TransferWise is an international money transfer service founded by Taavet Hinrikus and Kristo Käärmann. They developed it after their personal experiences in how difficult and costly it is for people whose livelihood requires constant conversion of cash from one currency to another. They launched the online company in 2011.
Since then, TransferWise has grown to have more than 4 million customers all over the world who send billions of dollars per month. It’s especially beneficial for freelancers and remote workers whose employers pay them through a different currency than what they use to pay their mortgage or other expenses.
Before you sign up for the service, it’s best to read this TransferWise review, so you know if it suits your needs. Additionally, here are some things that you must know before you use the platform:
5 Things You Need to Know Before Using Transferwise
1. It’s a Revolutionary System
TransferWise can afford to implement cheaper rates than those of banks and other money transfer services because of its unique arrangement. It starts with the company allocating massive stores of various currencies globally. Then, when you exchange, say, $1500 United States dollars (USD) to Australian dollars (AUD), the money does not need to be moved physically.
What they do is they add your money to their American dollar pool and pay the recipient the equivalent amount in AUD from their local cash pot.
This way, they remove the processes that make traditional transfers lengthy and cut the costly middlemen to provide a better exchange rate to its users.
2. It Has a Very User-Friendly Interface
The website of the online money transfer service makes it very easy to pay someone from another country. All you need to do is to log in on the site, choose the currency you’re using and the currency that your recipient is expecting, and type in the amount you’ll be sending.
Next, you choose how to fund the transfer, either through your bank account, credit card, or other options, such as Android Pay or Apple Pay, to complete the transaction.
3. It Supports Several Major Currencies
TransferWise supports most major currencies. The only difference for some countries is that they can only send payments to or from private individuals, not businesses, like in Brazil. Here are some of the currencies that you can send money to and receive money from:
- AUD – Australian dollar
- CAD – Canadian dollar
- CHF – Swiss franc
- DKK – Danish krone
- EUR – Euro
- GBP – Pounds sterling
- HUF – Hungarian forint
- JPY – Japanese yen
- NOK – Norwegian krone
- NZD – New Zealand dollar
- RUB – Russian ruble
- SEK – Swedish krona
- SGD – Singapore dollar
- USD – United States dollar
Meanwhile, for places such as the UAE, Chile, China, Colombia, Georgia, Indonesia, South Korea, Mexico, the Philippines, Thailand, and Vietnam, the service can only course payments for their respective currencies through local banks. If you’re from these countries, it’s likely that your local bank will charge you with a transfer fee.
4. It Uses Real Exchange Rates
Aside from lower fees caused by the elimination of unnecessary processes for international transfers, TransferWise also gives its users higher value for their money by using real exchange rates, otherwise known as the mid-market rate.
These are the numbers that you get when you convert an amount from one currency to another using Google. Often, banks add a markup to the mid-market rate and keep the difference.
5. It Does Not Have a Standard Delivery Date
While the service aims to transfer money as quickly as possible, various elements affect the length of time involved in sending the payment and receiving it. These are the four significant factors that influence your money’s delivery date:
- The cities or countries you’re sending to and from
- The payment method you chose
- The time you completed the transaction
- Security checks conducted by local banks
Most transfers to Europe that are made in the UK is completed within a business day. It would also take about one business day to transfer money into a Swiss bank account, whereas Russian bank accounts receive the payment after three working days.
The rise of online services has caused people to be vigilant about scams especially when it comes to financial matters. Concerns about the safety and security of TransferWise transactions are understandable. You can be assured that TransferWise is safe because the company is registered with the UK Financial Conduct Authority (FCA), which regulates finance firms and ensures customer protection.
Author: Sarah Morris