TransferWise Review – International Money Transfer Case Study from USD to AUD

The banks are out to get us. I’m seeking ways to fight back. International money transfers are one of the banks little secrets. TransferWise says they can save us. So I tried them. Here is a TransferWise review.

TransferWise Review

Planet Money did a great piece on the invisible financial pipes that move money. This was part of their “t-shirt project.” In it, they talk about the Automated Clearing House (ACH) and what it took to move money from their Kickstarter (e.g. Amazon) to their Chase Bank account. Note: Listen to that podcast. It’s excellent.

In Australia, the banks just offer free money transfers. That’s right. It’s free in Australia with bank apps on your phone. Apps like Cash and Venmo are making it easier in America. Transferwise is the only place doing it internationally right now that I know of.

We’re moving money to Australia this month. We’re going to be testing TransferWise.com to see if we can save ourselves some fees.

A Transferwise Review

A long time ago in a….

TransferWise came across my desk a long time ago in a paid advertisement on Facebook. I clicked through, but didn’t need to move money at the time. After bookmarking the page, I was excited for the opportunity when I would need to move a good amount of money internationally.

November 20th, 2015

Today was that day I found a need to move money from the USA to Australia.

The Transferwise steps were easy to follow. They have a pretty good UI on the surface, but it wasn’t perfect…

I noticed some strange glitches in their software. At one point, it seemed as if I saw someone else’s screen before it flashed back to my screen. Very strange and disconcerting when you’re moving large amounts of money. This happened a few times. It’s a glitchy user experience.

By the way, I’m moving about $4,300 USD from a CapitalOne account to a Commonwealth Bank account. To clarify, thats a United States savings account to an Australian checking account.

I was able to generate a code on the CapitalOne online banking login and use that code to authorize the transfer with the TransferWise.

To my dismay, I learned that the transfer will take 1-5 business days from CapitalOne to TransferWise. Also, my Australian bank will also require 2-3 business days for the money to clear in that account. So 3-8 days in total to move some digits across a line.

Ahhh the wonders of the modern financial system.

Anyways, I clicked transfer and the deal is in action.

As I go back to the site to check the status of the transfer, they have this cryptic page that doesn’t tell me information about fees. I’m unsure of the fee schedule. I can ascertain the conversion rate because they tell me the amount I’m transferring in USD and what we will receive in AUD:

  • $4,300 USD/$5,923 AUD = Which equals a rate of .725 AUD/USD
  • .72 AUD/USD is the mid-market rate as reported by Google

Testing Transferwise vs Midmarket Rate

So it looks great.

I’m in it now. I’ll wait 1-5 business days for CapitalOne to release the money to TransferWise. Then I’ll wait for however long it takes for the money to move through TransferWise to CommonWealth bank. Finally, I’ll wait 2-3 business days for CommonWealth to clear the funds on their end.

 

November 24th, 2015

Four days have passed.

The transfer has come through. It all cleared. Here is a screen shot of what I’m seeing via the dashboard of the Transferwise website:

Transferwise Screenshot for Case Study
I’ve blacked out my wife’s name. Nothing more.

Transferwise (as per the screenshot above) tells me that the transfer was completed for $5,923.79 AUD.

Commonwealth Bank Transaction Details

 

The amount shown in Commonwealth bank is $5,923.79 AUD.

The deal went through. They transferred what they said they would! Huzzah!

Deconstructing the International Money Transfer via TransferWise

This is the actual rate we experienced transferring from CapitalOne in the United States to the Commonwealth Bank in Australia:

$4,300 USD / $5,923.79 AUD = $.72588 USD/AUD

The mid-market exchange rate from Yahoo Finance saw a low of $0.7187 AUD/USD and a high of $0.7216 AUD/USD the day of the transfer. Here is a screenshot:

Transferwise review Mid-market rate vs actual transfer rate

So depending on the time of transfer, that $4,300 USD would have exchanged at a low of $5,983.03 AUD to a high of $5,958.98 AUD.

Here is a table describing the actual mid-market rate vs. realized exchange rate from the transfer:

The Day’s Price Point Mid-market rate at $4.3k USD Realized from Transfer Amount Unaccounted for in Transfer
When Market was Low  $5,983.03 AUD $6,023.25 AUD  $40.22 AUD
When Market was High  $5,958.98 AUD $6,023.25 AUD  $63.27 AUD

So the real cost of the money transfer was between $40-64 AUD (or $28-46 USD).

Free. Nope. Better than the banks? Good question.

November 24th, 2015 (Later that Night)

I received a receipt clearing some stuff up. This was my mistake. I get way too much Email and this was buried in the fray.

Here is a screenshot of it:

TransferWise Review - Final Receipt
I’ve blacked out my wife’s Email. Nothing more.

Conclusion

My guess is that the banks would offer a less attractive rate and also tag on a boatload of fees.

Transferwise did work. The ordering process was easier than going into the bank and talking to a teller. I will use it again next time I transfer money internationally.

Finally, they gave me a coupon code. If you want to use it, you could wire your first 3,000 GBP (roughly $4,500 USD) for free. If I had this code when I made the transfer, I would have actually realized the mid-market rate.

Here is the coupon code. I don’t think I get any benefit from you using this code so don’t think this is some affiliate deal and I wrote this article just to send you to TransferWise.

I wrote this article because I think international business needs to be cheaper, faster and more modern.

For future readers, if the above code doesn’t work, please let me know in the comments and I’ll remove it for future visitors.

Updated November 20th, 2015 – Gold Coast, Australia

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