More people are beginning to realise that there is a better way to make international money transfers using peer-to-peer money transfer services like TransferWise UK instead of going the traditional route of using a bank. Are you considering using this service for your next international transfer? Read on to discover whether it is truly a viable option for you.

About TransferWise

TransferWise is a peer-to-peer money transfer service founded by two Estonian friends, Kristo Käärmann and Taavet Hinrikus. The company was launched in 2011 and now supports several currency routes across the globe. They don’t engage in the traditional currency transfer model of taking the difference between the buy and sell rates, instead, they use the inter-bank mid exchange rate and have a small commission on international money transfers.

The founders of the company were frustrated by the extra money and time that it took to transfer money to and from Estonia and London where they lived. TransferWise was created to provide a workaround to their problems and has now become a billion-dollar business.

TransferWise review

TransferWise makes it possible to transfer money internationally at a cheaper rate than what the traditional channels offer. They convert currency at the real mid-market exchange rate and their fees are low and transparent, making them highly competitive. They have received thousands of excellent reviews across the web due to the advantages they have over other services.

The service provides the options of making payments using a debit or credit card, a bank transfer, or Apple Pay once you have the TransferWise iOS app. Many users love the service because of the great user interface that makes everything from sign up to transfer super easy. You can expect the money to be received within 1 to 4 days, depending on where you are sending the money to. They offer transfers to and from a limited number of currencies. Another drawback is you can only transfer money to a bank account.

How does TransferWise work?

TransferWise makes it possible for you to transfer money internationally while spending as much as 8 times less what you would have spent as bank charges. This is possible because it works using a peer-to-peer system. For instance, if you want to send money from UK to India, the system finds another party who wants to send money in the opposite direction, that is, from rupees to pounds.

The process of matching currency flows automatically at the true mid-market exchange rate. In essence, the money never really travels from one country to another. This method is advantageous because it saves users from having to pay hefty bank fees and taking on extra costs by converting currency at an unfair rate.

Initiating a transfer is easy too; all you have to do is head to the TransferWise website and enter the required details. You’ll be notified via email when the money has been received by the company and when it has been sent. Depending on where the money is going, it may take only a day for the transfer to be completed.

TransferWise vs PayPal

Both PayPal and TransferWise are fantastic options for transferring money internationally, especially when compared with banks. However, TransferWise beats PayPal on a few fronts. While TransferWise uses the mid-market rate and does not make profit from the transfer rate, PayPal uses bank-provided wholesale rate with an addition of 2.5% charge for exchanging currency in your account and 3.5 to 4% charge for currency exchange. Also, PayPal transfer fees are higher.

While cost is likely to be the first consideration, speed also matters and TransferWise wins again with an average transfer time of 1 to 2 days. However, both services can take up to 5 working day to complete the transfer. In terms of convenience, the winning service depends on who you need to send money to. If the recipient has a PayPal account, then PayPal wins for ease of use. But if you need to send money to a bank account, then TransferWise is the winning option. 

TransferWise fees

TransferWise charge different fees for different currencies. They take a transfer fee of 0.5% of the amount if you are sending to GBP, but if you are sending from a currency that has a different fee, you will have to pay the higher charge. For transfers to GBP to other currencies, they may charge 0.45% of the amount to be converted plus £1.00 GBP. The rates differ depending on where you are sending money to.

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