Transferwise is a revolutionary money transfer service that’s changes the way how we think about fund transfers. Unlikely banks and typical payment systems they transfer money between people rather than countries. It may sound complicated from the beginning but the idea under the hood is very simple.
The remarkable thing is that all people who take part are helping each other to make their payments happen.
Register and calculate your first payment
The registration is very quick and simple process. You can even register with your existing Google email account that will be super fast.
Now you can login to the website, specify the amount and currency you like to send and the currency you like to get. The system will immediately calculate the amount to be received including the service fee. Please note the amount is estimated and can vary depending on currency exchange rate.
Why conversion rate is estimated?
Remember transfers are made between people those payments are not processed immediately. System is looking for a match for your payment and makes the conversion only once the match is found. That exchange rate can be different from the one you seen once you submitted your payment as currency exchange rates are dynamic and change over the time. In order to protect your payment Transferwise gives you an option to cancel payment in case of unexpected spikes of exchange rate. The default value is 3% threshold but it can be modified.
Place the order and upload funds
Once you confirm your order you’ll need to provide recipients banking details similar to bank transfer. You can also specify payment reference because recipient will see Transferwise as sender of the payment. However your initials will be provided in reference even if you keep it blank.
Once you complete this small form you will be asked to upload funds to the particular Transferwise bank account. This account will be same currency and bank transfer will cost you no extra money. Optionally you can use a credit card as alternative way for uploading money.
For regular payments you can save your recipient details and speed up your further transfers. I would also recommend adding Transferwise bank account to the list of habitual payees in your internet bank. They keep using same details including your unique reference ID for each further payment.
Thransferwise matches and converts your payment
Once money arrived to Transferwise bank account the system starts looking for other people who need to do the opposite transfer. Usually several persons are involved in this process and it mostly depends on how much money you transfer. This process is transparent and you have nothing to worry about. In the result your transfer is done making several individual conversions using effective market exchange rate that can be different. In other words different parts of the transfer can be converted using different exchange rates. Normally it takes a day or two to process conversions. For big amounts it could take even more as more matches require to be found.
Money reach the destination
Once all conversions are completed funds are sent to recipient’s bank account. Usually money arrive in several hours after the moment they where sent. That’s pretty much all.
This is an original video from transferwise.com