If you’re wondering about Transferwise, it’s basically a money transfer service that’s better than banks and systems like Western Union. It is designed as P2P money transfers provider that makes it soo different from classical international remittance institutions. They are one of the best companies in the market and offer great service with low fees. TransferWise team believes international money transfers should be affordable to everyone, quick and safe. I think they successfully achieved their goal. It sounds like a good idea but common sense dictates that you need to read a Transferwise review or two before signing up for this service.
What is TransferWise?
TransferWise P2P money transfer company that is based in the United Kingdom. The company was founded back in January 2011 by two Estonian guys Taavet Hinrikus and Kristo Kaarmann. Unlikely other organizations like Western Union they are transparent about fees and never add any margin on top of the exchange rate. For example, some banks advertise free international transfers but in fact, they convert money in the extremely unfavourable exchange rate for you.
The development of TransferWise was built through the experiences of Skype pioneering employees Taavet Hinrikus and Kristo Kaarmann. As Estonians working between their native country and the United Kingdom, they felt a lot of discomforts sending money back home. This problem inspired them to create a private arrangement, where Taavet, who is paid in pounds, puts money straight into Kristo’s Estonian bank account from his local Estonian bank account. Kristo then puts British pounds into Taavet’s UK bank account with his British account. This inspired them to create a crowdsourced foreign exchange service and provide a cheaper option to established institutions.
Interesting fact about TransferWise
The organization was first launched as CommonFX, designed to represent ‘common people’ and ‘foreign exchange.’ But branding problems forced them to change the name. CommonFX got people confused as to whether it’s an electro band or a brand of kitchen appliances. ‘Transferwise’ ended up being selected to suggest the ‘wisdom’ of utilizing the service. Later in February 2012, Transferwise complete all formalities and got the approval by the UK’s financial regulator to launch their service publically.
How does TransferWise work?
As mentioned earlier P2P is the core element of TransferWise. As far as you know, regular wire transfers are made in the way that money actually crosses borders that is slow and expensive. When it comes to P2P money actually never crosses borders. How is it possible? TransferWise has huge customers base in each country where it operates and constantly has a high demand of sending an receiving money. They match people who need to make remittances in opposite directions and exchange money between them locally.
There is an example that illustrates how P2P providers operate:
- Angela lives in Australia and is sending $1200 Ausralian dollars to her friend Tom who lives in the UK
- Greg is located in London and he is sending £1000 to Adam who is in Australia
- We assume the GBP to AUD exchange rate is 1.20. If so we have perfect match to complete this transaction:
- Angela needs to send $1200 AUD to Adam
- Greg needs to send £1000 to Tom
The beauty of their system is the fact that all these complications are absolutely hidden from customers. In the customer’s perspective, money transfers with Transferwise are basically the same as conventional money transfers. The client selects a recipient along with a currency and the amount of money to be sent. Then TransferWise will do the rest for you. Just a while later, the recipient receives the payment in his currency to his local bank account.
How to start saving money with TransferWise?
It’s very easy to get started with TransferWise. Their system is very user-friendly and their support team will be happy to assist if you got stuck at any point. There is how to make your first transfer:
- First, you need to register an account. It’s very simple and takes less than a minute. Optionally you can sign-up with your Google or Facebook account.
- Order your transfer by specifying the amount you want to send and currencies. You will get a quote instantly. TransferWise will also provide an estimated delivery date for your transfer. You will need to provide personal details of the recipient and his or her bank account number. Additionally, you may be asked to provide recipient’s bank SWIFT code.
- Upload your money to TransferWise. There are two ways of doing this:
- Send money with local bank transfer that is a fee of charge.
- Pay with a debit or credit card that has an additional charge. Normally £2.
- Once you are done TransferWise will take care of the rest. They will make the currency conversion and make a bank transfer the recipient’s bank account. Normally this process takes just a day or two.
Is TransferWise safe to use?
Safety is the first thing to check when it comes to financial operations. TransferWise is operating legally and licensed in the UK under the Financial Conduct Authority (FCA 900507). Along with this, they have an exceptionally good reputation at TrustPilot with overall score 9.2/10. People share their positive experience and there are very few complaints that are mainly caused by inaccurate information provided for the transfer. So as you can see they are the trustworthy company. In any case, it’s always recommended to do your own research and make your personal conclusion.
My experience using TransferWise
Initially, I was a bit sceptical about TransferWise. They asked to send money to their bank account instead of recipients accounts that sounded very strange to me. Then I started learning more about TranferWise on the Internet. I found several Transferwise review sites and read customers feedback on TrustPilot. Additionally, I discovered a promotional link that individuals shared to obtain a first transfer free of charge. Then I decided I have to try this services. I’ve made several transfers since then and they all went smooth and quick. I’m very satisfied with how the service works. The exchange rates are incomparable with other money transfer methods, but more importantly, it saves me on banking costs. I’d certainly recommend giving it a try.