How Does TransferWise Send Money? A Complete Guide to Fast and Affordable Transfers

Sending money internationally used to be a hassle—hidden fees, confusing exchange rates, and long wait times. I’ve been there, frustrated by the lack of transparency and the steep costs. That’s where TransferWise, now known as Wise, comes in, offering a faster, cheaper, and more straightforward way to move money across borders.

What makes Wise different? It doesn’t rely on the traditional banking system to transfer funds. Instead, it uses a smart, innovative approach that cuts out unnecessary middlemen, saving you time and money. If you’ve ever wondered how Wise works its magic, you’re not alone. Let me break it down for you.

What Is TransferWise?

TransferWise, now known as Wise, is a financial technology company that facilitates international money transfers. It provides an alternative to traditional banking systems, focusing on cost-effective, transparent, and speedy transactions. Founded in 2011, Wise uses a peer-to-peer system to simplify cross-border payments.

This platform operates by matching users sending money in one currency with users wanting to receive money in the same currency. By avoiding currency exchange through traditional bank networks, Wise minimizes costs and ensures fair mid-market exchange rates. Its services cater to both individuals and businesses, supporting over 50 currencies globally.

How Does TransferWise Send Money?

Wise, formerly TransferWise, uses an innovative method to facilitate international transfers. By leveraging technology and local banking networks, it ensures fast, cost-effective, and transparent transactions.

Understanding The Mid-Market Exchange Rate

Wise aligns all currency conversions with the mid-market exchange rate. This rate, the midpoint between the buy and sell prices on global markets, reflects the most accurate currency value. Unlike traditional banks, Wise applies no hidden markups to this rate, ensuring fair pricing for every customer.

Role Of TransferWise’s Local Bank Accounts

Wise operates through a network of local bank accounts worldwide. When a sender initiates a transfer, funds are deposited into Wise’s domestic account in their country. Simultaneously, Wise pays the recipient from its local account in the destination country, avoiding the need for costly international transfers. This localized process reduces fees and eliminates intermediary charges.

Using TransferWise Borderless Accounts

The Wise Borderless Account simplifies global money management. Users can hold and exchange over 50 currencies and access local bank details for multiple countries, including the US, UK, and EU. This account enables seamless cross-border transactions without requiring setup in foreign banking systems. Businesses and freelancers frequently use this solution to streamline international payments.

Benefits Of Using TransferWise

Using Wise offers multiple advantages for sending money internationally, combining speed, cost-effectiveness, and transparency with cutting-edge technology.

Speed And Transparency

Wise processes international transfers faster than traditional banks by leveraging local banking networks. Funds are deposited into a local account in the sender’s country and paid out from a local account in the recipient’s country. This method avoids delays caused by intermediary banks. Tracking tools within the Wise app provide real-time updates, keeping senders and recipients informed about the transaction’s status at all times.

Competitive Exchange Rates

Wise provides mid-market exchange rates, which are free from hidden markups or inflated pricing. Unlike banks and other services with opaque fee structures, Wise shows the exact cost upfront, including a small, transparent service fee. By aligning the rate with the real-time market value, Wise ensures users save money on currency conversion.

A Step-By-Step Guide To Sending Money With TransferWise

Using Wise to send money internationally is simple and efficient. Follow these steps to complete your transfer securely and transparently.

Setting Up Your Account

I register for a Wise account through their website or mobile app. The process involves providing an email address, setting up a secure password, and verifying my identity using a government-issued ID. Once verified, I can access the full suite of Wise services, including international transfers and multi-currency accounts.

Inputting Your Transfer Details

I start a transfer by entering the amount and selecting the currencies for the transaction. Wise displays the total cost, the mid-market exchange rate, and the recipient’s expected amount upfront. Next, I input the recipient’s bank account information, such as their full name, account number, and, if required, SWIFT/BIC codes. Wise ensures that all details are securely handled to protect sensitive data.

Sending The Money

I fund the transfer using my preferred payment method, whether it’s a bank transfer, debit card, or credit card, depending on availability in my country. Wise processes the payment quickly by using local banking networks. For example, if I’m sending dollars to euros, Wise transfers the amount within local US accounts and pays the recipient from a local EU account. I then track my transfer through real-time notifications via the Wise app or website.

Security Measures In Place

Wise implements advanced measures to ensure the security of users’ funds and data. It complies with regulatory requirements in every jurisdiction where it operates, maintaining licenses from global financial authorities such as the Financial Conduct Authority (FCA) in the UK and FinCEN in the US.

Encryption safeguards all transactions, protecting sensitive information from unauthorized access. Data is stored and transmitted securely using industry-standard 256-bit TLS encryption, preventing interception or tampering.

Two-factor authentication (2FA) adds an extra layer of protection to user accounts. This requires users to verify their identity through a second step, such as a unique code sent to their phone, before accessing their account or authorizing transactions.

Active monitoring systems detect and prevent fraudulent activities. Wise employs machine learning algorithms to analyze transactional patterns, flagging suspicious behavior for investigation by dedicated security teams.

Customer funds are stored separately from operational accounts. Wise holds these funds in established financial institutions, ensuring they remain safe and accessible even if Wise experiences financial difficulties.

Rigorous identity verification prevents unauthorized access and fraud. Users complete Know Your Customer (KYC) checks when signing up or making large transfers, ensuring compliance with anti-money laundering (AML) regulations.

These layered security measures align Wise’s platform with global safety standards, ensuring user confidence in secure transactions.

Comparison With Traditional Banks

Traditional banks rely on SWIFT systems and intermediary institutions for international transfers, often leading to high fees and delays. These banks typically charge fixed fees, additional costs for currency conversion, and hidden markups on exchange rates. Processing times can range from 3 to 7 business days.

Wise, by comparison, eliminates intermediaries using a local banking network. When I transfer money through Wise, it matches funds domestically on both ends, avoiding international transfer fees. The upfront pricing includes a small, transparent service fee, ensuring no unexpected costs. Using mid-market exchange rates, Wise saves up to 8x compared to bank rates.

Tracking is another advantage. Traditional banks often provide limited updates, while Wise offers real-time tracking via its user-friendly app. This transparency ensures I stay informed about transfer status from start to completion.

Speed is a differentiator. Wise processes most transfers within 1-2 business days, significantly faster than banks due to their reliance on outdated financial systems. The efficiency enhances customer experience for both personal and business transactions.

Finally, banking security systems rely on legacy technologies, while Wise uses encryption, 2FA, and advanced fraud detection tools to protect transactions. Wise’s compliance with global financial authorities strengthens its reliability for secure international transfers.

Conclusion

Wise has transformed the way we send money internationally by offering a faster, more affordable, and transparent alternative to traditional banking. Its innovative use of technology and local banking networks ensures efficient transfers without hidden fees or unfair exchange rates. With a commitment to security and simplicity, Wise empowers individuals and businesses to manage global payments confidently. Whether you’re sending money to loved ones or handling international transactions for work, Wise provides a reliable and user-friendly solution that saves both time and money.

Frequently Asked Questions

What is Wise, and how does it work?

Wise (formerly TransferWise) is a financial technology platform that offers fast, cheap, and transparent international money transfers. It uses a local banking system to transfer funds domestically in each country, avoiding high fees and delays. Wise matches users sending and receiving money in the same currency, ensuring lower costs and fair, mid-market exchange rates with no hidden markups.

How is Wise different from traditional banks?

Unlike banks that rely on the SWIFT system and intermediaries, Wise eliminates the middlemen by leveraging local banking networks. This reduces fees, speeds up transactions (1-2 business days), and provides transparent pricing with real-time tracking of transfers via its app.

What currencies does Wise support?

Wise supports over 50 currencies globally, enabling users to send, receive, and hold multiple currencies. This makes it an excellent option for individuals and businesses managing money across borders.

How does Wise ensure secure transactions?

Wise complies with strict regulatory requirements and uses advanced security measures like encryption, two-factor authentication (2FA), and fraud detection algorithms. Customer funds are safeguarded in separate, secure accounts, ensuring safety and reliability for every transaction.

Is Wise cheaper than traditional banks for international transfers?

Yes, Wise is significantly cheaper than traditional banks. By offering mid-market exchange rates and a small, transparent service fee, users can save up to 8 times compared to typical bank rates.

How do I send money internationally with Wise?

First, create a Wise account by registering on the website or app and verifying your identity. Then, input the transfer details, including the amount and currencies, and fund the transfer using your preferred payment method. Track your transfer in real-time via the Wise app or website.

What is the Wise Borderless Account?

The Wise Borderless Account allows users to hold, exchange, and manage multiple currencies. It provides local bank details in various countries, making it ideal for freelancers, businesses, and travelers managing international payments.

How long does an international transfer with Wise take?

Most Wise transfers are completed within 1-2 business days. The exact timing depends on factors like payment method, recipient bank processing times, and currency pair.

Are there hidden fees when using Wise?

No, Wise is fully transparent about its fees. Users see the exact costs upfront, including a small service fee and the mid-market exchange rate, ensuring no surprises with hidden charges.

Can I track my international transfers with Wise?

Yes, Wise provides real-time tracking for all transfers through its app or website. You’ll receive updates on the status of your transaction at every step, ensuring transparency and peace of mind.