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If you do, chances are you have heard of TransferWise. Founded in 2011, TransferWise is an online money transfer service that currently supports over 750 currency routes and provides users with multi-currency accounts.
TransferWise became one of the big players on the market by offering clients an easy-to-use platform, and it grew to have more than 6 million users. The company was founded by Estonians Taavet Hinrikus and Kristo Käärmann and processes $5 billion (£4 billion) of money orders every month.
But how safe and reliable is TransferWise? If you're thinking about giving this platform a go, we'll give you all the details you need to make an informed decision. Read on to discover the pros and cons of using TransferWise.
How Does TransferWise Work?
TransferWise is an innovative international money transfer provider that focuses on making money transfers quick and easy, while also charging lower fees than traditional banks.
Their low and transparent fees are one of the reasons the company has become so popular in the last decade. TransferWise has a zero markup on the exchange rate, which is the main thing that sets it apart from traditional banks that generally offer their customers an above-market rate.
As of 2020, TransferWise supports sending money to 71 countries and its focus is on revolutionizing the cross-border payments sector, mainly by bringing competitive foreign exchange fees to everyday consumers.
Every transaction is facilitated via a very well-designed native mobile app available for iOS and Android and it costs nothing to open an account and there are no monthly fees to be paid even if you use the account a lot or not at all.
TransferWise also allows users to take out $250 every month without incurring any fees, with a charge of 2% in place for ATM withdrawals after that. There are some fees you need to pay attention to when withdrawing money in a currency different than your own.
Is TransferWise safe?
TransferWise is no longer a start-up, and it currently has offices located in 12 different countries. It has also grown not just in size, but also in its range of products.
The company offers Borderless Account, one of its most popular products, which makes it easy for customers to exchange their money in different currencies with a simple tap. The Borderless Account also makes it super easy to access the money at any given moment, as it comes with a fully-fledged Prepaid Mastercard.
The number of clients and amounts of money TransferWise processes every month is proof that this is a safe and reliable company. Moreover, TransferWise is fully regulated by the Financial Conduct Authority, so your money is safe when you keep them in your Borderless Account, and when you make transfers.
Just like large banks and other financial institutions, TransferWise performs identity checks and verifies its users to protect against money laundering and fraud. The platform thus has a rigorous regulatory watchdog overseeing its operations.
Finally, TransferWise provides users with two-factor authentication when using the account, which adds an extra layer of security.
Advantages of TransferWise
With a super simple and transparent process of sending money across dozens of countries, TransferWise provides a selection of features that is difficult to match with other services.
- Easy access to funds at any time thanks to the very useful Borderless Account that comes with its own Mastercard
- You can spend in any currency without having to pay extortionate exchange fees
- The company has offices in UK, USA, Estonia (which is their European headquarter), Australia, Hong Kong, Belgium, Brazil, Japan, Hungary, Malaysia, Ukraine, Singapore, and the UAE, and the customer support is top-notch.
- Minimum transfer fees are also very transparent.
- The speed of transfers is another big pro for TransferWise, as you can expect your transfers to go through the same day. This depends on the currency and country of residence, but no transfer takes more than one week, which is no different than PayPal and wire transfers.
- The user-friendly interface is clear, straightforward, and highly intuitive.
- You can track your money transfers every step of the way via the desktop browser or mobile app.
Disadvantages of TransferWise
As with any other financial service, there are a couple of drawbacks that you should consider before deciding whether the service is a suitable one for you. These include:
- The signing up process is quite slow and the security checks are laborious as users have to send two documents. A mobile bill is not acceptable, which is one of the main complaints of users.
- Requires a Social Security number — U.S. users need to provide their Social Security number to send and receive money, which is not something everybody is comfortable with.
- Not ideal for sending large amounts of money — TransferWise uses a percentage system when calculating transfer fees, which means that those who send large sums of money may end up paying more than they would when using a platform that uses fixed-rate pricing model.
- There is a chance your account will be deactivated — you can only send and receive a specific amount of money before TransferWise will ask for additional ID and documents. If you can't or won't provide them, TransferWise may deactivate your account.
TransferWise offers an excellent solution for international money transfers and it has certainly filled a gap in the market. The streamlined process, low fees, and great transparency are features that are difficult to beat.
Moreover, since the company is backed by FCA security and huge investors, you know that your funds are going to be safe.
The decision to use TransferWise is dependent on your country of residence and the amount of money you are interested in transferring.
Check out the platform's pricing structure to decide whether it's a good option for your needs.