Transferwise Review

Transferwise is one of the better known international currency exchange platforms. The company has made a name for itself by offering low fees for over-the-border money transfers. This review will discuss the benefits and drawbacks of using Transferwise.

Transferwise at a Glance

Transferwise was founded in 2010 by Taavet Hinrikus and Kristo Käärman as an alternative platform to transfer money internationally. The founders claimed the platform allows users to send money through borders without any hidden markup fees as charged by traditional banks.

Two years after its founding, Transferwise was listed as one of the top 100 startups in the UK Transferwise’s initial investors included IA Ventures, Index Ventures, and Valar Ventures, a company owned by Peter Thiel, a co-founder of PayPal. In 2014, Richard Branson’s Virgin Group invested 25 million pounds in Transferwise.

Transferwise is regulated by the Financial Conduct Authority (FCA) in the U.K. (The FCA is not part of the British government and operated independently). Transfewise distinguishes itself from other FX services by prioritizing transparency. The founders have claimed that Transferwise charges only mid-market exchange rates without additional fees.

Since its founding, Transferwise has rapidly grown to be a leading FX platform. It allows users to hold money in over 40 different currencies. Users can transfer money to over 50 countries.

How does it work?

The Pros

Here are the main benefits Transferwise offers to customers:

Mid-Market Exchange Rate

The main perk Transferwise offers customers is what they call “mid-market exchange rate.” The exchange rate differs between the market, where traders buy and sell currency and banks. The market rate tends to be lower compared to banks, which marks up a slightly larger rate to turn a profit. Some financial service providers, like PayPal, also have higher exchange rate markups to make a profit.

Transferwise promises customers a better deal by offering an exchange rate that is closer to the market rate rather than the bank rate. The idea is that customers can save money when transferring between a high value and low-value currency.

Transparent Costs

One of the biggest perks Transferwise offers customers is transparent costs. The company promises that all fees the platform charges would be clearly stated. The company does not charge additional fees bundled together with the exchange rate, according to statements. One of the biggest snags in bank transfers is having to pay more than the market rate because of such hidden fees. The whole point of Transferwise is to eliminate that.

Multiple Currency Accounts

Transferwise offers a feature called a “borderless account” where users can have bank account numbers in different countries under a single Transferwise account. You can send money to local bank accounts in foreign currencies even if you have British, Australian, or American bank accounts. This feature allows customers to hold multiple bank accounts in different currencies.

Well-Built Platform

Transferwise services are entirely digital. As customers expect, the company has an excellent app and a website to use on the go or at home. The software is highly user-friendly. The app and the web service is built with simplicity and accessibility in mind. So you can use it even if you are not particularly computer savvy.

Good Customer Service

Transferwise typically scores high on customer service ratings. The platform has a telephone customer service line, in addition to email. You can try both methods if you need help using the platform.

The Cons

As speedy and low-cost as Transferwise can get, it’s not without drawbacks. Here are some:

Reliability Issues

Some customers have complained that Transferwise registers transactions as completed when the receiving bank does not. In situations where funds bounce from the recipient bank account, Transferwise lists the transaction in the completed stage as long as the platform sends the money. Customers have had to pay fees even for funds that were rejected on the receiving end.

Not as Safe as a Bank

While Transferwise is regulated, the authority that does so is not a government agency. Therefore, transactions on the financial platform don’t come with the same safety guarantees as a bank. Transferwise can be convenient and fast, but it doesn’t offer the same security that government-regulated financial institutions do.

Extra Verification to Process Transfer Requests

Customers have noted instances where Transferwise has demanded extra verification documents from account holders to complete transfers. A transaction may get rejected without notice from Transferwise due to documentation issues.

Conclusion

Transferwise is an online FX remittance system that’s designed especially as a workaround to excessive fees charged for international money transfers. The company offers access to high-value currencies at surprisingly low costs. There are no hidden fees in the currency rate, and the platform doesn’t charge exorbitant amounts to transfer any of the supported foreign currency.

It has a large portfolio with currencies for customers located in a diverse range of countries. Transactions are fast and convenient. There are some downsides, however, especially regarding the safety and reliability of the service. Transferwise doesn’t offer the same safety guarantee as a traditional bank.

While services can be unreliable at times, you can always get in touch with its excellent customer service. Most customers would just prefer the transactions to go through, of course. Transferwise doesn’t come with major security issues, but potential new users should be aware of what these could be.

It should be noted that Transferwise itself is a well-established company. It’s somewhat regulated and is ready to address customer inquiries. The company is totally legitimate, even if there are some issues with services offered. Individual experiences, in general, can vary, so you might not encounter reliability issues that other customers experience.

Overall, Transferwise is probably one of the top non-bank foreign currency remitters out there. It’s highly convenient and offers access to account numbers in several different currencies. The platform is superbly easy to navigate. It’s well worth a shot if you want to transfer money internationally on a regular basis. When it comes to low fees, there is no other service that comes close to offering what Transferwise does.