Transferwise Review: Transfer Money Overseas For Just 1%

Imagine, if I charge a client $1000 for a website or SEO services, I lose 50 bucks each time!

With Transferwise it is about $10 instead.

Now as you business grows...imagine that x 100. I am saving thousands of dollars in fees!

LET IT RAIN!

What Is Transferwise?

Transferwise is an online service that a​llows you to easily and cheaply transfer money internationally. It can be used to request money, pay bills, charge clients or just send someone money.

They even allow the use of debit and credit cards, and have an app. So the process is very very simple.

Why Is Transferwise So Cheap?

Because it works in a revolutionary way, Transferwise keeps the transaction fees to around 1%. They avoid the massive fees that banks normally charge, and keep costs down, all to your benefit!

Instead of transferring the money between your account and the destination account, money is moved to and from their bank accounts in each country. So, no money is sent between countries which is where it normally costs more (because the banks take a piece). 

It sounds a little confusing, but basically they keep track of the money from each customer, and make sure everyone's accounts are balanced in each country. 

Pretty cool if you ask me!

If you want to see the video from Transferwise with a full explanation, you can check it out below:

Is Transferwise Safe & Secure?

I can understand you are sceptical, and so was I.

It kinda sounds like "free money! sign up here!"

First off, if you know Skype, then you know the makers of Transferwise!​ Those smart guys who revolutionized the telephone for us :>

Even ignoring their past successes, Transferwise actually just uses the standard banking system. They just don't transfer the money internationally.

They are also held accountable and registered just like your normal bank are.​

You can read more about how they keep things safe and secure​.

And to add another level of trust, here are a couple of notable people who have invested in the company:​

So, some pretty big names are behind this company and they obviously think Transferwise has a big future.

Transferwise vs Paypal - A Huge Difference

This is one of the killer reasons I switched all my clients to Transferwise. 

The amount of money you can save (or not lose actually) is huge. Especially when you add it up over the year.​

Here is what it looks like when you transfer $1000 to 1000 Euros for example

A $1000 transfer to Switzerland with less than 1% fee

So, you have to pay a fee or $9.90 and you lose nothing in the exchange.

So if one of my clients paid me $1000 I would get 1013,76 Swiss Francs​ (US dollars and Swiss Francs are almost the same)

Compare that to Paypal for a business online:​

Here is what today's exchange rate looks like (left) compared to what Paypal give (right)

A $30 loss with the Paypal exchange rate

So, all in all, I would be handing Paypal something like $60 instead of $10 with Transferwise!!!! Insane, right?

Transferwise vs Bank Fees - Still A Big Difference

If I can transfer my money within Switzerland (and I am sure it is similar where you live) then there is no fee, or very little.

If I transfer within Europe (which Switzerland is not techncially a part of) it can be free or cheap.

But any other country, it costs me $20 to send money, and at least $6 to receive it (and the sender often has to pay money on their end too).

Then there is the hidden fee in the exchange rate, which I am not able to find at my bank right now, but I am sure they are not giving me the market rate like Transferwise are!​

Let's take a look at an example from Transferwise:​

As you can see in the above example, in the middle row, there is a loss in the exchange rate of at least 1-2%.

So again, if you add this to the fee to send the money (which your client or friend might not want to cover).

There is a huge difference - $30 or more. Instead of $9.90 with Transferwise.

It is very hard to do exact comparisons as it depends on the country, the bank and the exchange. The more away from the western world you are, the more likely you are to pay more in my experience too!​ (ie. not US, EU, Canada, Australia, etc) Not trying to discriminate here, but I lost a lot of money sending money to Iceland even, just because their currency, even 10 years ago, was not Euros!

What Else Can Transferwise Do?​

I won't spend hours boring you with the details, here (you can read it on their website)​. But, here are some other cool things worthing knowing:

Transferwise Pros & Cons

No system is perfect, and of course there are a few pros and cons worth thinking about with Transferwise.

For me, it is mainly a system for transferring money to and from clients and family internationally. But it can do a bit more than that with payments via other avenues. Worth checking out the details on their site.

The downsides are small, but worth noting. This is not a complete replacement for Paypal or Stripe (both have similar high fees) but will save you lots of money on direct money transfers.​