If you are someone who often transfers money internationally, you probably know what Wise is. You may be wondering, “How does Wise work?” and “How different is it from other money transfer services?”
Wise, formerly known as TransferWise, is a peer-to-peer service that allows you to send money all over the globe.
[I use Wise to send money to my entire team. My team prefers it over Paypal in most countries].
Wise processes money transfers by exchanging currencies as soon as they receive a request.
They refer to the exchange rates found on Google or Yahoo before making the local transfer to your receiver.
This process allows you to save more money from the big chunk that banks or credit card companies charge you.
If you want to know more about Wise and why you should consider using this platform for transfers, then continue reading this Wise review.
What is Wise?
Wise or TransferWise, is a relatively new platform that allows you to send and receive money around the world conveniently.
Their services are cheaper and fairer because of their exchange rate transparency as you can see via Google, Yahoo, and XE.
They aim to provide a better way for individuals and businesses to move money without the extra large fees.
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How Did Wise Begin?
Taavet Hinrikus and Kristo Käärmann are the two good friends behind the start of TransferWise in 2010, which would then change to Wise.
These two friends realized how much banks charge transfer fees for their salaries.
Taavet receives money in pounds but pays the mortgage in Estonia in euros while Kristo receives his euros while living in London.
The money transfer process would be going to a bank, transferring the money from Estonia to England.
The waiting game takes about four days, but it does not include the effort and hassle of walking into the bank.
Another issue that the two found is that their calculated salary based on exchange rates did not match what they received.
So aside from the exchange rates that did not add up to what they expected, the bank fees are also to blame.
The two came up with a plan to avoid large fees by sticking to the fair exchange rate.
Taavet transfers euros to Kristo’s bank, while Kristo deposits pounds in Taavet’s account to dodge fees.
This idea gave birth to TransferWise, which is now revolutionizing the way money moves globally.
Their multi-currency account allows people from personal to business purposes to manage money easier.
How Does Wise Work – Step By Step Guide
Now you know what Wise is and how it came about, you might want to try using their services to enjoy what they promise.
Sidenote: Wise did a rebrand launch in 2023. They gave Wise a fresh new look (from blue to green). I like it.
Sending and receiving money through Wise is very easy. But if you need help for a smooth transaction, here’s a guide:
Check Fees Using Wise Calculator
Wise has a calculator available on their website that allows you to see how much the exchange rate and fees are.
You simply have to type in how much are you going to send and in what currency you want to send it.
The calculator will show Wise fees and the exchange rate based on Google even though you don’t have an account yet.
This feature allows you to see the transparent money transfer process of Wise, so you know if you’re saving a lot.
They also offer the lowest fees, which are almost eight times cheaper than bank fees.
However, you need to note that some currencies may require additional fees, but Wise explains why it is necessary.
Create A Wise Account
Creating an account in Wise is free and only necessary if you are the sender, whether you are an individual or a business.
If you are the receiver, you don’t have to create a Wise account because Wise will directly send the money to you.
Wise is available online via mobile for both android and OS users, and desktop (I use desktop).
Verification may be necessary for some countries and it takes up to three days before you can confirm your status.
As a financial institution, Wise may require an ID to proceed with any transaction depending on your country and the amount.
If you are signing up for a business account, you will also need to provide information about the business and verify it.
You’ll typically need a scanned copy of your ID, proof of residency, and a photo of you holding your ID.
Provide Recipient Details
After creating an account and verifying it, you can now proceed with filling out the recipient details.
It has to include the name of the receiver and their local bank details to where the money will go.
You can transfer money to one of your accounts, someone else, a company, etc, as long as it is available.
Again, the recipient does not need to create a Wise account to receive the money but only a local bank account.
Process the Money Transfer
With all the necessary details accomplished, you can now process the money transfer.
You now have to pay for the money needed to be sent along with the fees computed at the total.
You can pay through debit and/or credit cards or from your local bank to Wise’s bank account in your area. [I have a team member set up payments on my behalf, and then I approve them].
If you live in the US or Canada, you have to link your bank account to Wise to push through with the payment.
Some countries also offer different payment options, and you can check them once you process the transfer.
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Let Wise Do The Work
Once you have paid for the money transfer, Wise works to transfer the money as soon as possible worldwide.
Their process includes connecting with the local bank accounts to send the money with less fees.
After arranging it, Wise will then send a tentative arrival of your money to the recipient.
You can expect it to be faster than a bank transfer, and in some cases, it can be real-time.
As long as you fill out the right recipient details, there can be no hassle in the process.
The receiver can even receive a notification to track the money through email, so they know if it is a successful transaction.
How To Receive Money From Wise?
If you are at the receiving end, receiving money from Wise is a much easier process.
You just need to provide your bank account details in your local currency to the sender, who will pay.
There are over 50 countries available to receive money through Wise. You can see the list of the counties here.
If you want to receive money in the same currency like USD, GBP, EUR, NZD, PLN, and AUD sent to you for free; you need a Wise account.
You have to open a currency account through Wise as the same as the currency you are expecting to receive.
Then, you need to accomplish some requirements in the account details to fully set up your Wise account.
You can now use your Wise details to share with a client, business, or individual whenever they transact.
Their payment goes directly to your current account as long as it is in the same currency, or else it will not proceed.
For example, the sender sent money in GBP, so your currency account needs to be a GBP account.
Once you have the money in your currency account, you can easily convert it to your local currency if you want.
How to Pay for the Money Transfer?
Wise offers various payment methods to transfer money, depending on the country.
However, it is up to you to choose which way you want because some are quicker or cheaper.
Below are some of the available ways to pay so you can choose which one is right for your transaction.
Bank Transfer
International money transfer through banks is the cheapest option on the list when paying.
However, it can take a little longer than debit or credit cards to receive the money.
If you and the receiver are not in a rush to process the transfer and want a cheaper alternative, you may opt for bank transfers.
Debit Card
Paying through a debit card allows a quick and easy international money transfer in Wise.
However, debit card fees are more expensive than bank fees but cheaper than credit card fees.
Credit Card
If you are a Visa, Mastercard, or Maestro card holder, you can pay for your Wise transfer using your credit card.
As mentioned, credit cards process money transfers faster than banks, but you can expect more expensive fees.
PISP
PISP is a service provider that allows transacting any payment on behalf of the sender.
You can grant Wise the permission to transfer from your bank account without logging into your online banking.
It is as cheap as the bank transfer, but not all banks have this kind of service supported.
Swift
SWIFT is the largest payment method for international money transfers and settlements.
It works by assigning users a unique ID code that holds the bank name, address, and other details of the person.
This method takes a long time and can be more expensive because of the bank and handling fees.
Apple Pay
Apple Pay is a wireless payment service offered to IOS users that allows them to send and receive money.
As long as you have your Apple Pay activated, you can use it to pay for your money transfer in Wise.
It is a quick way to pay, but there may be extra fees to consider, like the bank, credit card, and withdrawal fees in the app.
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How Does Wise Keep Your Money Safe?
Wise follows regulations set by different organizations for all the countries where they provide their service.
These organizations are in charge of creating rules to protect your money and to keep Wise transparent.
Aside from that, Wise also has their security team that protects your data and keeps transactions secured.
Protected by Banks
Wise stores your money in safe and established banks, so they don’t combine with Wise’s accounts.
Therefore, your money and Wise money do not fuse and cause issues. Your money is inaccessible to their partners.
Audit
Wise safeguards your money by regularly auditing the money that comes in and out of their accounts.
As mentioned, the client’s and Wise’s money are separate. Thus, Wise ensures their financial stability to avoid any discrepancy.
Data Protection
The in-house team of Wise provides a secured data protection system to keep your information safe.
They have a transparent process of collecting personal data and its storage so clients won’t worry about leakage.
Agency-regulated
Wise follows regulations from different agencies and authorities around the globe, like FCA and FinCEN.
These agencies allow Wise to operate by following rules to ensure the security of your money.
Two-Factor Authentication
Wise uses two-factor authentication to provide more layers of protection to your account and data.
This security feature ensures that only you, the client, can have access to your money.
Wise Features
Wise is long far from what it was when it started in 2010. They now have different features that can still help people financially.
From TransferWise, the company changed its name to Wise as it signifies that Wise now offers more than money transfers.
Here are some of the features that Wise now offers to its clients all over the world:
Multi-Currency Accounts
Wise gives you the option to create a multi-currency account so you can hold more than 50 currencies.
Using a Wise multi-currency account, you can transact your money in any currency available and convert them as needed.
You can use the real-time exchange rate of your currency when you decide to convert your holdings.
However, there are fees to consider when using this feature, especially if you will send money in a different currency.
You can get account details for some currencies to receive money from around the world.
And you can spend the currencies in your account around the world with the Wise debit card.
Find out if the Wise card is available in your country.
Wise Card
After you have a multi-currency account, you may want to spend your money everywhere.
Wise offers their Wise card, which functions as a debit card that you can bring and use in the available countries.
If you love traveling internationally, this card allows you to save money from the fees that you usually spend abroad.
Generally, a Wise card is the physical form of your multi-currency account that can send and receive money in different currencies.
To apply for a Wise card, you may check first if Wise offers this feature in your country through this list.
Then, create a Wise account and include your first currency account. There are over 50 currencies available and you can add them afterwards.
This multi-currency account links to the debit card that you can use as long as they have enough balance.
To get the Wise card, you have to order it through their website or mobile application.
You need to provide your name and address and wait for the verification.
Double-check their site and see if there are specific terms applied to your country regarding the shipment.
Finally, you need to activate your Wise card once you receive it.
For US Mastercard holders, you’ll use the six-digit code under your name in the card.
For Japanese Mastercard or Visa holders, you can activate it by transacting with your PIN at an ATM.
Money Transfer
Wise became famous for its money transfer services. Now, you can send money to over 80 countries.
Their money transfer service is available for both mobile applications and desktops for accessibility.
Senders can send money with their Wise account, and their receiver can directly receive it in their bank account.
The established payment network of Wise allows it to be cheaper than the usual money transfer services by banks.
Wise charges cheap fees and does not require any subscription to avail it so you can save a lot from them.
You can receive a salary, business payment, pension, and more through Wise, so you can get a fair amount.
Assets
Asset is a new feature offered by Wise that allows you to use your money from your account to invest in stocks.
Some of the stock investments available are from Google, Tesla, and Apple, with capital at risk.
As of now, Assets is only available in the UK for individuals that are tax residents in the UK. But they plan on expanding this service.
You can choose how you like to hold your money in your account from cash or stocks. But by default, it is in cash.
You can change this setting by going to the currency account you want to use and then choosing the “Change Asset” button.
This change can take up to two days but longer if there are pending transactions in the account.
By choosing stocks, you invest all of the money in your account in Wise’s chosen index tracking fund.
Meanwhile, if you settle for cash, your money won’t grow, but it will not suffer any stock market risk too.
Wise still covers your money under their protection policy if you keep it in a cash setting.
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What are Wise Fees?
Wise is always transparent on the fees they charge their users, and you can see it using their calculator.
There are no hidden fees, so you don’t have to worry about sending or receiving an unfair amount.
Here are the fees that Wise includes in the calculation of your total money transfer transaction:
Card Fees
If you opt to pay using a debit or credit card, Wise charges a fee higher than bank fees.
For instance, Wise charges 3.8% from credit cards and 1.25% from debit cards, but they process personal transfers quickly.
Meanwhile, Wise charges business accounts with 4.33% from credit cards while 1.1% from debit cards.
Another thing to consider is when you send USD with a non-American card; Wise deducts 0.8% to 4.55% from it.
For a cheaper card fee, you can always opt for the bank transfer, with its downside being a slightly slower money transfer.
Service Fees
Wise includes a fixed fee and a certain percentage of the amount you are sending in their service fees.
The service fees may be different depending on the currencies or what country you are sending it from and through the platform.
The easiest way to see how much you are expecting to pay is through their Wise Fee Calculator.
Pros of Using Wise Money Transfer
Low Fees
Wise offers one of the cheapest money transfer fees because they use real exchange rates with lowest fees.
They are very transparent with their calculations, so clients can see how much they can save while using Wise.
Efficiency
You don’t have to wait for days before you receive money sent through Wise.
You can expect to complete a transaction within a day, and in some cases, in real-time.
FinCEN-registered
Wise is a Financial Crimes Enforcement Network (FinCEN) registered company which means your money is safe.
They help to ensure that Wise operates similarly to a normal bank to guarantee money and data protection.
Accessibility
One of the reasons why Wise started is because of the inconvenience of walking into a bank and transferring money.
With Wise, you can simply send and receive funds online through their mobile application and site for desktop.
Services
Wise revolutionized how money moves globally; thus, not only do they offer money transfers but also other financial services.
These services include Wise cards, multi-currency accounts, Assets, and more. Additionally, individuals and businesses can avail them.
Cons of Using Wise Money Transfer
No Cash or Cheque Payments
Wise has no physical offices to transact, so they don’t accept cash and cheque payments.
Which means you can’t deposit cash payments.
But they offer several payment options, including debit and credit cards and other online payments that you can use.
Fees and Limits
Creating a Wise account is free, but there are still fees to consider depending on the currencies of countries sending or receiving funds.
Furthermore, there is a limit on how much an account can hold or receive based again on the currencies.
No Interests
Since Wise is not a bank, you won’t earn interest by storing your money in a Wise account.
However, you can try their Assets feature to earn through stock investments but with risks.
Frequently Asked Questions (FAQs)
Is Wise Trustworthy?
You can trust Wise to protect your funds when sending and receiving money internationally.
Their million users transact with billions of funds annually, which proves their reach in the market.
They are also under the regulation of FinCEN and other trusted agencies in different countries.
Finally, their platform itself uses the highest quality of technology to keep data safe and secure from any threat.
Is Wise Good to Use?
Wise is a good service to use because they offer different options so you can see which saves you more money.
It includes a mid-market exchange rate with the lowest fixed fees and bank fees.
Their transfer is also almost instant, and you can track it to check if the recipient has received it already.
Another perk of using Wise is that you can hold, send, receive, and use different currencies while using one account.
Why is Wise Cheap?
Other service providers and banks have hidden fees that they add when you transfer internationally.
In some cases, they add this fee by compromising the currency conversion. Thus, giving you a poor exchange rate.
Meanwhile, Wise uses the fair exchange rate with their low fixed rate, which you can see with their Wise Fee Calculator.
There is no hidden fees disguised as free or 0% commission because they provide transparency.
Is Wise a Bank Account?
Wise is a non-bank service provider, which means that your account is a digital account or wallet.
However, Wise operates under the same regulations normal banks follow, making it safe.
You cannot apply for a loan or earn interest in a Wise account, unlike what you can do with a bank.
But you can manage your funds without the hideous transaction fees or poor exchange rates all over the globe.
How Long Does Money Transfer Take?
For the usual currencies used to transact globally, Wise can process your transfer in real time to 24 hours.
The period still depends on the payment method you choose to pay and if there are any routine checks done.
You also have to note that if there are holidays or problems with the local bank of your recipient, it may take longer.
Also, before you send your payment, Wise shows an estimated time of the fund’s arrival, so you know what to expect.
Good thing is that Wise provides updates, and you can track your transfer using your account and receiver through email.
Did Wise Rebrand Itself?
Yep. In early 2023, they launched and created a cool new look.
Green…
Some love it. Some hate it.
No big deal.
Just new branding.
Read more here if you’d like.
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Final Thoughts: Why Choose Wise?
Wise stays true to its mission of helping individuals manage funds with cheaper and fair rates and efficient service.
They have over a million users (including us!), both personal and business accounts, that trust them with managing money.
Their transparency on fees allowed clients to entrust transactions with them because they could save more.
With Wise, clients can hold more than 50 currencies for free and use them internationally with the cheapest fees.
Their partners and investors are legit and leading institutions like Bolt, Monzo, Paypal co-founder Max Levchin and more.
Our view is that it’s a trustworthy service that’s worth using.
