many other services (including the banks), who generally don’t guarantee the rate they offer you. This means you’re at the mercy of exchange rate fluctuations until the transfer is made, which can easily move by 1% or more from day to day.
Much cheaper than the alternatives: as the figures below show, the fees charged by TransferWise are much lower than typical money transfer costs of most of the alternatives (which also include the ‘hidden’ exchange rate cost):
- Banks: 3%-7%
- PayPal: 6%-8%
- Western Union: up to 10%
It’s clear that TransferWise wins hands-down on fees. The exact fee (and the percentage it represents) will change according to the currency and the amount of the transfer, but whatever it is, it’ll almost certainly be far lower than the traditional alternatives. See below for sample fees on money transfers through TransferWise from September 2019 for some popular currency conversions:
TransferWise Transfer Fee Examples
|£1,000 transfer||£5,000 transfer|
|Fee (£)||Fee (%)||Fee (£)||Fee (%)|
|GBP to EUR (euro)||£3.95||0.4%||£11.32||0.2%|
|GBP to AUD (Australian dollar)||£3.96||0.4%||£11.32||0.2%|
|GBP to USD (United States dollar)||£4.44||0.4%||£11.82||0.2%|
|GBP to INR (Indian rupee)||£5.48||0.5%||£15.83||0.3%|
|GBP to NGN (Nigerian naira)||£5.73||0.6%||£26.82||0.5%|
|GBP to PHP||£6.96||0.7%||£16.21||0.3%|
|GBP to KES (Kenyan shilling)||£9.77||1.0%||£25.25||0.5%|
|GBP to BDT (Bangladashi taka)||£12.37||1.2%||£33.74||0.7%|
|GBP to CNY (Chinese yuan)||£12.66||1.3%||n/a||n/a|
|GBP to PKR (Pakistani rupee)||£14.34||1.4%||£41.37||0.8%|
Signing Up to TransferWise
Registering with TransferWise is very straightforward, and you can do it by clicking below.
Once you've signed up, TransferWise will send you a security code via email and text message—verify your account by clicking the email link and entering the security code. Before you make your first transfer, you’ll need to upload an ID document to confirm your identity. TransferWise says this can take 2-3 days to process, but in our experience it happened almost immediately. Then you’re ready to make your first transfer!
Making The Transfer
This is where you confirm the currency you wish to send funds in, and the amount you want to send. You will also see immediately an estimate of when the payment will arrive at its destination (which will often be the same day, depending on the time of day and the relevant time zones involved).
You will also see confirmation of the exchange rate, and whether that rate is guaranteed for 24 or 48 hours. Next you’ll need to enter the bank details of who you’re sending the payment to.
Finally, once you’ve double checked all the details, you will be given various options as to how to send the money to Transferwise. If you plan to send the funds from your UK bank account, then you’ll need to go into your online bank account (which, depending on who you bank with, you may be able to do from within TransferWise itself) and make the payment.
Tracking the Progress of Your Payment
Once you’ve sent the funds to TransferWise, you’ll be able to track the payment online. TransferWise will also send an email to you at each step to confirm when they have received your funds, and then when the funds have been sent to their ultimate destination.
Is TransferWise Safe?
It’s not ‘true’ P2P: don’t be concerned by the fact that TransferWise is a peer to peer (P2P) service. You’re not literally depending on someone in another country wanting to do the opposite transaction to you.
TransferWise itself has large amounts of all the currencies it deals in, and it is the company itself that transfers the money, regardless of whether it has a ‘matching’ transaction on the other side.
Heavily regulated: importantly, like all major financial companies, TransferWise is heavily regulated. Each country it operates in has its own regulatory requirements that TransferWise must abide by the Financial Conduct Authority in the UK (for the UK and Europe), the Securities and Investments Commission (Australia), the Customs and Excise Department (Hong Kong), and the Financial Crimes Enforcement Network (USA).
Of course, nothing is ever guaranteed, but TransferWise is heavily regulated, and that’s about as much as you can hope for with financial institutions. As such, you shouldn’t have any problems sending money when using this service.
How Does TransferWise Actually Work?
The big irony with TransferWise is that they transfer money overseas, but without actually transferring any money overseas at all!
TransferWise is essentially a peer to peer (P2P) service. What that means is that they try match people who want to transfer one currency into another, with people who want to do the opposite swap (at least, as much as they’re able to). And where that isn’t possible, then they will send the foreign currency payment from their own local bank account in the relevant country.
Transferwise International Money Transfer Example
Let’s suppose you want to send £1,000 to someone in the Philippines, in Philippine Pesos (PHP). You will send the £1,000 from your UK bank account to TransferWise in the UK. Then, once TransferWise has received your £1,000, it will instruct its office in the Philippines to make a bank transfer from its local bank account to your desired destination bank account in the Philippines.
What does this mean? Speed…
Since there are no overseas transfers involved, the only time it takes is the time it takes for your £1,000 to reach TransferWise’s UK bank account (which should happen almost immediately), and then the time it takes TransferWise in the destination country to transfer the funds from its local bank to your destination bank account.
In practice, we’ve tried this a few times and the funds have always reached the destination bank account (in our case in the Philippines) either the same day or the following day (bearing in mind that the Philippines is either 7 or 8 hours ahead of the UK, depending on the time of year).
When Might TransferWise Not Be The Best Option?
As we have seen, TransferWise is easy to sign up for, simple and transparent to use, has very low fees, and is fast. What’s not to love?
There is one situation, however, in which TransferWise may not be the best option: large transfers. These can be quite difficult, especially given TransferWise’s P2P model. It can make the transfer both slower, and also more expensive in terms of fees.
So if you’re likely to need to make larger transfers (of £4,000 or more) you might be better off using an alternative money transfer service.
Does TransferWise Have Good Reviews?
Reviews for TransferWise seem to be universally excellent. Based on 72,417 Trustpilot reviews, 86% of them give it a top-ranked “Excellent” rating.
Certainly, based on our own experience of a few transactions, we would echo that. We have been thoroughly impressed with the service, with no problems whatsoever.
Having said that, 4% of the Trustpilot ratings are “Poor” or “Bad”, and most of these seem to relate to either funds being delayed, or because TransferWise sometimes asks for additional ID verification after transaction volumes reach a certain threshold. We can understand why TransferWise might do so.
In the case of funds being delayed, this is probably most likely due to the banks at either end of the transfer, rather than a problem with TransferWise itself, but it nevertheless makes customers unhappy. As does the requirement to provide more ID verification. It’s almost certainly a regulatory requirement on the part of TransferWise, but again, even if they funds are returned, it can still make for unhappy clients, especially if their accounts are closed if they do not provide the requested verification.
How Does TransferWise Compare Against Other Options?
TransferWise vs. Revolut
Revolut has a lot of similarities with TransferWise. Revolut has greater coverage in the number of currencies you can send money in and also hold in your account. However, one potential drawback with Revolut is that it cannot receive payments in USD. Revolut also allows much higher transfer limits (up to GBP 100,000 per day), so that may be important if you’re looking to transfer large amounts. The other key difference is that Revolut services are only available through a mobile app (not a website).
Quick takeaway: If you receive payments in USD or want the option to use a website instead of an app, TransferWise might be the better option for you; if you need to transfer large amounts (larger than £4,000), then Revolut is probably the better bet.
TransferWise vs. Monese
Monese is a challenger bank offering app-based bank accounts with a wide range of bank services such as direct debits and money transfers. Money transfers are free between Monese accounts but may be charged if you're sending to someone not in the Monese network. Depending on the Monese account you have, transfers will either be free or charged at 0.5% or 2%. Monese lets you transfer up to £40,000 per day.
Quick Takeaway: If you’re looking for an account that offers banking services and larger transfers, Monese is probably the way to go. Otherwise, if you're simply after service to facilitate smaller transfers (e.g., under £4,000 each) then TransferWise might be your best bet.