Monday, 23 November 2020

Moving currency? Try TransferWise

A couple of people I know, who work overseas a lot, use a fully online financial platform called TransferWise to manage their international funds. Last year when we went overseas for five weeks, we too used TransferWise, setting up accounts in all the national currencies of the countries we would be visiting. One transfer into each currency, then we could use the debit TransferWise card, that would automatically transfer the funds out of the local currency. Too, too easy. 

We can be paid by our employer into TransferWise, just like any other bank account. Our client can pay us into TransferWise, using any bank, credit card or other means. We get a TransferWise debit card to use, which works fabulously well alongside another brilliant feature: we can create accounts in different currencies so that we can pay for items in the currency of the country we are in. There is no limit to the number of accounts we can hold, but there is a 'limit' to the number of currency accounts we can have: 40. For most users, this is not going to be a problem! 

In addition, there is no minimum amount that you need to transfer, which is great. There is a maximum transfer of $2.2m, though few of us will need to transfer that amount in a rush. Most payments are completed within a day, which is a bit slower than PayPal (PayPal is instantaneous). 

These limitations are not a problem for most of us. And we get all of this at a fraction of the cost that banks charge for international transfers; and at a fraction of the cost of credit card international conversions. TransferWise say this is because their sole business is international, so their platform is purpose built and secured solely for international transfers. 

So how much? If we are transferring less than $10k, we will pay around three quarters of a percentage point per transfer (0.7%-ish), and over $10k costs about half a percent (0.5%). 

One limitation that we struck was that, when transferring funds via PC or laptop, we got sent a text to verify the transaction. When travelling, we needed to keep updating our phone number in the TransferWise system so that we could authorise our own transactions (our profile account details must match our bank account and ID documents). However, a solution to this was to only use the phone banking app while travelling. 

All in all, TransferWise seems to be a pretty darned good, low cost, low risk piece of kit. TransferWise provides online, email and phone customer support... in fact, the service provision here is generally superior to the banks as well. International funds transfer is their business, and they are working hard to ensure that it is smooth, cheap and reliable for users. 

And thus far, it certainly seems to be!


Sam

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