05 Mar Send Money Abroad with Transferwise
Owing to the lack of global currency, there are many different rules and restrictions applied not allowing money to flow freely across the world. Tired of the money restrictions and hidden charges, Transferwise was born. The idea was to transfer money according to the real mid-market rates, without charging any extra money.
Sending money abroad is expensive due to unfair rates and hidden charges, especially when using banks and other traditional methods. They claim ‘free money transfers’ and ‘0% commission’, which does sound good, but it’s propaganda and fake marketing.
What is Transferwise?
In 2011, Transferwise, a London-based online money transfer service was found. It bypasses pricey international conversions by using two local transfers instead of one international transaction.
Transferwise was built around the concept of matching transfers with other users. They keep a small commission while using the inter-bank mid exchange rate, unlike traditional currency conversion where there are buying, selling rates involved.
Transferwise has a client base of 4 million, with net profits of $8 Million in 2018. Regardless of the pandemic, Transferwise reported an increase in their pre-tax profits from $12.9M (in 2019) to $26M in 2020.
The Guardian labeled Transferwise as ‘one of East-London’s hottest tech start-ups’. TransferWise was the Start-Up of the Week by the Wired UK and was also listed at number 12 in Startups.co.uk’s list of the Top 100 UK Start-Ups of 2012. In August 2015, the company was named a World Economic Forum Tech Pioneer.
How does Transferwise work?
Transferwise connects conversion routes allowing customers to transfer money up to eight times more economically than with a bank. The system is wonderfully simple. It bypasses pricey international money conversions entirely by using two local transfers instead of one international transaction. The buying and selling rates are not affect as there is no third-party involved.
For example, if you want to convert your PKR to USD, you send the money in PKR to TransferWise’s UK-based account. The equivalent amount in USD is then sent from TransferWise’s USD account to the recipient.
This means that the money never actually travels across borders as the currency gets converted using the real exchange rates. Through this system, customers avoid traditional banking fees and they don’t face a transactional loss because of unfair rates.
By transferring money in real mid-market rates, customers avoid losing money to banks. If you are to send money abroad using a traditional bank route, they charge you a markup to the real rate and charge clients extra.
Is Transferwise safe?
Financial Conduct Authority regulates Transferwise, allowing their users protection against fraud and money laundering.
What are the benefits of using Transferwise?
- Eight times more reasonable than traditional banks.
- Transparent about the charges.
- International payments from the UK and Europe are delivered within 24 hours max – 25 percent of all transfers from the UK to Europe are delivered within a second.
- Convenient as it is online.
- Financial Conduct Authority regulates TransferWise, just like any UK bank.
- Trusted by over 4 million people around the world.
- Transactions go directly to the recipient’s account.
- Suitable for both business and personal use.
- Also, offers a multi-currency account with 40 different currencies
PayPal vs Transferwise
There are clear differences in the features between the two money transfer platforms. With the different strengths and weaknesses, it is not right to say that one is better than the other, but we can say what they are best at:
PayPal works with email addresses whereas Transferwise asks for bank details. Transferwise saves money on foreign transfers whereas PayPal is mostly integrated for online stores. Transferwise is ideal for foreign transfers and PayPal is ideal for same-country transfers where currency conversion is not needed.
So, How Does One Send Money Abroad using Transferwise?
- First of all, you need to sign up using an email address, Google account, or Facebook.
- Go to the website then and select Send Money or just click on Send on the app, to set up a transfer.
- Type in how much you’d like to transfer. If it is important that your recipient gets an exact amount, enter that number into the Recipient Gets box. They’ll automatically tell you how much you need to send, keeping in mind the small commission.
- Next, mention if the transaction is personal or business-related.
- Fill in the details, like addresses, etc. Finance regulations make these compulsory.
- If you have the recipient’s bank details, enter those in and the money will get added to that account. Or, just add their email address.
- If they’re on TransferWise, we’ll find the account they want to receive money into.
- If they’re not on TransferWise, we’ll send them an email asking for their bank details.
- Review the details after filling them in. To avoid any issues and errors.
- Choose the transfer type and how you’d pay, from the available options. It’s often cheaper to transfer from the bank.
- That is it! You’ll get a confirmation email or a message on the app. And, they let you know when the money will be sent and received by the recipient.
Is Transferwise the right choice for a business?
If your business involves transferring money overseas frequently, TransferWise can help save money by giving you access to the real rate of conversion, and charging only a small fee for the transfer. TransferWise’s multi-currency borderless account helps businesses by holding more than 40 currencies, to send and receive payments all over the world.
Businesses also have the option of using the batch payments tool, which allows you to make around 1,000 transactions with one CSV file upload. That’s a great feature if you regularly make payments abroad.
TransferWise not only saves you money on international payments but it also is a more efficient and professional service, compared to others.
Forbes as well as The Telegraph, among many others, reviewed Transferwise. You can find nearly 78,000 customer reviews on TrustPilot, with an average rating of 4.6 out of 5. So, overall, Transferwise is a good investment and service to make. One should sign up for it and save themselves money when making transactions abroad, or locally. Transferwise works with 750 different conversion routes and in 12 different countries, so it definitely caters to a lot as well.
Have you ever transferred money abroad? What method did you use? How smoothly did the process go?
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