The ULTIMATE TransferWise Review | How Does it Work | TransferWise vs PayPal vs Revolut

The ULTIMATE TransferWise Review | How Does it Work | TransferWise vs PayPal vs Revolut

transferwise review

Getting stung by large payment fees when sending money abroad? I was too when paying for the manufacture of goods in my physical products brands. I thought there must be a better way – there was!

I did some research and discovered TransferWise. It’s the cheapest and most reliable service I’ve ever used. Now, I save £100’s of pounds every time I make a payment.

Consequently, I’ve spent some time to share everything I can about it – because it’s great. I hope you find this TransferWise review useful!

What is TransferWise?


TransferWise is an online money transfer service, which enables the average punter (or business) to transfer money around the globe up to 8x more cheaply than using your bank. The surprisingly simple system utilises two local transfers, instead of one international transfer to keep fees very low.

The platform was launched in 2011 by the first ever employee at Skype. It’s also backed by Richard Branson (Virgin) and Peter Thiel (PayPal), that ticks the expertise box for me.

TransferWise is an online account that lets you send money, get paid, and spend money internationally. With a TransferWise account, you can send money abroad, get paid in other currencies, and spend abroad on the TransferWise debit Mastercard.

– TransferWise.com

How does TransferWise Work?


Consider two people, Bob and Jane.

Bob lives in the US and gets paid in dollars (USD), but he wants to pay for something in France using euros (EUR).

Jane lives in France and gets paid in euros (EUR), but she wants to pay for something in the US using dollars (USD).

Instead of making the payments individually, thus paying hidden fees. Bob simply pays Jane, and Jane simply pays Bob. They use a mid-market exchange rate to keep it fair. Both get the currency they need, neither pay traditional banking fees.

This concept is how the TransferWise Peer-to-Peer (P2P) system works and is exactly how the founders came up with the idea.

TransferWise now have accounts in 64 different countries, meaning money never actually crosses any borders.

Today for example, if you want to convert GBP to EUR, you simply pay in to TransferWise’s GBP-based account in the UK. Then, the same amount is sent from TransferWise’s EUR-based account in Europe to the recipient.

However, this doesn’t really matter to us as it’s all done automatically. I’ll show you how to send money a bit later (it’s easy).

TransferWise fees: How much does it cost?


The main selling point of TransferWise is the low fees and ‘transparency’. I think that word gets overused in this arena however here, what you see is what you get.

As a rough guide, expect to pay around £3.50 per £1000. However, this rate will vary by currency. Additionally, larger transfers are more cost effective than smaller transfers.

If you’re finding this review useful check out:

The best way to find out exactly how much a transfer/payment will cost, is to use their website (no log in required). This gives a great comparison to other alternatives too.

Enter the amount you would like to send in the top box OR how much you want them to receive in the bottom box.

Then select compare price for the breakdown.

Transferwise compare price

Here’s some examples:

Example 1

To send £100 to a friend in Spain, they will receive 112,77 EUR and it will cost us just 61p!

Transferwise GBP to EUR rate

Here, you can see TransferWise weighs in up to 13.22 EUR cheaper than sending with NatWest – great!

Example 2

Sending £5000 to someone in Europe.

Transferwise monzo GBP to EUR example rate

In this instance, sending £5000 will cost £17.21. Compared to sending with HSBC, this is a saving of up to 190,88 EUR.

I’ve drawn a box around Monzo too as they have recently partnered with TransferWise and use the system for their international payments.

Notably, TransferWise isn’t the cheapest option in this specific circumstance, Western Union (WU) is. However, you may notice the yellow hazard triangle at the right-hand side of the WU total. This states that the rate WU offer, is only applicable for transfers to Germany – other countries rates will likely be higher.

Additionally, I like the fact that while TransferWise weren’t the cheapest in this instance, they show good will by letting you know it with the statement at the bottom of the table.

Types of transfer available


There are three types of transfer to choose from:

  1. Low cost transfer – Sends money from your linked bank account – cheapest.
  2. Fast and easy transfer – Sends money from a debit or credit card – easiest.
  3. Advanced transfer – Sends money from your GBP account outside of the UK (or whichever country you are in) – for international payments.

The picture below shows the difference in price based on a £100, GBP – EUR transfer.

Transferwise Transfer Types

Notably, certain currencies are sent via the international SWIFT network, which most banks charge a fee to receive. If you’re sending to these currencies, you can expect to pay an extra couple of pounds. I don’t know, any network that circumnavigates this – I’ll let you know if I find one!

Is my currency supported?


TransferWise supports in excess of 750 currency routes, so I think it is highly likely however, you can check for certain here.

TransferWise exchange rates


TransferWise uses the exact mid-market exchange rate from Reuters. That’s the same exchange rate you’ll find if you Google it or use xe.com.

Why is this important?

Unfortunately, most banks and other services don’t offer this rate to their customers. Instead, they add a mark-up and offer you a worse rate. They keep the difference for themselves.

TransferWise also guarantee the exchange rate (lock it for a period of time), usually 24-48 hours. This means it won’t fluctuate unexpectedly, avoiding any chance of the transfer changing value (good).

TransferWise for Business


I personally use TransferWise for sending money to China to pay manufacturers working for me in my physical products business.

It’s perfect for this task being cheap, batch payments possible (up to 1000 transactions per CSV) and repeat payments are easy. Transfer times are always quick, no longer than 1-2 days. However, I understand this is largely down to the speed of the banks at either end.

Here’s what they have to say:

TransferWise for Business is a free, online multi-currency account. It lets you make payments, get paid, and spend money around the world with the real exchange rate. You can also use it to pay invoices, buy inventory, and handle payroll in over 70 countries – for up to 14x cheaper than PayPal.

-TransferWise.com

A nice comparison table vs PayPal below from their website:

TransferWise API


TransferWise supports automation through API, hooray for you technical people (nerds).

Sandbox environments are pre-funded with £1,000,000 of test credit for you to play around with and learn the ropes. Once you are happy, get your API tokens from the sandbox or your account settings.

Once connected, you can build anything you want or just automate payments and processes, saving a lot of time.

TransferWise also works with Xero and other accounting tools. You can connect your accounts to automatically sync your activity.

TransferWise for a one-off payment


While fantastic for business, the platform also works well for a one-time thing. Whether that is a large payment abroad or sending money to a relative.

Again, the transfers are fast and reliable. Priced from 0.35% + 80p and with no lower usage limit, there’s no need to be frequent user.

However, TransferWise’s biggest limitation is that payments can only be made to a bank account. This will cover most situations, but one to bear in mind.

If you want the ability for cash pick-up or to pay cash, I’d suggest using a service like Western Union.

Is TransferWise safe?


Firstly, my personal experience, I’ve never had a problem (touch wood). Evidently, I’m so impressed with them I’m writing a massive article!

TransferWise is a licenced Authorised Electronic Money Institution. A what?

This means simply that they are regulated by the Financial Conduct Authority (FCA) and in the UK, Her Majesty’s Revenue and Customs (HMRC). Where it operates in other countries, it’s regulated by the respective institutions.  

For example, in the US, they are registered with the Financial Intelligence Unit (AUSTRAC) as money remitted TransferWise Inc. and are registered with the Financial Crimes Enforcement Network (FinCEN).

Although expected nowadays, they use institution grade security such as HTTPS encryption and two-factor authentication (2FA).

Like large financial institutions, TransferWise verifies its users to protect against fraud and money laundering. Their verification process may appear bothersome however, try to look past it – it’s a good thing!

TransferWise vs PayPal


I used to pay my suppliers via PayPal for ease however, the cost is steep.

PayPal is great for domestic transfers and offers good payment security, it’s also the largest online payment company in the world. But once you start sending sizeable chunks of cash overseas, the price racks up.

Payment services make their money in two ways: transaction fees and exchange rate mark-up.

PayPal’s exchange rate mark-up ranges from 3.5-4% for overseas transactions, rendering smaller sums perhaps acceptably priced, but larger sums overpriced. (PayPal has so many fees it’s hard to keep up, you can read about their fees here)

I made a quick infographic to help summarise they key data:

To save doing the maths though, just use the price comparison tool here. I’ve created another example of sending £1000 to a US bank account with it. It shows PayPal costing around 3.5% more than TransferWise for the transfer.

Transferwise vs Paypal fees

TransferWise vs Revolut


Both of these companies offer online transfers however, this comparison is strictly regarding their debit card products.

TransferWise offer a debit card with their borderless account, Revolut offer a prepaid Mastercard. What’s the difference? I made another infographic to summarise my thoughts:

Transferwise vs revolut

TransferWise pros

  • Larger, more established company with good track record.
  • ‘Transparent’ (read: honest) about rates and fees.
  • Borderless account is available in a larger selection of countries with 40+ currencies.

Revolut Pros

  • Wider selection of products.
  • More options for business customers.
  • Cheaper if making a large amount of ATM withdrawals overseas over the £200 limit.

Verdict?

If you need to be making and receiving payments, making international transfers and use a card while travelling. TransferWise is the best choice for you being both cheapest and better supported globally.

However, if you will be primarily withdrawing cash abroad in droves, consider using Revolut for the 0.5% fees over the £200 withdrawal limit.

Using TransferWise for Alibaba


I use TransferWise to make payments to bank accounts on Alibaba using the Trade Assurance system. It works wonderfully and I have never had any problems.

For a full write up and guide see my post: The Cheapest and Safest Way to Pay on Alibaba: TransferWise

Trustpilot rating


TransferWise has 64,393 reviews at the time of writing with an overall rating of 5-stars. The vast majority of people are clearly very happy with the platform, with an impressive 87% of those reviews being ‘Excellent’.

transferwise rating

Read some of the reviews for yourself over at Trustpilot here.

TransferWise step-by-step payment process


It’s a simple process:

Create an account and verify your identity here.

Next, in your account select ‘Send money’.

Transferwise send money

Enter the amount you want to send in the top box, or the amount you want the recipient to receive in the bottom box. You can compare prices to make sure you are getting a good deal. Then select ‘Continue’.

Transferwise send money box

Select who to pay – a new or previous recipient.

Transferwise send money recipients

Fill in the recipient’s details and select ‘Continue’. The next page allows you to review the payment. Once you’re happy, select ‘Confirm and continue’.

Transferwise review payment details

You will then input your debit card details if paying pay card for example, and the payment will be sent.

You will receive two emails. One when the money has been received by TransferWise and one when the transfer is sent.

Parting thoughts


Well, this has been my longest post to date. I get a lot of questions about international payments, so I really hope this review has been of benefit to you if you are one of those people.

Some final thoughts:

  • TransferWise offer a cheap and honest service.
  • Use their comparison tool to find the cheapest rate for any given transaction.
  • I would recommend using them over PayPal and Revolut.
  • The platform has a nice interface and you are sent emails letting you know how the transfer is progressing.
  • Ideal for personal use with no lower usage limit, or business usage with API automation and borderless account options.

If you have any thoughts or want to chat, leave me a comment below!

Take care,

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