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Transferwise: foreign exchange transfers and payments

Technology, Travel — July 2018

Transferwise was originally a foreign exchange transfer service, but for some time it has offered a "Borderless" account — with sterling, Australian dollar, US dollar and Euro bank accounts as well as the ability to hold balances in two dozen other currencies — and now a debit card attached to that account.

My original use of Transferwise was for bank-to-bank foreign exchange transfers, and for that I highly recommend it. They have a straightforward and easy to use web site (and an app), and their fees are simple and transparent, as well as being consistently lower than anything I've found elsewhere. For AUD to GBP, for example, they currently (June 2018) charge $1 + 0.5% and for GBP to EUR it's 80p + 0.35%. After those fees, the actual transfer is done at the mid-market rates, so there's no fee hidden in a terrible exchange rate. (Sending or receiving, my high street banks take a 4% or so margin on foreign currency transfers, on top of a fixed fee.)

Revolut offers up to £5000 a month of currency exchanges with no fee at all, also at the mid-market rate. But for sums larger than that Revolut can be more expensive than Transferwise, and it doesn't support direct transfers from Australian bank accounts.

The Halifax Clarity card offers native Mastercard rates which are similar to Transferwise. I don't think they offer the multi-currency bank accounts, though.

Transferwise's "Borderless" account by itself wasn't so useful to me, though it would have allowed me to make or accept payments by bank transfer in the United States and the Eurozone, as well as in the United Kingdom and Australia. (Unfortunately Amazon won't pay my associate fees into this account, since they only do bank transfers for US residents, and I still have to deal with cheques there.)

The "Hello World" debit card attached to the account makes it much more useful, however. This allows me to pay for my US-based web hosting, and the occasional purchase from US or European retailers, without bank fees and with Transferwise's excellent foreign exchange rates. I have also linked that debit card to my Paypal account and found the hidden-away setting that stops Paypal doing their own extortionately expensive foreign exchange conversions.

The debit card is also really useful when travelling. I've used it to pay for goods and services in Euros, US dollars, Singapore dollars, and Hong Kong dollars, all drawing on native currency balances in my Borderless account and without fees (though I had to pay fees as above to create those balances). And the internal conversion fees don't have fixed elements, so small transactions are not a concern. For a stopover in Singapore airport, for example, I created a balance of 50 Singapore dollars, for a fee of 23c, but then ran over that by SGD $7.40 — for which there was just a 3c fee! In contrast, even the "travel card" offerings from my high street banks take foreign exchange commissions of 3% or more, even if they drop the fixed "foreign transaction fees". (One drawback to the Borderless account is that it's not possible to specify which balance transactions with no or zero balance are to be converted from — it defaults to the one with the lowest fees, which is not necessarily what one wants.)

There is a £200/month allowance for free cash machine withdrawals and a 2% fee after that, which could be frustrating (2% suddenly feels like a lot given how low the other fees are). But this just means that now paying by card is cheaper than paying by cash instead of the other way around. I've managed to withdraw Australian dollars and Hong Kong dollars and Euros from cash machines without any problems, though of course sometimes (notably in Australia) the cash machine operator charges a fee.

Transferwise doesn't offer multiple accounts in the same currency, tools for budgeting, simple payments to other people, and suchlike. Indeed their only reporting consists of a single "activity stream" across the entire account. So they are not competing with Bunq or Monzo or the other companies attempting to take on everyday banking ("TransferWise co-founder and Chairman Taavet Hinrikus has always insisted that the Borderless account is designed to work as a companion product to your main current account and not a fully fledged bank replacement"), or with Paypal or Apple Pay and other payment systems. They also won't provide you with physical cash, if you're one of those people who like to have some physical currency on arrival in a foreign country (for this I've previously used Travel FX).

Anyone doing foreign exchange transfers should consider Transferwise, if only because they provide consistent, low and transparent fees. Anyone operating a multi-currency business should consider the Borderless account (especially if they use GBP/EUR/USD/AUD). And the debit card makes for an easy and economical travel card solution.

These kinds of FinTech services are going to destroy most of the easy profits banks are making at the moment on foreign exchange transactions.


  • Security issues are not discussed in this memo.
  • This is not financial advice.


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