Using Wise For International Money Transfers

Quick answer

• Wise (formerly TransferWise) is a popular online platform for sending money abroad.
• It typically offers better exchange rates and lower fees than traditional banks.
• You can send money using your bank account, debit card, or credit card.
• Wise allows you to receive money in multiple currencies as well.
• Setting up an account and making a transfer is generally straightforward.
• Always compare the final amount received with other services before committing.

Who this is for

• Individuals who frequently send money to friends, family, or businesses overseas.
• People looking for a more cost-effective alternative to traditional bank wire transfers.
• Those who need to manage money in different currencies or receive international payments.

What to check first (before you act)

Your Goal and Timeline

What is the purpose of this transfer? Is it a one-time payment for a purchase, regular support for family, or a business transaction? Knowing your goal helps you determine the urgency and whether you need a simple transfer or a more complex multi-currency solution. Your timeline dictates how much time you have to research options and complete the transfer without incurring rush fees or dealing with delays.

Current Cash Flow

Understand your current financial situation. Can you afford to send the money now without impacting your essential expenses or savings goals? Review your income, outgoing bills, and discretionary spending to ensure the transfer fits comfortably within your budget. This prevents overspending and potential financial strain.

Emergency Fund or Safety Buffer

Do you have an adequate emergency fund? Before sending money internationally, especially large sums, ensure you have 3-6 months of living expenses saved in an easily accessible account. This buffer protects you from unexpected events like job loss or medical emergencies, so you don’t have to tap into funds intended for international transfers or, worse, go into debt.

Debt and Interest Rates

Are you carrying high-interest debt? Prioritize paying down debts with high Annual Percentage Rates (APRs) before making non-essential international transfers. The interest you pay on debt often outweighs any savings you might achieve on an international transfer. Check the APRs on your credit cards, personal loans, and other debts.

Credit Impact

While using Wise itself doesn’t directly impact your credit score, how you fund the transfer can. Using a credit card might incur cash advance fees and interest from your card issuer, which can indirectly affect your credit utilization ratio if not managed carefully. Ensure you understand the terms of your payment method.

Step-by-step (simple workflow)

1. Sign Up for a Wise Account

• What to do: Visit the Wise website or download their mobile app and follow the prompts to create an account. You’ll need to provide personal information, including your name, address, date of birth, and email.
• What “good” looks like: A confirmed account with verified email and phone number, ready for you to log in.
• A common mistake and how to avoid it: Using an incorrect email address or misspelling your name. This can lead to verification issues and delays. Double-check all information before submitting.

2. Verify Your Identity

• What to do: Wise will require you to verify your identity for security and regulatory compliance. This usually involves uploading a photo of a government-issued ID (like a driver’s license or passport) and possibly a proof of address document.
• What “good” looks like: Your account is fully verified, allowing you to send larger amounts and access all features.
• A common mistake and how to avoid it: Submitting blurry or unreadable documents, or documents that have expired. Ensure your photos are clear, all four corners are visible, and the document is current.

3. Select “Send Money”

• What to do: Once logged in, navigate to the “Send money” or similar option on the Wise platform.
• What “good” looks like: You are taken to the transfer initiation screen.
• A common mistake and how to avoid it: Accidentally clicking on a different option, like “Receive money,” if your goal is to send. Read the on-screen prompts carefully.

4. Enter Transfer Details

• What to do: Specify the amount you want to send, the currency you’re sending from, and the currency you want the recipient to receive.
• What “good” looks like: The platform accurately reflects the currencies and amounts you intend to exchange.
• A common mistake and how to avoid it: Swapping the “from” and “to” currencies. For example, intending to send USD to EUR but entering EUR to USD. Always confirm the direction of the transfer.

5. Enter Recipient Information

• What to do: Provide the recipient’s full name, bank name, account number, and any other required details specific to their country and bank (e.g., SWIFT/BIC code, IBAN).
• What “good” looks like: All recipient details are entered accurately, ensuring the money goes to the correct account.
• A common mistake and how to avoid it: Incorrectly entering the recipient’s bank details. Even a single digit error can cause significant delays or the transfer to be returned. Verify these details with the recipient.

6. Choose Your Payment Method

• What to do: Select how you want to pay for the transfer. Common options include bank debit (ACH), debit card, or credit card.
• What “good” looks like: You’ve selected a payment method that suits your needs and budget.
• A common mistake and how to avoid it: Not checking for additional fees associated with certain payment methods. For example, credit card payments might incur higher fees or cash advance charges from your card issuer.

7. Review the Transfer Details

• What to do: Carefully review all aspects of the transfer: the amount being sent, the amount the recipient will receive, the exchange rate, fees, estimated delivery time, and recipient details.
• What “good” looks like: You are confident that all information is correct and you understand the total cost and expected outcome.
• A common mistake and how to avoid it: Rushing through the review process. This is your last chance to catch errors before the money is sent. Take your time and confirm everything.

8. Confirm and Pay

• What to do: Once you’re satisfied with the review, confirm the transfer and proceed to make the payment using your chosen method.
• What “good” looks like: The payment is successfully processed, and you receive a confirmation of your transfer.
• A common mistake and how to avoid it: Not completing the payment step. For instance, if paying by bank debit, ensure you authorize the debit from your bank account.

9. Track Your Transfer

• What to do: Wise provides tracking information for your transfer. You can usually monitor its progress through your account dashboard or via email updates.
• What “good” looks like: You can see the status of your transfer (e.g., “Sent,” “In transit,” “Delivered”).
• A common mistake and how to avoid it: Forgetting to track the transfer and assuming it will arrive without issue. Proactive tracking allows you to identify potential problems early.

10. Confirm Receipt with Recipient

• What to do: Once Wise indicates the transfer is complete, contact your recipient to confirm they have received the funds in their account.
• What “good” looks like: The recipient confirms they have received the exact amount expected.
• A common mistake and how to avoid it: Assuming delivery without confirmation. Sometimes, bank processing times can cause delays, or there might be an issue that wasn’t immediately apparent.

Common mistakes (and what happens if you ignore them)

| Mistake | What it causes | Fix