TransferWise is a private, UK-based peer-to-peer online money transfer company, which launched in 2011. Headquartered in London, the firm offers money transfer services to and from 17 countries, with the ability to send money to an additional nine countries.
TransferWise offers currency transfer services at lower prices than typical bank transfers. Customers can send or receive money from 17 countries and send to another nine countries using the TransferWise platform. The company’s system locks in a favorable exchange rate and customers are charged a flat fee for small amounts, or a percentage of the transfer amount for larger transfers. Fees vary based on where the money is being sent.
TransferWise is able to charge much lower fees than a traditional bank based on how the customer’s payment is routed. Instead of sending the payment directly to the intended recipient, TransferWise’s systems tries to find an equivalent transfer going in the opposite direction and redirect the money to the recipient of that transfer. This process is less expensive because it avoids currency conversion. Where there is no peer who desires the other currency, Transferwise uses a liquidity provider to provider the currency, a cheaper option than typical bank rates.
Fees for TransferWise are based on the transfer amount and the country where the money is being sent. For transfer amounts that are smaller, the fee is a flat charge. For transfers going to certain countries, the fee structure is higher.
Sending money from the United States also has a different fee structure, based partially on the three different methods for transferring money available in the US: ACH bank debit, federal wire, or SWIFT transfer. Using an ACH bank debit, the customer has a per-payment and daily transfer limit of $5,000 USD. It can take up to an additional five working days to transfer the funds using this method. Federal wires charge an additional banking fee, and funds must be sent first to the TransferWise Wells Fargo account in Texas before they are wired. This method does allow for larger transfer amounts, up to $1 million USD. The third method, using a SWIFT account, has higher fees and can take one to five days to settle in the recipient’s account. This method also allows larger transfer amounts of up to $1 million USD. Once an account is set up, customers enter how much they want to transfer, and where they need to transfer to. They must then send the money to TransferWise, either by making a bank transfer or by using a debit card. TransferWise finds an equivalent transfer moving in the opposite direction and converts the currency at the mid-market rate. Once the transfer is complete, the converted currency will be sent to the intended recipient’s account. TransferWise sends an email notifying all parties that the money is available.
TransferWise customers can use their TransferWise account to make business payments overseas. The transaction process works the same as it does for retail transfers, and customers transferring money for business purposes receive the same locked-in foreign exchange rate as they would as a retail customer. Business payments do require documentation attesting to the legality of the business to ensure that money is being transferred legally and within the guidelines set by financial regulatory agencies.
Founded in 2011, TransferWise is a private, UK-based peer-to-peer money transfer company headquartered in London with additional offices in Sweden and the United States. The company offers its currency transfer services to and from 17 countries, with the ability to send money to an additional nine countries. The company is registered as a money service business and is authorized to trade by the Financial Conduct Authority (FCA) in the UK and withFinCEN in the US.
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