Wise: Our Review of the Iconic Money Transfer App

Are you Wise about global money transfers? Sending money from one country to another has never been so easy. In the past, international money transfers had restrictive conditions. The main service providers were companies such as Western Union and MoneyGram.

Nowadays, an increasing number of online financial technology companies allow you to send money abroad with just a few clicks. One such platform is Wise.

Known as TransferWise until 2021, Wise has become one of the world’s most popular money transfer platforms, moving over 100 billion dollars annually.

We provide you with a comprehensive review of Wise so that you can decide whether it is the right money transfer solution for you.

More specifically, we explain how to send and receive money on Wise, how to transfer money to a Wise account, and how Wise compares to competitors such as Western Union and PayPal.

Read about international money transfers in our Ultimate Guide to Personal Finance for Canadian Immigrants in 2022

What is Wise, and how does it work?

Wise was launched in 2011 under the name TransferWise. This financial technology company has its own payment network, providing cheaper and faster international money transfers compared to the payment system used by traditional banks to send money abroad – the SWIFT system.

While Wise started as a money transfer solution directed at customers needing multicurrency international transfers, with its offerings now include multicurrency accounts, debit cards, and several features for business clients. Let’s take a closer look at how to create a Wise account and use each of these features.

Creating a Wise account

If you don’t have a Wise account and wish to create one, go to wise.com/ca, and click on the Register button. If you want to create a business account, make sure to select this option before clicking the Register button. You can register an account with your email address or a Google, Meta, or Apple account.

You can register from your mobile. Just download the Wise app for Android or iOS and follow the same steps described above. First, to create an account, you must select your country of residence and provide a valid phone number.

Once you provide this information, you will be asked to create a password. After completing this final step, you will be able to access your account.

You need to provide several personal information before doing any of these the first time. The information required includes your full legal name, date of birth, address, and phone number.

You will be asked to upload your ID documents to verify your information. This is a standard procedure.It protects your funds while preventing money laundering.

Valid ID documents include your passport, national ID card, or driver’s license. Valid proofs of address include bank statements and utility bills.

Wise may request additional documents from you, depending on how you use the account. Opening a business account requires that you provide information about the business (e.g., industry and registration number) and information on the directors and shareholders who own at least 25% of the company.

This is the same information you need when registering your business in any province. Verification of ID information is often instant, while customers can expect a few working days before their additional documentation is approved or not.

Sending money with Wise

On Wise, you can send international transfers to 160 countries. The recipients do not need a Wise account; you can send money directly to their bank account. The platform supports ACH, Wire, or SWIFT transfers.

When you enter the amount you want to send or the amount you want the recipient to receive, Wise shows you the fees, exchange rates that apply, and the estimated arrival time. If you don’t know the recipient’s bank details, with the recipient’s email address, Wise will send an information request by email on your behalf. Before sending the money or the request, you may also want to add a message for your recipient.

Sending a large amount of money through Wise can be slightly more complicated, as many banks limit how much money you can transfer online at once within a 24-hour or one-week time interval. If this is the case, you will need to talk to your bank on the phone or in person.

After addressing any issues with your bank, Wise may ask for additional details before approving a large sum transfer. It is usually the case that the variable fee you have to pay when sending an international payment with Wise will get cheaper if you are transferring a high sum of money.

Receiving money with Wise

Wise provides its users with local account details in up to 10 currencies, enabling them to receive local transfers in any of these currencies fee-free. Receiving money in a Wise account is similar to receiving money in a standard bank account, as you must share the account details of one of your currency accounts and wait for the transfer to occur.

You can receive money in EUR, USD, GBP, AUD, CAD, NZD, RON, HUF, TRY, and SGD. It’s essential to keep in mind that you can only receive money in the same currency as your account.

For example, if you want to be paid in USD, you must share your USD account details with the individual or business paying you. Once you have received the money, you can convert them into other currencies in just a few clicks.

Receiving money with your account details does not entail fees in most situations, except when receiving US dollars SWIFT or domestic wires, which cost $4.14 per transaction. Payment options do not include cash or cheques. If you are looking for a payment solution that allows transferring funds from a chequing account to another, Interact e-Transfers is one option to consider.

There’s no limit on how much you can receive to your accounts, except for USD accounts, where some limits do apply. For example, you cannot receive more than USD 1,000,000 per day as an individual and more than USD 3,000,000 per day as a business. In addition, your personal account has an annual limit of USD 5,000,000, and your business account has a yearly limit of USD 15,000,000.

Funding your Wise account

The easiest way to fund your Wise account is arguably through a bank transfer. Besides wire transfers, you also have the option to use an online bill payment, a direct debit, or a credit card or debit card.

If you want to add money directly through Wise, you need to go to the balance where you want to add money to and click Add. You will then be asked to choose the amount of money you want to add and select your payment method, for example, with your credit card.

You can also send money from a bank account to a Wise currency with account details. To do so online, you need to go to your online banking and request a standard transfer, providing the bank account details of your Wise account. For the bank transfer to be approved, it’s important to ensure that the currency you are sending matches the currency of the receiving Wise account.

Debit cards

Wise debit cards are available for Wise account-holders in Canada. A Wise debit card can be used almost everywhere where debit cards are accepted, with the list of unsupported countries including the following:

• Afghanistan
• Burundi
• Central African Republic
• Chad
• Congo,
• Democratic Republic of Congo
• Cuba
• Eritrea
• Iran
• Iraq
• Libya
• North Korea
• Russia
• Somalia
• Sudan
• South Sudan
• Syria
• Venezuela
• Yemen
• Additional countries are not supported for Wise accounts opened in the US or Indonesia.

Wise debit cards can also be used to make online payments. For some online payments, you must approve the payment from the Wise app or by using an SMS or call code.

You can withdraw money with your Wise debit card from most automated teller machiens (ATMs) in most countries, except those specified above. If you got a Wise debit card in Canada or Japan, you will only be able to withdraw money from ATMs located in other countries.

For this reason, those living in Canada should consider other debit and credit card solutions besides the one offered by Wise.

Multicurrency accounts

Wise can be especially helpful to those who need to send and receive frequent international payments in multiple currencies. Wise allows you to hold over 40 currencies and send payments to 160 countries. You can also receive fee-free local transfers in 10 currencies: EUR, USD, GBP, AUD, CAD, NZD, RON, HUF, TRY, and SGD.

Once you have funds in your Wise account, you can switch from one currency to another at any point you want at a given exchange rate. One feature many would find likable is the possibility to create an Auto Conversion. For example, suppose you have money in your USD account, and you believe USD might depreciate in value. In that case, you can schedule Wise to automatically transfer a sum of money from your USD account to your EUR account once the exchange rate reaches a specific value.

Services for business customers

Wise offers several features meant to address the needs of businesses. For example, business accounts can get up to 10 local bank details in 10 currencies and hold, send, and switch between different currencies. These features are helpful to those who want or need to pay international contractors and suppliers in their preferred currency.

Businesses that need to make mass payments can take advantage of Wise’s batch payments option and Wise API. The first can be used to make multiple payments at once through a CVS upload, while the later can be used to set automatic payouts.

Wise fees and exchange rate

Transaction on Wise comes with two fees: fixed and variable. Fixed fees cover the fixed costs per transaction and are usually between $1.75 and $2. Variables fees cover the cost of the currency exchange and vary by currency, usually within the range of 0.5% to 0.6%.

The platform’s exchange rate is a mid-market one, being similar to the exchange right you typically find on currency converter tools. A mid-market exchange rate is a midpoint between the buy and sell prices of two currencies at a specific time.

Banks often add around 3% of markup on top of the mid-market rate, something which Wise doesn’t. As a result, Wise’s exchange rates are usually better than the ones provided by international payment services or banks.

You will not pay any fees for opening a Wise account, getting bank account details for multiple currencies, holding multiple currency accounts, or sending money with the Wise debit card. Fees for most ATM withdrawals, currency conversions, sending payments to other currencies, and receiving payments to your account in the form of USD wire transfers are your responsibility.

You have two free withdrawals for ATMs every month up to a certain amount that varies by country. For example, for Wise cards issued in Canada, you have 2 free monthly withdrawals for the equivalent of 350 CAD.

Is Wise safe?

Wise is perceived as safe, both from a technological and regulatory point of view. From a technological perspective, it’s worth mentioning that Wise transfers are made with a complex technology that includes advanced data protection, HTTPS encryption, fraud prevention systems, and 2-step authentication.

From a regulatory point of view, Wise can be regarded as safe because, in Canada, it is regulated by The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). In addition, leading financial institutions are used to protect customer funds, and the company is regularly audited.  

Wise vs. competitors

Wise competes with traditional banks and also against other payment solutions that can be used to send money abroad, including Western Union and PayPal. It provides cheaper fees compared to its competitors but also supports fewer countries.

Wise vs. banks

Wise has its own payment network and outcompetes traditional banks relying on the SWIFT system by providing cheaper and faster transfers. This is because it poses a network of accounts in different countries, while the SWIFT networks include several banks which pass payments between themselves. It is a process that takes more time and often comes with intermediary fees.

The following table provides a comparison between transfer fees with SWIFT vs. Wise.

Type of fee	International bank (SWIFT) charges	Wise charges
Sending transfer fee	Varies – often ranges from USD 10 to USD 35	0.5% to 2.5 %
Intermediary bank fees	Vary the number of intermediary banks and the fee of each bank involved	None
Exchange rate markup	Yes	Real exchange rate
Recipient transfer fee	Typically ranges from USD 0 to USD 9	None

Wise vs. Western Union

Western Union is probably the best-known company in international money transfers, allowing money transfers in more than 200 countries. Western Union can be used for online transactions and in-cash transfers.

Wise can be considered a better alternative to Western Union, provided that you send money to someone with a bank account that lives in one of the supported countries. While transfers with Western Union are almost instant, the fee for each transfer is at least $4.99, while in the case of Wise, fees start at $2.

In addition, Western Union provides less competitive exchange rates, making money on the margin between the rate it offers to its customers and the mid-market exchange rate.

Western Union is still a good option for international money transfers if you need to send money to someone living in a country not supported by Wise or if the receiver does not have a bank account or only wants to receive cash.

Wise vs WorldRemit

WorldRemit is an international money transfer company that particularly excels in versatility and speed. You can send funds to over 130 countries in over 70 different currencies. WorldRemit offers various payment options including bank account transfers, mobile money, cash pick up, and even mobile airtime top-ups.

While Wise generally offers better exchange rates, WorldRemit wins for speed and flexibility. In most cases, your recipient receives the funds within minutes and many transfers are instant. WorldRemit also serves more countries and supports more currencies than Wise, allowing you to send money to less popular destinations.

However, WorldRemit’s exchange rate tends to be more expensive than Wise and the limit per transfer is quite low and varies by the destination country. Generally, you’re limited to sending $1,000 per transaction. Wise, on the other hand, allows you to send up to $25,000.

WorldRemit is the better option if you need to send money very quickly (like yesterday!) especially for smaller amounts or to locations that are not supported by Wise. Their array of transfer methods adds a layer of convenience that some users may find appealing.

However, you should choose Wise if you need to send a large amount of money and it’s not urgent. You’re more likely to get a better exchange rate if you don’t mind that it will take a little longer for your recipient to receive the funds.

Wise vs. PayPal

Many people considering financial solutions that don’t involve opening a bank account wonder whether they should use Wise or PayPal. It is impossible to advise someone one way or the other because the two payment solutions are only similar in their offering, not identical. This consideration applies to both personal and business accounts.

Wise is, without a doubt, a cheaper solution in most cases of international money transfers. Besides offering lower fees and real-time exchange rates, Wise’s costs are transparent, meaning you will not need to concern yourself with hidden fees. For example, you can see the exact amount the recipient will receive without surprise deductions when it reaches them.

PayPal fees are more complex. Fees for international transfers include a fixed fee and a fee based on the exchange rate. The difference between the exchange rate and the mid-market rate is between 2.5% and 4.5%. On the other hand, transfers between family and friends, when funded from the PayPal balance or bank account, are free.

You will pay a percentage fee when you use a debit or credit card to fund a PayPal transfer. Withdrawing money from your PayPal account to your bank account is free if you initialize a standard transfer. However, an instant transfer will incur a fee in the range 1% to 3%.

Besides offering lower fees than PayPal, Wise also provides a larger number of currencies and higher limits on the amounts you can transfer. Other features that Wise has and PayPal doesn’t include a Visa debit card that is available in all countries that Wise serves and debit card solutions for employees. PayPal, on the other hand, may be a better solution than Wise for e-commerce businesses that want to use PayPal’s payment gateway, as the former does not currently provide one.

Wise vs. OFX

OFX is an international payment and money transfer service that offers a range of features to make money transfers easier and cheaper. Benefits include easy sign-up with 24/7 support, payments in 55+ currencies to over 195 countries, no transfer fees on amounts over $10,000 CAD, and no maximums on transfer amounts.

Unfortunately, OFX does lack personal multi-currency account options, the exchange rates are not transparent and usually include a markup. The rate will vary based on the currency pair and the amount being transferred. Wise uses the real exchange rate but charges transaction fees calculated as a percentage of the amount being transferred.

You cannot fund your OFX account by cash, cheque or debit card. Wise, on the other hand, allows you to fund your Wise account with debit and credit card.

The main difference between OFX and Wise lies in their fee structure. OFX does not charge a transfer fee for transactions over $10,000 CAD. Wise charges between 0.5% and 2.5% to send a transfer. Additionally, with OFX you can set up notifications when your desired rate is reached so you can lock in current rates for future transfers as well as same-day payments if needed.

Wise money transfers usually take 1-2 days, whereas OFX transfers range between 1- 5 business days depending on the type of currency. OFX fees are more likely to be lower than Wise no matter how much you’re sending.

In general, OFX is better for larger transactions due to no transfer fees on transactions over $10k, but Wise uses a low percentage fee that makes it suitable for smaller transactions or regular exchanges at an affordable price.

Ultimately, it depends upon how quickly you need your funds and any additional charges from your receiving bank which should also be taken into consideration when deciding which service to use.

Bottom line: Wise comes with pros and cons

Pros

• Transparent fees
• Speedy transfers (80% within 24 h)
• Multicurrency options
• Features that specifically target business clients

Cons

• Daily and annual payment limits for USD accounts
• Payment options do not include cash or cheque transfers

Wise is arguably one of the best payment network platforms, as it provides a fast, cheap, and safe way of sending money abroad. However, whether Wise is the right money transfer platform for you or not will depend on your needs, especially if you are a business in search of specific payment features.