Transferwise – review of the best service for sending money abroad safely and almost for free
There was a time when international money transfers were outrageously expensive, but rules changed once Transferwise joined the game. This British start-up was founded in early 2011 by people who built Skype and PayPal. They came up with simple and innovative idea to transfer money between people rather than countries. As a result they were in position to offer great service for incredible 0.5% fee and without any hidden fee. You can say farewell to banks since they probably will be no longer competitive in this business. Intrigued? Continue reading and learn everything about this service at Transferwise review.
How much you save sending 1000 GBP to EUR?
Here is a quick comparison of how much you can get when sending money using various providers. Please note that data is static and has been collected on 04.03.2017 with the effective mid market (real) exchange rate 1.1575
|Provider||Fee||Exchange rate||Amount recieved|
|4.98 GBP||1.1575||1151.74 EUR|
|25.74 GBP||1.1391||1127.71 EUR|
|26.15 GBP||1.1329||1127.24 EUR|
|54.13 GBP||1.1229||1094.84 EUR|
How much does it cost to make a payment?
It costs very little comparing to regular bank transfers. There is a quick review:
- Real mid-market rate without any extra commission is used for currency exchange
- Each payment will cost you just 0.5% of the amount you send
- Minimal fee is £2 or €2
The same principle applies to currencies other than GBP and EUR.
For example, Alex transfers £1,000 to his friend Francisco who lives in Spain. Assuming that current mid-market exchange rate for GBP/EUR pair is 1.18, Francisco would receive €1174.10. How I got this number? The fee in this case is £5 (0.5%) and the rest £995 gets multiplied by 1.18. That simple and transparent. Moreover he would probably get his money same or the next day!
And even more. Ask your bank or local currency exchange office how much euros will they give you for £995 in cash and compare with €1174.10. For sure they will give you less money as they have their wage in the exchange rate. So the actual fee for your pocket will be even less than £5 in this case, keep this in mind.
Can I trust my money to Transferwise?
Security is paramount when it comes to money transfers. Transferwise is certified money service company founded in January 2011 in the UK. They have already earned reputation of reliable and honest financial service. There are thousands of people who trust them and using their services on the regular basis. You can find many positive Transferwise reviews and feedback online. Ask your friends and you would probably find someone who already sends money using Transferwise.
How does it works?
International transfers are expensive but what if there were a way to avoid them? There are many people who have similar needs:
- Frontier workers need to send salaries to the country they live
- Expats may want to send money home
- People may need to pay someone (individual or company) who resides in another country
If we would take them together we would figure out that their needs could be satisfied without actually sending money abroad. Money can be just exchanged between them. This requires a lot of cooperation and Transferwise is the one who takes the role of coordinator. It’s easier to explain it by example:
Michael lives in Spain and owns a flat in London. He still pays to the bank £700 each month for the mortgage. Jane lives in Manchester and plans her holidays in south France. She found amazing chalet available for rent but property owner asked to pay €826 in advance. Let’s assume GBP to EUR rate is 1.18 so £700 and €826 are equal. In order to achieve their goals we can send Jane’s money to Michael’s bank and Michael’s money to the chalet owner in France. Euro transfers between the EU counties are for free. Same time local transfers in the UK costs nothing. We did it spending no money at all!
My experience using Transferwise
I work in Gibraltar but live in Spain because live there is cheaper. I receive my salary in pounds to my NatWest bank account in Gibraltar, but I need Euros for everyday expenses. To solve this problem I found the best currency exchange office in the town. Every month I went there with a wallet filled with cash to buy Euros. Then I brought Euros through the border and deposited to my Spanish bank account. That was time consuming, inconvenient and not really safe.
Once I started using Transferwise I became a rare visitor of my favorite exchange office. I do everything through the Internet and get my salary delivered to my Spanish bank account normally same day. Moreover, because I send relatively big amounts of money I get even better deals than my favorite currency exchange office can offer! Later I decided to share my personal experience and created Transferwise review website.
Most of my colleagues started doing the same and are very happy. Some of them are paying rent using Transferwise and find it very convenient.