15 Alternatives to TransferWise

transferwise alternatives

Article summary:
15 alternatives comparison table
What are hidden currency exchange fees?
How does TransferWise Work?
What do we use for international transfers?

TransferWise is a relatively new transfer company that is funded by Sir Richard Branson in the UK and has been taking the world by storm. Most services have a hidden currency conversion fee; however, TransferWise has a fixed declared fee that is usually between 0.5-1% of the transfer.

Let’s check out some Transferwise alternatives below:

AlternativeHidden Conversion Fee*Benefits compared with TransferWise
Ria Money Transfer0.3-1%Recipient can get the money in cash; however, this is mostly for sending from the US
OFX0.5-1%Fees can be lower for large transactions and some currency pairs
Western Union1-3%Can pay via credit card and receive the money in cash
Payoneer1-3%They have a debit card where the recipient can receive money from an ATM
PayPal2.5-4%Convenient
MoneyGram1-3%Recipient can get the money in cash
Banks1-5%
Xoom0-5-1%
WorldRemit1.5-2%
CurrencyFair0-0.5%They have a marketplace that allows you to trade directly with other participants so the overall fee can be lower than other options especially for large amounts
Transfast1-2%
OrbitRemit1-2%
Paysera1-2%
Skrill5%
Travelex10-20%
  • The hidden currency fee varies a lot for each currency pair, so this is really a rough estimate. Also note, several of the services listed above do declare the fee, so it’s not exactly a hidden fee. However, even for services that do declare the fee, it is not always easy to find or understand.
  • There are many more options that are available for specific currency pairs and are not listed above.

What are hidden currency exchange fees?

Most transfer services and banks charge a hidden fee when transferring money between currencies. This is a fee but they mostly do not declare it, so it’s a hidden fee. Let’s check out a specific example:

As of the date of writing this blog post, the rate on Western Union for transferring US dollars to Indian Rupees is 67.336

The true rate (called the interbank rate) is 68.1775

You can see this on a site like Bloomberg.

The difference between these two rates is 1.2%. So, in this case, Western Union is taking a 1.2% hidden currency conversion rate fee on this currency pair.

Unfortunately, this makes it very difficult to compare currency conversion services because they do not declare the hidden fee in most cases.

How does TransferWise work?

With TransferWise, you make a local bank transfer to TransferWise, they exchange currencies, then they make a local transfer to the recipient on the other side. This means, for example, that you cannot pay with your credit card for the service. Why not? If you pay via credit card, it costs at least 1% in fees, a fee that TransferWise is going to have to pass on to you. This service is trying to reduce the fees as much as possible so charging you for Credit Card fees would increase the rate of the service.

You can currently use TransferWise to transfer FROM the following currencies:

Euro, Pounds Sterling, US dollars, Australian dollars, Swiss Franc, Canadian Dollars, Polish Zlaty, Swedish Krona, Norwegian Krone, Danish Krone, Hungarian Florint, Czech Koruna, Bulgarian Lev, Romanian Leu, New Zealand Dollars, Japanese Yen, Brazilian Real, Singapore Dollars.

TransferWise can SEND to all of the above currencies and the following additional currencies:

Indian Rupee, Hong Kong Dollars, Malaysian Ringgit, Philippine Peso, Pakistani Rupee, Moroccan Dirham, Thai Baht, Emirati Dirham, Ukrainian Hryvna, Indonesian Rupiah, Colombian Peso, Georgian Lari, Turkish Lira, Mexican Peso, and South African Rand.

What do we use in our company for international transfers?

We have over 60 contractors in 18 different countries, so we have a real need for international transfers. We basically use two different services:

  • TransferWise – yes, we use TransferWise also in-house because we find it one of the lowest cost methods available. Their system is based on local bank account transfers, which makes transfers abroad cheaper than what banks or other providers charge. They charge a small upfront fee between 0.5% and 2% for transactions, depending on the route.
  • Payoneer – this is the most convenient method we have for sending and receiving to multiple countries. This service also offers users the ability to withdraw money on a debit card at an ATM. This is very different from the way that TransferWise works where the recipient must receive money via their local bank account.

Leave a reply