In the world of online money transfer services, many names share the market. One of these names is TransferWise.
TransferWise is a company founded in 2010 to meet a need. The platform has a unique take on money transfers and does not transfer money through borders at all.
The unique system for transfer of funds through the platform started when its founders began exchanging local currencies to avoid paying for outstandingly high bank charges.
TransferWise matches money transfers between currencies and pays the receiver in their local money, without transferring funds over borders. For example, if a user wanted to send $125 to somewhere in the UK, the recipient would receive £100.
However, instead of transferring the money to the UK, TransferWise looks for another user sending £100 to the US. This way, the platform switches payments, without dealing with transfer charges. Below are the key points related to the pro and cons of using TransferWise.
Pros of using TransferWise
There are many features on the platform that users can use to their advantages. Therefore, a few pros of using TransferWise include the following.
1) Low prices
One of the biggest advantages of using TransferWise is the low prices that it charges from users. The platform charges its users charges, which go below 1% some times. In contrast, other platforms charge multiple times what TransferWise charges its users.
It makes TransferWise one of the most inexpensive online money transfer services. Its services also beat the prices of offline money transfer platforms.
On top of its low prices, TransferWise only earns from the transaction fees charged to its users. The company does not benefit from currency exchange rates, which many other platforms do.
TransferWise charges its users the real mid-market rate and does not charge any markup on currency exchange services. It makes the platform highly beneficial to users. The company saves its customers $1.5 billion each year.
Apart from being inexpensive, the company also provides services in a fast manner. While the official time that the company quotes for its transactions is 1-2 days, some transactions may complete in a matter of minutes or hours.
The time for each transaction depends on the currency. However, for most major currencies around the world, the timings are fast.
In contrast, many other services, online or offline, take 3-4 business days to complete transactions, sometimes even longer. However, TransferWise is among the fastest platforms when it comes to transferring money.
The problem with many money transfer services is that they charge users some hidden fees. These hidden fees are in addition to the commission that they charge users.
TransferWise, however, does not believe in charging users with hidden fees or charges. The platform discloses all the charges that its users must pay when they make a transaction, so there are no confusions later.
Transparency in transactions and fees has been one of the biggest pros of using TransferWise. Once a user pays the platform’s charges for a transaction, they do not have to think about hidden fees.
TransferWise is accessible to users in major countries around the world. The platform operates in over 60 countries around the world and is looking to expand further.
The company also supports more than 750 currency routes around the globe, with major currencies such as USD, EUR, AUD, GBP, CAD, etc. Furthermore, the platform has more than 8 million users around the world.
TransferWise is also available on mobile operating systems which include iOS and Android. Similarly, PC users can use the platform through the web, which adds to its accessibility.
Cons of using TransferWise
Using TransferWise can also have some disadvantages. These include the following.
1) Transaction limits
TransferWise imposes some restrictions on users when it comes to transferring money online. These restrictions may come in the form of a minimum transfer amount, which is around $250.
Furthermore, it may also come in the form of countries or currencies to and from which users can send money. These restrictions impose unnecessary limits on users, which some may find disadvantageous.
For most transactions, though, these restrictions or limits may not apply. However, users must understand they have limited options when it comes to transfers.
2) No ideal for high-value transactions
TransferWise charges its users a commission-based fee. As mentioned above, the charges are low and, therefore, ideal for small value transactions.
However, these fees may quickly add up for high-value payments and receipts. For some users, the charges may be negligible, but for others, even a small change in these fees can be significant.
For example, if a user sends $100 to a country for which the platform charges 1% fee, the users will pay the platform only $1. However, if the value of the transfer goes to $10,000, the user has to pay $100, which is a high charge.
TransferWise is among the many online money transfer services platform. The company has a unique transfer system that avoids sending money over borders. There are many pros and cons of using TransferWise a detailed description is available above.