After having used TransferWise for 5+ years, I get asked a lot whether I recommend it. In this period of time, I’ve seen a lot of freelancers and companies that I work with use TransferWise.
Depending on the country of citizenship and residency that you open TransferWise with will determine which currencies in which you can open a virtual bank account. I’ve noticed that in some accounts, I’m allowed to open a USD account but in others, I can’t.
This is an important detail because if the purpose of you opening a TransferWise account is to sell on Amazon.com (i.e. Amazon USA), then it’s not going to be of any use to you since you need to have a USD account with account number and routing code. If you’re in this situation, then you can try opening with a company account first and failing that, open a personal account instead and see whether the currency you’re after becomes available.
You are allowed to have multiple TransferWise accounts but you have to ask for permission first.
The Good
The thing I love about TransferWise is that it’s super easy to open an account (whereas Revolut makes you jump through a lot of hoops as part of their due diligence despite the fact that they’re also a virtual bank). Having flown around the world just to try and open a bank account and having spent days filling out paperwork, this is a game changer in terms of time spent (it’d usually take me half a day to a day to open an account plus the travel time) and money spent (travel and accommodation costs).
It literally takes just 5-10 minutes to have everything set up and you can do it from anywhere in the world. I suspect that this will probably change at some point in the future once regulations catch up or there’s some scandal that’ll cause TransferWise to tighten up.
There’s no fee to open nor to maintain. Everything is free for the most part.
The smartphone app is nice and user friendly. You can configure the important options.
If you use TransferWise for your business, you can also integrate it directly with Xero.
And of course, you get better foreign exchange rates than the bank and you don’t get charged a hefty conversion fee. Compared with other pure money transfer companies, I don’t think TransferWise is as competitive as it use to be. But you get a lot of other conveniences that make it worthwhile.
The Bad
The way to look at TransferWise is to imagine it as something like Amazon. They write the rules and your money is at their mercy. If they decide to suspend you, there’s not much that you can do and they’ll keep your money locked up too. Like Amazon, as long as you play nice, then generally you’ll be okay.
The other thing is very mixed customer service. For any difficult issues, they can take days to reply. Also, apparently each new message you send adds it to the bottom of the queue so it’s better just to wait for a reply. This includes issues around payment fraud. The good thing with most large and established banks is that it’s relatively easy to make a claim. With TransferWise, it’s a pretty bad process and probably something they’re still working out.
Verdict
Overall, I’d say that TransferWise is a good in between option. I’d say it still makes sense to have a traditional bank account and have TransferWise in between. You can have TransferWise receive the money but don’t keep the bulk of your money there in case you run into any major problems. If you have any urgent need, TransferWise will, just like Amazon, take their sweet time. But you most likely won’t have any major issues and in which case, TransferWise is a good solution.
I also compare Transferwise with Revolut here.