It is easy to find 5 star reviews for TransferWise however...
The truth is, some people also give 1 and 2 star reviews and there is a lot we can learn from their experiences (below).
For example, if keeping fees low (below) is important it is good to understand ALL the fees and costs.
But successful money transfers are not all about fees.
What you need to know: Is TransferWise right for you?
In the situations where TransferWise is not your best option, we will suggest some alternatives (and you will know why they could work better).
- Can be very inexpensive (smaller amounts)
- Transparent fees
- Easy signup
- Guaranteed rates for up to 24-48 hours
- Quick money transfers, especially card transfers
- Not the best choice for larger transfers
- Phone support limited to troubleshooting/questions
- Transactions 100% online
- What you REALLY pay
- The Negatives (and Positives) from Real Reviewers
- How it Works and When it Doesn't
- True Speed of Transfers
- Is it Safe?
- Quick Signup & How to Transfer
- Bottom Line
You could be forgiven for thinking that many companies are not 100% upfront and clear about what you end up paying. Maybe attracting new customers gets in the way of being completely transparent?
Possibly the best thing about TransferWise is that you know exactly how much your transaction will cost you before you even sign up.
This great because different amounts and different currencies alter the costs significantly.
1.1 How to Find True Cost
Simply open the TransferWise widget, (opens in a new tab) and follow these two easy steps to compare your TransferWise fees with any other service:
1. Start by calculating the fees
Note: The fees you get should be very low below £4000 GBP or about $7000 USD / €4500 EU / $9500 CAD/AUD. Above these amounts see "How it Works and When it Doesn't"
2. Add the (hidden) bank fees
Something that came up while assessing 100s of real reviews was that people HATE getting hit with unexpected fees from their bank. The reality is that banks at both ends can charge a fee which can make up a significant percentage if not the majority of the total costs. This is especially true if you are moving smaller amounts which is exactly what TransferWise is best at doing!
Fortunately companies like TransferWise can do a lot to reduce these fees. While they can't control what banks charge at either end, they can make it hard for banks to charge much (if anything at all) by having local bank accounts.
Local bank accounts means when you transfer money to TransferWise (to fund the transaction) and they transfer these funds too the recipients bank account (to complete the transfer). To see if TransferWise has you covered here is a list of countries they serve.
How does TransferWise make money?
TransferWise offers what they call the "mid-market rate", which is basically the same as the interbank rate - or the rate at which banks buy currency.
However, that is not the rate that you usually get from a bank or money transfer service. As we showed above, TransferWise makes all its transfers at the mid-market rate. From this they charge a fee on all transactions, which is a combination of a fixed fee and percentage on the rate.
Why Guaranteed Rates Matter
Getting a great rate is one thing, but many people do not realise that "Guaranteed Rates" are critical if you are holding funds in your bank account.
The reason: The bank you are sending money from will normally take 1-3 days to get your funds to TransferWise. In the meantime, the awesome exchange rate you locked-in can move significantly. To help with this, TransferWise guarantees rates for 24 or 48 hrs depending where you are in the world. This is a risk TransferWise takes. However many money transfer companies do not guarantee rates, which essentially means they can give you a worse exchange rate when they get you money.
In our real life transfers we found TransferWise actually goes beyond their guarantee even if they are loosing money.
TransferWise enjoys a 5 star rating from over 56,185 reviews on Trustpilot.
This speaks a lot about what their customers think about their services. Most reviews we came across on different sites were complimentary.
Customers appreciate the transparent fees, low exchange rates and quick transfers.
Still, there are about 3 percent people who did not have a good experience with TransferWise. It is extremely important to find out what went wrong.
Some of the common complaints reviewers had about TransferWise were:
- Delays in funds arriving
A lot of reviewers have complained of funds being delayed. In the majority of cases it appears the delay occurs because of banks on both sides, and is rarely a result of anything the company can control.
Banks at either end of the transaction generally take between 1 and 3 working days. So while TransferWise says it will take a maximum time of 48hrs (usually much quicker) it can take far longer for the whole money to go from one point to another.
- Accounts deactivated
Of concern is that some reviewers claim that their accounts were deactivated after a transfer. This occasionally occurs because suitable ID is not able to be provided. This seems mostly limited to businesses who have to prove the company is legitimate as well as the people who are authorized to manage the money.
While TransferWise makes it easier to set up your account initially to make smaller transfers according to the reviewers they seem to ask for additional verification documents after you reach a certain threshold.
Most likely for compliance reasons, TransferWise needs more information as certain threasholds are reached. In the meantime, the account can be frozen until additional documents are approved (or not - where money is returned).
This is one of the reasons why we recommend using another service if you are making a larger transaction, i.e. upwards of £4000 GBP or $ 7000 USD.
- Got better rates elsewhere
In our testing of major currencies we found them to be a standout performer for smaller amounts. That said, it is worth checking that your currency and the amount are competitive. To do this follow our steps above and compare the rate you get with the interbank rate. If the cost is 1.5% or less you can be pretty sure you will not find a better rate with another money transfer company especially if they check costs and avoid extra bank fees (above).
When you transfer funds with TransferWise, quite often your funds do not actually move abroad.
Here is a video, that gives and idea of what we will explain below.
The beauty of TransferWise is that it is a peer-to-peer (P2P) service. This means, your funds are actually exchanged with someone who wants to make the reverse transaction.
For instance, if you want to transfer £1000 GBP to an account overseas, you will deposit the amount into TransferWise account.
TransferWise pools its funds and swaps them as much as possible. In this way, funds will move from a local TransferWise account to the recipient’s account. This saves a lot of time and cost.
When it does not work
While TransferWise offers a quick and inexpensive to transfer smaller amounts internationally, there are situations when it may not work too well.
Because it is a P2P service, it may not be the best choice for making large fund transfers.
The main reason is as the transfer amounts increase TransferWise finds it harder to find pools of funds to swap with and they have to step into complete the transfer in a timely way.
This means their costs tend to become less competitive. Meanwhile competitors like OFX actually get cheaper as the amounts increase. There are also compliance
Also, if you want phone support throughout the fund transfer process, you need to look elsewhere. In order to keep their costs low, TransferWise is focused on an online experience.
There are really three steps which take time.
Step 1. Sending Bank
Step 2. TransferWise matching and exchange
Step 3. Receiving Bank
In all the whole process usually takes 3 - 6 days for major currencies.
According to TransferWise, converting your funds can take maximum of 2 days. If you are transferring a larger amount or a less popular currency, the transfer may take longer because matching currencies may take longer. In most cases, it takes much less time. Most delays can be attributed to delays at the banks’ at either end.
Of course incorrect bank details and compliance issues rarely but can slow things down.
How to Make it Faster
When you make payment to TransferWise using your card, the funds reach them sooner, so the total transfer time reduces considerably. However, the cost would be higher, because card companies charge a fee on payments which is passed on.
The first thing you need to know about a fund transfer service is whether your money is safe with them.
TransferWise has 4 million customers. This speaks a loud of their integrity and quality of services.
The company has all the licences and registrations it needs to operate its business.
In the UK, TransferWise Ltd is licensed as an Electronic Money Institution (EMI) by the Financial Conduct Authority.
TransferWise Ltd Australia is registered as a money remitter with the Financial Intelligence Unit (AUSTRAC) and is regulated by the Australian Securities and Investments Commission (ASIC).
In Canada, it is regulated by Authorité des Marchés Financiers (AMF) and has a Money Service Business (MSB) license through FINTRAC.
In the US, TransferWise Inc. is registered with the Financial Crimes Enforcement Network (FinCEN).
It is also registered in Japan, Singapore and New Zealand. You can stay assured that your money and data is as safe with them as with any other bank or financial institution.
Signing up and making your first transfer are tied together on TransferWise is very simple and straightforward with the ability to use Facebook and Google accounts to make it even easier.
6.1 Register email
You can use the get started button from the widget.
This takes you to the sign up page. You can sign up using your email address, Google account or Facebook.
They will send you an email and a text with a security code. You need to enter the security code and click on the email link to set up your fund transfer.
6.3 Fund transfer
You enter the amount you need to transfer and you will get an estimate of when the funds will arrive in the recipient’s account. They will also show you teh time they guarantee the exchange rate for which will be 24 or 48 hours.
6.4 Recipient details
You will be asked you enter bank details of the recipient.
Like any other fund transfer service, TransferWise will also ask you for some verification details. You have to provide your proof of identity and residence. You can simply click a photograph of the document on your smartphone and upload it.
Verification can take a maximum of two days. In most cases, it happens pretty much instantly.
6.6 Make transfer
You can choose the mode of transfer, such as bank transfer, card transfer or another type depending on the country where the money is coming from. You can then use the chosen mode to make payment to TransferWise.
6.7 Track your money
TransferWise will keep sending you emails to help you track progress of your fund transfer. Alternatively, you can login and check the status of your funds.
TransferWise is a simple, secure and inexpensive way to transfer funds abroad.
What sets it apart is its ease of use and transparency about what they charge and the rates they offer which you can check yourself (above). They offer mid-market rates and charges a fixed fee on transfers.
You can calculate the cost of transfer even before you make the payment. However, it may not work well in all situations, especially when you have to make large transactions or you are not too comfortable doing everything online.