What is Wise (formerly TransferWise)?
Wise is a financial technology company that offers a money transfer platform for individuals to send, receive, and spend money internationally.
It’s notable for its low and transparent fees, lack of markup on exchange rates, and flexible multi-currency accounts.
In January 2011, Wise (previously TransferWise) was founded in London, England and processed over €10 million worth of transactions during its first year.
The company quickly grew its customer base over the next few years, handling over £1 billion in monthly transactions by 2017.
On February 22, 2021, the company officially rebranded as Wise.
Subsequently, it went public on July 7, 2021 on the London Stock Exchange.
Today, Wise serves over 11 million customers and processes more than 6 billion worth of transactions each month.
It operates out of 17 branches worldwide and employs more than 2,700 people.
How Does Wise Work?
Wise’s platform lets you send money overseas at cheaper rates than those offered by banks, as any money sent and received doesn’t cross borders.
The company has bank accounts scattered across the globe, which they utilize to process each transfer.
For example, let’s say you decide to send 1,500 CAD to a family member living in the United States.
The Canadian funds are sent directly to Wise’s Canadian dollar bank account when you initiate the transfer.
From there, your recipient receives the payment from Wise’s American dollar bank account.
This localized approach to money transfer enables wise to keep their costs low, which, in turn, translates to lower fees for customers.
Creating An Account
Opening an account with Wise is straightforward and convenient.
Below are the steps:
- Register. Create an account through the Wise website or their mobile app. You’ll need to enter some basic details, including your address, date of birth, occupation, and phone number,
- Set up the transfer amount. Enter the amount you wish to transfer and the currency to use. Wise automatically calculates your total fee and the date the funds will arrive in your recipient’s bank account.
- Verify your identity. Before completing your first transfer, Wise needs to confirm your identity. You’ll need to upload two pieces of government-issued photo ID. Wise can take up to two days to complete the verification process.
- Provide information on the recipient. Enter details about your recipient, including their name, address, and bank account.
- Pay for your transfer. You can fund your transfer using direct debit (bank transfer), credit card, debit card, wire transfer, and bill payment.
If you’re a Quebec resident, you’ll need to provide Wise with three documents to confirm your identity.
As with any money transfer service, Wise limits the amount you can send from Canada:
- $9,500 CAD per day and $30,000 bi-weekly by direct debit
- $3,000 CAD per transfer by debit or credit card
- $1.5 million per wire transfer and online bill payment for business accounts
The transfer speed depends on the payment method you choose and the destination of the transfer.
When using direct debit or online bill payment, it typically takes 1 – 3 days for your money to reach wise.
Once your funds arrive in the Wise bank account, it’s converted to the appropriate currency and then sent out to your recipient, which can take 2 – 6 days.
The fastest option is to use a credit or debit card, enabling an instant transfer that can be completed in just a few seconds.
Did You Know?
You can pay for your transfer with Apply Pay or Google Pay if you use the Wise app.
Can I Send Money Internationally with Wise?
Wise allows you to send money to nearly 80 countries from anywhere in Canada.
While this number is not as high as some other money transfer service providers, Wise is constantly expanding its list of destinations.
For example, Peru, Namibia, and Serbia are currently on a waiting list, which you can sign up for.
Depending on your recipient’s destination, you could be subject to payment method restrictions, so be sure to read the instructions associated with the specific country.
Wise’s transfer fees include three components:
- Transfer fee. This consists of a small, fixed fee, plus a percentage of the transfer amount. It varies according to your currency and your recipient’s currency, but usually amounts to less than 1% of the total transfer.
- Payment Method. These fees vary depending on which method you use to fund your transaction. A bank transfer, for example, is cheaper than a credit card.
- Exchange Rate. Wise provides you with the mid-market rate on currency conversions, free of any markup or surcharge. The mid-market rate is the rate banks utilize when they conduct currency transactions. It’s considered the fairest, accurate, and most transparent rate.
Below is an example of a fee breakdown using Wise’s online pricing calculator on December 23, 2021.
Here, we assume we’re sending $2,000 CAD to France:
|Payment Fee||Wise Transfer Fee||Total Fee|
|Direct debit (bank transfer)||$4.99||$11.00||$15.99|
Wise usually guarantees your exchange rate for 2 to 48 hours.
Is Wise Safe?
There’s no doubt that security is a primary concern for anyone conducting money transfers online.
Luckily, Wise is subject to strict regulatory oversight and employs sophisticated technology and security protocols to safeguard your money and personal data.
In Canada, Wise is registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as a Money Service Business (MSB).
This agency is responsible for deterring and investigating illegal financial activities, such as money laundering.
As a Wise customer, you can enable two-factor authentication on your account, making it much harder for an unauthorized individual to gain access to your data.
Wise also employs a fraud team working 24/7 that monitors for suspicious activity.
Additionally, the company performs periodic vulnerability scans, and hires external auditors to uncover security flaws.
Pros of Using Wise
1. Cheap transfer fees
Wise’s key selling point is the noticeably low fees it charges on international money transfers compared with traditional banks.
As mentioned previously, Wise charges a transfer of less than 1% on most transactions and executes your currency conversions at the mid-market rate, which means no markup or hidden fees.
2. Transparent fee details
One of Wise’s fundamental business principles is providing customers with complete transparency regarding the details of their transactions.
When you set up your money transfer, you always know your total fees, exchange rate, and transfer delivery date upfront.
3. Multi-currency account
One of Wise’s unique features is its multi-currency account, which allows you to store funds in over 50 currencies.
You can convert funds to different currencies within this account freely at the mid-market exchange rate and pay only a small fee per transaction.
4. Advanced mobile app
Wise offers a flexible mobile app that you can download from the Google Play and Apple App stores.
Using the app, you can set up repeat transfers, lock in an exchange rate, and conduct transfers using Apple Pay and Google Pay.
Cons of Using Wise
There are strict limits on how much you can transfer, based on your payment method and the country you’re sending money to and from.
To determine your transfer limit, you can visit the Wise’s Currencies page in their Help Centre and look up your currency of choice.
2. No cash pickups
Wise doesn’t provide you with the option to arrange a cash pickup or delivery of transferred funds.
Consequently, your recipient must have a bank account to receive your transfer.
Conversely, many industry competitors like Xoom, Western Union, and MoneyGram offer this service.
3. Slow transfer speed
While you can complete debit and credit card transfers virtually instantaneously, other payment methods can take several days to a week.
These delays stem from Wise’s multi-step transfer process, which requires the company to receive the funds, convert them, and send it to your recipient.
What is the Wise Multi-Currency Account?
Wise offers a multi-currency account that allows you to send, receive, and store money in over 50 currencies.
It’s a valuable feature if you conduct numerous transactions globally since you don’t have to open and maintain a separate account for each type.
You also avoid having to convert between currencies regularly.
There are no fees to pay to use this account.
You can convert your money to different currencies if needed at the mid-market rate, paying only a small upfront fee per transaction.
While you can hold money in a wide range of currencies, you can only add money in a select few (19+).
Here’s a list of which ones you can’t directly add to your multi-currency account.
For these, you must convert to them instead.
What is the Wise Card?
Wise offers a prepaid Visa debit card as a complement to its multi-currency account service.
It enables you to spend money you hold in your account worldwide at a location that accepts Visa.
Initially, the Wise card was available to customers in only a select few countries, but recently launched in Canada on November 30, 2021.
As with Wise’s multi-currency account, the card allows you to spend in the currency of your choice while keeping transaction and exchange rate fees at bay.
Here are some of its notable features:
- Available for use in over 200 countries
- Make payments in over 150 currencies
- Integration with Apple Pay and Google Pay
- No foreign transaction fees
- Currency conversion technology that automatically selects the most favourable conversion rate
- Access local bank account details for ten currencies, which you can use to send, store, and receive funds in over 50 currencies
The low transfer fees and currency conversion at the mid-market rate make Wise stand out among the competition.
Its transparency is also commendable, as you know what you’re going to pay upfront.
These qualities will appeal to those looking to keep their costs low when sending money abroad.
Wise’s multi-currency account and prepaid Visa debit card would be attractive to those who regularly conduct international transactions, such as business owners and freelancers.
The Wise debit card also makes overseas spending convenient and cheap for travellers.
Wise’s other strong points include its versatile mobile app, stellar customer service, and various payment methods available to fund transfers.
Still, there are some drawbacks to consider.
Transfer limits can sometimes be tedious if you utilize slower payment methods.
There are also strict limits on how much you can send, and the list of countries is smaller compared with some other money transfer service providers.
Overall, Wise is a solid choice if you’re looking for a convenient, reliable, flexible, and low-cost money transfer service.
Frequently Asked Questions
- Is Wise (TransferWise) safe for large amounts?
Yes. Wise can facilitate large transfers safely and efficiently.
The company complies with FINTRAC regulations and stores your money in large, well-established financial institutions, separate from its internal business accounts. It employs a team of fraud specialists to monitor for irregularities continuously and hires outside auditors to assess system vulnerabilities.
Also, 2-factor authentication adds an extra layer of protection to your data.
Depending on the size and nature of your transfer, Wise will ask you to provide additional documentation and information before authorizing the transaction.
- Can I use Wise without a bank account?
Depending on your choice of payment method, you may or may not need a bank account to send money through Wise.
For example, if you’re going to fund the transfer using a credit card, you don’t need to link your bank account. However, suppose you’re sending money via direct debit or wire transfer. In that case, a bank account is a requirement to process the transfer.
- Is Wise a bank?
No. Wise isn’t a bank – it’s registered as a Money Service Business (MSB) in Canada. Wise’s services facilitate the transfer of funds between bank accounts.
A Wise account doesn’t qualify as a bank account. As a result, your money is not protected by the Canadian Deposit Insurance Corporation (CDIC). You also don’t have overdraft protection, and your funds don’t earn interest.