TransferWise announces $280M investment | Hacker News Reader

TransferWise announces $280M investment

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151 pointsalexee172 comments

I used to study remittance flows for a living. This was a problem that was (is?) begging to be solved. Incumbents like Western Union have always been very expensive and borderline evil. There are well known “corridors” of remittance flows that are still yet to be captured - like Kerala (India) <> Saudi Arabia (Middle-east more generally); Mexico <> US; US <> LatAm etc.

My guess is TransferWise captured the UK<> Poland corridor and expanded from there.

This problem is a great one to solve because the customers have a real pain and one can be very targeted about capturing high-value corridors.

I wish TW the best. Lower fee, Lower friction, Lesser time == Great for customers!

Anyone looking to build a startup in this domain should start here: http://www.worldbank.org/en/topic/migrationremittancesdiaspo...

(This data is useful to understand origin<>destination of remittance flows; Its a greater than $150B market and a lot of untapped/Uncaptured areas; lots still left to do!)

> TransferWise captured the UK<> Poland corridor and expanded from there.

Close! They started with UK <> Estonia, both co-founders are Estonians. IIRC in the very very early days, the whole settlement was done by users themselves over a Skype group.

You are right, but the Poland corridor was probably the key to proving the model though.

Why would either be lucrative? AFAIK within the EU bank transfers are free of fees.

Within the Eurozone bank transfers are generally free of fees, but banks still like to rip people off on exchange rates between different currencies and the EU doesn't seem interested in doing anything about that.

Not if using different currencies. high fees and/or abusive exchange rates.

Poland has 30x the population and likely 30x the number of immigrants to the UK.

I think the exact rule is this: International bank transfers denominated in EUR below 50.000 EUR can’t have higher fees than domestic transfers. FX fees and spread can still remain.

exchange rate

In general, banks do charge excessive fees on exchanging currencies. For example, if you want to exchange €1,000 to $ or £, they'll charge you (by default) a 2.5-5% conversion fee. After negotiating with them, you generally get it down to 0.3%.

These days, I convert through my broker, because they only charge me 0.2% for FX conversions.

It's insane, borderline criminal. I knew someone who wanted to convert ~1m AUD -> USD -- and the banks were still trying to offer to do at 2-3% ! At that amount, you can open a brokerage account and trade through EBS or CNX directly and pay basis points.

Of course they would. Most people don't understand how the fee structure works, so will comply.

You can open up a brokerage account at Interactive Brokers with a few thousand and use it to exchange FX. It's pretty accessible.

I agree, most people are just not aware. I like the machines I've seen in airports and train stations that offer currency conversions. They have 'No Fees! No commission!' posted all over them -- ignoring the fact that the bid-ask spread they're charging is 15-20%. Again, criminal.

Sad but true. :( That said, people do pay for convenience, which I assume is the main function of those cash machines. If I end up in a foreign country that I haven't visited before, I'll likely withdraw some cash (not much) from one of those machines just to be safe.

You never know when your credit cards might stop working.. (I've had my main card blocked randomly while travelling and it frankly was a pain)

Just withdraw cash on a credit card from a regular ATM. Most "normal" credit cards charge on the order of 3% over spot on the FX, some cards further charge a flat fee, but this is still better than those markups.

It's even possible to get cards that doesn't charge a fee and gives you spot FX, even for cash withdrawal (Halifax Clarity in the UK is one). That leaves any fee the ATM might charge you, but if you can find one that doesn't, this is a supremely efficient way of getting cash abroad.

Credit card ATM withdrawal incurs punitive cash advance interest rates. I guess you can pay it off within the day though if you can calculate how much it is.

Charles Schwab checking/debit: no foreign transaction fee, uses the exchange rate, and refunds all ATM fees internationally.

Charles Schwab checking is only available to US residents though -- if you're in a foreign country, you're out of luck.

Which is why we're suggesting different cards that are available in different countries.

Is this relevant? http://news.forexlive.com/!/interactive-brokers-to-cut-off-u...

Might be. I'm actually not based in the US (but I did exchange FX recently).

Perhaps someone in the US using IB could check?

I don't think it's just lack of information. There are probably structural differences having to do with who is taking the fraud risk that account for the different rates.

With a brokerage account, how easy is it to get your foreign currency sent to a bank account in that country?

Often surprisingly hard. The other country is a big factor - Ireland is easier than Iran, the Netherlands is easier than North Korea.

Very easy. Check out Interactive Brokers (horrible interface, but great rates)

What stops banks from dropping those fees to compete with TransferWise? Are they serving a fundamentally different slice of the market?

Probably nothing, but the loss of customers probably doesn't make up for the fees they currently make.

Banks in Germany are competitive with TransferWise for fairly large amounts (several thousand euros). You can achieve sub 0.5% charges with DKB, including the exchange rate penalty, for example. The main problem is that the pricing structures are opaque. Often the exchange rate is not properly advertised (and may not apply depending on the time of the transfer) and there are additional charges to include.

Banks are starting to compete, and they have great advantages to put them right in the middle of the battlefield.. if they move fast enough. For them it would be FX trade volume play and they can forego the fees to the end customer

I wish someone would challenge other dinosaurs like PayPal. Say what you want about Amazon's monopoly but at least they have actual customer support.

Paypal also has support (call,email) used them for refunds and changes on account.

Having had a recent experience with that, their "support" is utterly incompetent. Made a donation to a charitable organization (same one I've made in a previous year), PayPal reversed it without giving any reason, I contacted their support trying to find out why, and several hours later they could tell me nothing more than what the website said: that it was rejected and no reason was given, and I should try using some other method to make the transaction. (They also referred me to an email address for another department, who had no phone number, and that email produced no answer for a week, after which they gave the same non-answer.)

I think maybe payers are the product here not customers.

I used to think the horror stories about PayPal were mostly from sellers, and that they at least went out of their way to do well by buyers. This "support" experience demonstrated otherwise; now I just think they have awful support across the board.

I haven't seen the refund one. Do you have it? All I could see is the ticket system where issues are closed by support rather than user.

Should be able to try for a refund on a payment until 6 months old.

I have zero experience in remittances, so I could be wrong but the whole model seems very capital intensive. It needed ~ 1 billion dollars worth of transactions to turn a profit. [1] [2]

Isn't that supposed to be a bad idea, specially for software based companies.

[1] Transferwise model: https://en.wikipedia.org/wiki/TransferWise#/media/File:Trans...

[2] The company started back in 2011. And select quotes from the article:

> A source close to TransferWise, which has been profitable since early 2017, tells me the new funding values the seven-year old company at $1.6 billion.

and,

> The company now serves over two million customers and offers 750 currency routes, seeing customers transfer more than £1 billion every month.

That's not what capital intensive means[1]. A company that has low margins as its business model necessarily needs to have a large body of transactions to get much revenue.

Six years to get profitable is not really a remarkable period for a VC-funded company.

1: It means requiring lots of capital to get set up, eg. because you need to aquire expensive assets to run your business. Buying your own hardware is more capital intensive that running cloud, even if the latter is possibly more expensive in the long run.

Yes. Sorry, incorrect choice of words.

So the question is if the margins are so low that they need a billion dollars to make a profit, what kind of scale do they need to be worth a billion dollars.

And it somehow it makes me question their business model as well. Sooner or later they will be tempted to raise fees and get more profitability.

It's easy to get distracted by the value of the transactions, but they're just the payload. Nobody is "buying" a product worth those billions in transactions, the same way someone bought $N worth of books for a bookseller to have $N revenue.

A shipping company is evaluated on its ability to move containers, and nobody cares (well, the insurer does) if the containers are filled with iPhones or cardboard, as long as the customer pays the shipping fee.

> So the question is if the margins are so low that they need a billion dollars to make a profit, what kind of scale do they need to be worth a billion dollars.

Well, if we're assuming P/E=20 then they need to be heading for 50 million dollars in profit. Let's guess their "gross margin" from their spread is 2%, so they're currently at top-line revenue of 2 million dollars (and the same in costs). So if their costs were completely flat they'd need to grow to be processing 25 billion dollars of transfers to justify the valuation; in practice growth won't be completely free of costs so we're talking about a bit more, maybe 50 billion dollars. Does that sound vaguely plausible?

> And it somehow it makes me question their business model as well. Sooner or later they will be tempted to raise fees and get more profitability.

I doubt it; there are a lot of competitors in the same space. At the moment TransferWise has the name recognition, but that won't let them raise costs a lot.

I would assume that they will be able to get significant revenue from building higher-value-added services on top of their infrastructure. The "Borderless account" is a potential step in that direction: https://transferwise.com/borderless

Plus they'll be able to increase the fees by x% little by little...judging competition

They don't need to sell a billion dollars, they need to move a billion dollars

And yes, they might increase their fees when they get bigger, still, if it's smaller than what the banks charge, it's a win

(However, since money movements are not balanced they still need to "move back" some of it so they can settle their accounts - but I guess they already have some bulk currency buyng/selling bank to do that)

Not sure about that. Perhaps if they're super convenient to use. But if I'm going to put in the time to set up a system to reduce fees on FX conversions, I want to be sure I'm getting (close to) the best rate possible.

If they start charging 1% tomorrow, up from 0.5%, I'm pretty sure I would reconsider if I were using them (and I have used them in the past, in the early days -- they're great).

But I started routing currency conversions through an account at my broker (Interactive Brokers), and I'm currently getting market rate + 0.2%. These 0.3%s add up fast if you're converting meaningful amounts of money and in comparison Transferwise seems expensive again. But of course it's still a long way from the 2.5-5% banks are charging.

It's not their capital.

It's clearly a service mostly depending on eastern (central) european migrants working in the UK.

I wonder if brexit doesn't fall through what will it do to their single leg business.

And even if brexit fails, these people will become less and less dependent of their home country. (moving close family to the uk, paying off mortgages)

So yeah, my point is these untapped areas can dry off quick. (I'm talking a decade maybe)

Or there are stupid investors who don't want to invest into this no-brainer goldmine. :)

I use transferwise for US => UK. It also seems to be the most widely recommended of the services in the expat community.

not just the UK, this is the same pain point for everyone when interacting between Euroland and the rest of Europe too.

Germany + France + Italy + Spain have _a lot_ of people sending money to non-euro countries.

EDIT: this could dry up quickly anyway though. My bank charges idiotic amounts to change and trasnfer money, I doubt there is any technical reason they must, they can get to TW level trivially, it seems, they just don't care enough.

I use them to move money to/from Europe, The US and Mexico. I used a competitor a year ago. My point is that their business seems to be far beyond a significant Brexit risk.

If they gain inroads in the US Mexican/Central American community, the UK-Eastern Europe segment will pale in significance.

It started as that but it has expanded since. There are lots of people using Transferwise all over the world now. People going to vacation or living in Japan, for example, can save money by using TW.

transferwise has great rates all over the world but not sure how dependent they are on UK market.

> Incumbents like Western Union have always been very expensive and borderline evil.

I'd be interested in more information on this; what kinds of things have they done?

https://www.wave.com/ is tackling the US/UK/CAN <-> East Africa (and apparently now Ghana?) corridor

For me, Transferwise is still very expensive. I use ICICI bank to send money to India and it goes straight to recipient bank account in less than 2 hours along with market rate (xe.com)

Doesn't ICICI quote at least 2 rupees higher than the market rate? I have only sent money from INR to $

It is still very cheaper than rest of the herd

It actually got most of the GBPEUR, not just for Poland.

It might have got most of GBPEUR retail, but the vast majority of that flow by volume is traded in placed like Interactive Brokers, or over the phone between guys who need to swap a few million here and there.

Fair enough, yeah. I only had retail in mind :)

I recently had a client ask me to pay them with Transferwise. It was a horrible experience. After weeks of trying to get it to work, even with the help of support, we eventually gave up and used bitcoin instead.

The Transferwise website was horrible. It gave error messages and kept telling me to fill out some field that didn't exist. After sending screenshots to their support team, they just sent me back links that didn't work.

After several back-and-forths with support they eventually fixed that issue, but then on a later step the website told me to upload "the documents" and gave an upload control. I carefully read every piece of text on the website, and nowhere did it explain what documents it was asking me to upload. It wouldn't let me proceed until I uploaded "the documents". I sent screenshots of all this to the support team and they didn't know what documents I was supposed to upload either.

Eventually support helped me fix that, and I got to a later step, where it asked me for the username and password I use to log into my bank. I am not comfortable providing this to anyone, so I refused. This was the last straw that finally led to me giving up at using Transferwise.

Username and password for you bank account? Ough, what a big no no.

I'm pretty sure they use plaid for verification, who also do this. It's for instant verification; you can choose to do the old school two-deposit verification too.

That's really surprising. I've had only great experiences using it between Europe and North America. Maybe an issue with sending to Cyprus?

I've sent money with them a few times from UK to South Africa and had no problems.

The biggest issue with this remitters is they have hidden vetting processes and can't tell you why you don't meet their criteria because any smart fraudster would adapt accordingly. Unfortunately too many people get accidentally caught in those systems

I use transferwise and didn't give them my bank credentials. Question: which country are you in and which country were you sending to? I imagine this sorry of thing is both country specific and possibly bank specific.

The pain was figuring out the exact recipient bank account name in Japan but that's mainly Japan's fault.

In the US, sending to Cyprus.

I really wonder why they arranged for your bank credentials. I've always been able to just wire transfer wise in the states and they wore in the recipient country. Pertussis there's some regulation in Cyprus about transfers?

I'd guess it's US AML regulations about sending money to Cyprus.

Wow, that sounds awful.

I wonder if many people have had problems with TransferWise or think it's a bad product. I've never used it.

Surprising. I have been money between various EU countries and Canada without a problem.

As a customer, I love TransferWise. The banks charge outrageous rates and fees. The competing money transfer/currency services promise the best rates, but make you sign up before telling you. Then you get constant calls from your "personal currency advisor". In the end you find out their rates are higher, and now you're on call with a sales person. This includes companies HN posters in a previous thread were recommending. TransferWise is upfront and self-service. The one time I had to email support they were great too.

On the business side, TransferWise tells an interesting story about peer-to-peer currency exchange, but I think that's a media play. In practice most transfers will not immediately match with reverse flow. TransferWise have to keep a buffer of each currency and trade on the open market, just like the banks do. That in turn exposes them to currency risks, and it wouldn't surprise me if they lost a lot of money on 24 June 2016. As a VC funded startup they could eat that as a learning cost.

I think you're entirely right on the media thing. I've used them on JP->US and US->JP over the years as my sources of income and expense destinations have shifted around. They're pretty brilliant, but it's clear that they're just buying dollars from UFJ (who has a lot of dollars to sell) at a rate better than the one UFJ would quote me.

Which is fine! It does exactly what it says on the tin.

TransferWise reserve the right to cancel out transaction if the market moved too far.

I think you're right they would eat a fairly big loss to avoid the bad press this would generate, but there is ultimately a limit.

It bugs me this aspect of their business model is never cited, so most people assume they are selling the same product as the banks. They're not: banks take the risk; TransferWise leave it with the customer.

Transferwise has been a godsend for me the past couple years as I've been moving my life to the UK from the US. XE was bought out awhile ago and hiked their fees up, while banks like HSBC have always had high rates to begin with.

Although I'm wondering if jumping on a bitcoin exchange like GDAX to go from USD -> bitcoin -> GBP would be even cheaper these days?

Just to add another data point, TransferWise have been the single most useful financial service for me over the last three years.

In 2000 I moved from Australia to the UK. Transferring money between AUD and GBP accounts was always a bit painful. The banks charged too much and took too long. I even signed up with a dedicated forex trading firm, but at the time they did not offer an online service, so there was still enough friction with phone/email to limit my use.

Three years ago I moved to Central Europe and acquired a EUR account. Soon after I discovered TransferWise and have used it regularly ever since. It works, it's cheap and it's fast.

Its amazing they can transfer to the UK within the same minute now.

You're paying higher spreads, twice, and (likely) higher fees, twice, and also going long BTC for at least a portion of the day. This is unlikely to be cheaper than Transferwise unless you win at Casino Bitcoin.

BTC -> GBP is surprisingly rare (GDAX doesn't support it). Even exchanges I've seen that appear to support it just allow you to do a EUR SEPA transfer, which for example Lloyds will charge you for...

Same here whilst moving from the UK to Spain. Also, their borderless accounts are a lifesaver when working with international clients.

US -> Chile is also amazing despite the $3000/mo limit. Chilean banks are dinosaurs, especially when it comes to international transfers or freelancing.

With the ever increasing price of BTC you could even end up inadvertently making a small profit on the transaction. That being said, with the volatility of it you could also lose all of your money in an instant.

For everyone that's interested in TransferWise, I'd recommend Revolut ( https://www.revolut.com/ ) instead.

They have no fees for transactions or currency changes (up to a quite high limit), as well with a lot more features (international prepaid MasterCard that charges no fees ever being my favourite one, and you can go to ATMs for free as well).

I've been a happy customer of them for quite some time and I have absolutely nothing bad to say about them, but the opposite.

Thought I'd give these guys a chance. Your brief write up piqued my interest.

Their website says, give us your phone number and we'll send you a link to download the app. I'm thinking this is great, a direct APK download and no Google Play Store interference, they just want to protect the download link a bit. I enter my phone number.

I receive my SMS with the download link (http://revolut.com/get). Not being an https link is a bit shoddy from a financial service. I load this page in my phone's browser. It appears to just be the homepage again. I click the "Get the App" link again and........ I'm redirected to Google Play Store.

They've no chance of my custom now. N26 was the same. Why won't these organisations at least offer a direct APK download from their own infrastructure?

Because they'd have to talk users through allowing direct APK installs, complete with all the scary warnings.

That's going to reduce the number of customers they get a lot more than a redirect to the Play Store.

How about a choice of Google Play Store or direct download, for "Advanced" users? That's all I'm asking, just a tiny little 8pt font link to directly download the APK.

Why would a business host a APK directly when they can just utilize Google's infrastructure for free? Likely you would have a lot of users mistakingly download the APK if they saw the link and get confused as to why it's not working like all their other apps, whereas downloading from Google Play Store works seamlessly.

Then host the APK on GitHub. They don't have to host source there as well. And I'm sure they can design a page in such a way that only the more technical potential customers go for the direct download.

It's also rather ridiculous that these services are accessible/usable/activated only via an installed app on my phone or tablet. Just make the service available via my web browser and the issue is resolved.

In the end I just don't bother with these services - N26, Monzo and now Revolut. I'll just stick with TransferWise.

How would you deal with updates?

Most users don't allow installs from untrusted services. Users that aren't you would have a very hard time.

I researched this recently, as they both seem to cover similar markets, but they are not targeting the same market. Revolut is more like a “traditional” bank, whereas Transferwise is a remittance service, generally bank account to bank account. Some people don’t want a new bank account and just want to transfer money, so Transferwise is a better fit for them.

Well, it's not really a bank account but a kind of "wallet", and the setup process reflects this (having gone through N26's, bunq's and Revolut's, definitely Revolut's is quicker and less fussy). However, they do provide you with personalized IBAN numbers to top up your wallet, which really blurs the difference between those two concepts. And BTW, Revolut also supports bank account to bank account transfers in multiple currencies.

For holiday money, Revolut is #1, zero question. But if you need to move £1m from a house sale when emigrating, then it may not work so well.

just FYI, Revolut uses TransferWise underneath on a few of their currencies, so you're effectively using them both ;)

happy customer of both to be honest and would recommend both happily

Oh I didn't know! I've only ever used it to exchange between USD, EUR and GBP. Do they pass the TransferWise fee on to you, or is it free as well?

i believe the Revolut fee takes into account the Transferwise one. i haven't used it with enough money on the revolut side of things to be able to notice anything.

I'm on Revolut's waiting list to get access as a US citizen, but TransferWise turned on my Borderless account immediately.

Really looking forward to trying them, but they're constraining their user base artificially at this time.

Does Revolut offer recurring payments for the business accounts? I'd ask them but looks like I'd have to call and talk to them as a non-customer. I see they are also building an API so maybe that is expected to be done via the API.

Literally just used TW to pay an international contractor in ~30 seconds. From a customer standpoint, this is great news. Well wishes to these folks.

I'm now paid in USD, but I live in Canada. My bank offered me the 'competitive' exchange rates of 2.5% more than the market offered.

TransferWise is literally saving me thousands of dollars per year. I can't thank them enough.

I am in a very similar situation (outrageous exchange rates from by Canadian bank). Do you use TransferWise to transfer between your own accounts in a Canadian bank or from your US bank to your Canadian bank?

US Bank account to a Canadian bank account. Sort of.

Because I'm an idiot, I'm still with RBC. They have a US subsidiary bank called "rbcbank" with no physical locations. Same terrible RBC service, but in America. They opened an account there for me. They offer very fast transfers between the US account and Canada account, but at the stupid rates they offer.

ALl my money transfers via TW now.

I wish they would issue credit cards soon. Every time I pay with credit card while travelling, my bank charges 1.5% for each transaction, in addition to bad conversion rate.

If you're in the UK, have a look at Monzo. Not a credit card, but very useful to use abroad. They don't charge a transaction fee when abroad, and the currency conversion is tracked to the MasterCard rate (whereas other providers tend to do card issuer + their own cut on top).

Result is it's very cheap to use abroad. :)

They actually plan to start charging for this because ATMs charge them:

£200 free allowance per month, 3% charge for withdrawals thereafter everywhere outside the UK

From here: https://monzo.com/blog/2017/09/13/atm-fees-abroad/

I would have just transparently passed on whatever the ATM charges rather than this weird 3% fee.

I'm a Monzo user and really unhappy to find this out. I spend most of my time in mainland Europe and the free transactions and no ATM fees are the only reason I am a user.

Can anyone comment on how Revolut compares? One pain point is that I always get asked if I want to pay in GBP or EUR, or even the cashier selects without asking me, in which case I get massively ripped off if they select GBP. With Revolut will the card look like a EUR card whilst travelling in the Eurozone?

For overseas ATM withdrawals:

Monzo (After 18th December): £200/month, 3% thereafter (https://monzo.com/blog/2017/10/17/atm-limits-announcement/)

Revolut: £200/month (£400 with Premium), 2% thereafter

Starling: No charge

Not sure about any of the other challenger banks, I've only used Monzo on a regular basis.

I just used a Revolut card during a two week trip around Iceland. It worked fantastically well. Iceland's interesting as some places charge in Krona, some in Euro, but in either case I was charged the live mid-market rate to the GBP with no extra spread or fees.

You're also allowed to withdraw roughly £200/month worth of cash (any supported currency) without any fees. Beyond that there is a charge, I can't remember how much offhand but it's not too crazy.

The one problem I had with the card was at their petrol stations. Most are self-service and require the card to be pre-authed before the fuel will start being pumped. Revolut doesn't support this so I had to use another card or find stations where I could pay in store.

Same problem with petrol stations in the USA. Most were pay-at-pump and didn't accept the card.

I've got money in GBP, EUR and USD in a Revolut debit card. I've used it on ATMs in mainland Europe and continental US without problems.

Well Santander are now charging a 5 euro fee; Sabadel have been charging 1.50 for at least the last year.

With Revolut cards?

Yes

you get the same thing with revolut.

Unfortunately, from the 18th December, that's stopping: https://monzo.com/blog/2017/10/17/atm-limits-announcement/

It's only for ATM withdrawals. If you are in first world country where card payments are well integrated this is not issue for you. Granted, in many developing countries you need cash so this will be issue.

Haha, have you never been to Germany? Tons of places still don't take credit cards.

I'm from EU (Slovakia) and not that far from Germany but surprisingly I have never been to Germany (not counting transit when I traveled through Germany in a train/bus or had to change flight) for some reason. I have always wanted to go but somehow I find places I want to go to more all the time so my travel to Germany keeps getting pushed down the list :D

Maybe 2-3 years ago, but at least in the cities the card acceptance is quite good. Berlin in particular and cafes in general being the exception.

… and bakeries, my god. I haven't seen a single bakery that accepts cards (EC or credit). Wanna buy €30 worth of cake to bring to work for your birthday? Nope, cash only.

Most Kamps do, some are franchise though.

I live in Munich and it still feels pretty hit and miss to me.

ATM withdrawals is the main selling point though.

There are plenty of cards in the UK that do not have a foreign transaction charge on purchases (nationwide, lloyds avios, for example).

From my experience though, Monzo has been much more reliable when traveling. It works in much more places in Asia for example. I traveled around Asia for a while before with my TSB UK debit card and it was getting declined almost everywhere, even in big cities like Hong Kong or Taipei (and yes I called TSB and told them I will be traveling Asia for few months in case they have some restrictions on debit cards in place, didn't help at all).

It got to a point I had to open local bank accounts and do wire transfers from my UK bank account to local bank accounts and use the local debit card. I just couldn't get my TSB/Lloyds card to work anywhere except high end western shops like Apple Store.

My use case is frequent trips to Sydney for work - a surprising number of cafes and restaurants there are cash only.

Hmm, that's surprising. I have traveled a lot in Asia (never to Australia though) and from that experience I know a lot of Asia is still cash based but Australia I'd expect every coffee / convenience shop to accept Visa/Mastercard.

That is fascinating. As someone who lives in Sydney's outer suburbs, I simply never need cash. For anything. It's almost the exact opposite of Germany, where I lived for most of the last 5 years.

Was your experience all within the inner city?

Mostly yes - around George St. for work.

For sure many coffee shops and convenience stores accept card, but I definitely find myself having to pay cash quite often (just for instance, the laksa place on Hunter street).

From Dec 18 Monzo will start charging fees for cash withdrawals abroad though. Which is relevant for people traveling to cash based countries (many in Asia) where cards only get accepted in high end stores and restaurants.

I was considering them until they changed their name. I just can't get over it.

And what was their old name?

Mondo. But it turns out there were some copyright issues (some other Mondo already existed) so they changed their name to Monzo.

Mondo, they had some trademark issues with it and had to change it.

Mondo -> Monzo

If you're American, there are cards that don't have a foreign transaction fee, like the Capital One Quicksilver Visa or Chase Amazon Visa.

Schwab's checking accounts are also great for this, the ATM card reimburses ATM fees and has no foreign transaction fee for pulling out cash.

Pretty much all the airline cards have zero foreign currency fees. They still have less than perfect exchange rates though.

Depending on where you are from there might a better alternative.

In Europe, you have Revolut, N26 and Monzo which gives you a prepaid or debit MasterCard. Instead of the higher foreign transaction bank fees you will get either Mastercard’s or interbank rates, which is so much better than your traditional bank exchange rate.

I have tried to list some options here: https://globalmoneyapp.com

Revolut have appalling customer service. I have let a couple of rogue transactions go because it's such a hassle dealing with them.

I've heard they are planning on adding those fairly soon (in the spring of '18)

CapitalOne doesn't charge any foreign transaction fees on their credit cards.

Yeah but they charge on atm withdrawals and the exchange rate could be the banks rate depending on the card.

AFAIK, all credit cards charge high fees for cash withdrawals. You should never do a cash advance on your credit card. Use a debit card for that.

CapitalOne for credit cards, Schwab Bank for ATMs

Use Revolut, if you're in the UK.

TransferWise has saved me a _lot_ of money over the last couple of years. The website has gotten worse I must say but otherwise their service has been nothing but satisfactory. I'm still hoping they'll offer a credit or debit card to make it possible to pay in foreign currency on the spot without paying horrific conversion fees.

Revolut provides this service.

(disclaimer: I haven't used Revolut yet and thus can't vouch for them)

TransferWise held up a few thousand dollars I was sending to a friend in Europe who had been stranded. It wasn't like they just didn't send it for 24 hours, it took TransferWise three weeks to make whatever determination they were going to make, and cancel the transfer instead of sending it to my friend. They also made some incredibly bizarre accusation when canceling the transfer, that they believed the money was for "contraband" (drugs? guns? TransferWise didn't say). Considering my friend is the youth pastor in my hometown, well... So I'm not sure where TransferWise got their information, but there you have it: They held my money for three weeks before canceling the transfer for incredibly dubious reasons.

To be fair, if you were sending it within/from the US, they have to deal with a lot of AML/KYC laws (and it's similar in Europe), so their system probably flagged it automatically, especially if you were a new customer or had little interaction with the platform previously. It would likely happen at a bigger bank as well. It absolutely shouldn't have taken three weeks before getting it sent or not, but they likely wanted to cover their ass in the case it actually was for "contraband".

Nothing that dramatic but I have had mixed experiences from their support

Hopefully they can use some of that dough to improve their support.

I've been trying to do a business (US) to business (EU) transfer using TransferWise for the last few days and it's been a nightmare. First they can't accept an ACH payment, then they cannot match the wire transfer to my business account, support doesn't answer, their automated "Action Required" emails have links to help topics that don't exist and their phone support can't do anything and asks you to email them instead, with the emails never receiving any kind of acknowledgement.

Maybe it works fine for sending your friend a fiver, for business use it's a total fail so far.

These guys are the best!

I've used transferwise to move dollars into euros the day before Brexit. They could not ship the money in time because of the overall transaction volume, and so they offered me the best of the rate I had locked in and the market rate after Brexit!

I hope TW uses some of the money to build out recurring payments. That is the biggest thing stopping me from using it for B2B payments (think SaaS product with monthly billing). If there are workarounds, would be happy to hear.

I generally goto remitrate to check best rates offered today : http://www.remitrate.com/best-exchange-rates/compare-USD-to-...

In my experience, Transferwise has been one of the most expensive ones if not the most expensive. Folks at remitly, ria almost always offer better rates compared to Transferwise (atleast on two occasions when I was sending it)

I would at some point want to give them a try though.

no surprise. good product. just trying out their borderless account for EUR->GBP. A fair whack cheaper than transferring into my Natwest account.

I can send rupees to my indian bank account at a very competitive rate from the US. But getting it back means going through the bank's FX system which marks it up by ~3%. Are there FX brokers to which I can route money from my Indian bank account so that I will not be charged the 3% rate for the subsequent INR->USD conversion?

I use TransferWise a lot - I work in the US, but send money back to my NZ account regularly. I sent some money last night and it took 2 hours to show up. Can't recommend TransferWise highly enough!

I don't understand what TransferWise offers beyond what PayPal does. Why not just send yourself money using 2 PayPal accounts? Are they cheaper or faster?

I'm not sure about this but doesn't paypal charge lots of little fees? For currency conversion, for withdrawal... Their exchange rate is not the best.

In comparison, transferwise makes it simpler and straight to your bank account.

You might also consider "more legal" as a factor. I don't believe PayPal wants you to have two accounts with different currencies.

Ok. But what would be the problem? If you legitimately have two bank accounts in two countries in two different denominations, what's the problem with having two different PayPal accounts connected to the different bank accounts? I don't know what would be illegal about that.

I do that, but it's explicitly against Paypal's terms and conditions. If they ever decide to crack down on it I will lose one or both accounts. Also, Paypal's currency conversion rates are terrible. Transferwise actually offers very good rates and the money is in my bank account within 30 minutes(vs ~2 days for a proper bank transfer).

It would correlate strongly with people trying to evade taxes and/or launder money. PayPal doesn't like to facilitate illegal activity. I'm not theorizing about this -- I have first hand knowledge.

Ok I am not trying to be dense. I really am curious. Maybe it correlates strongly, but there's nothing dishonest or illegal about it that I can tell. PayPal has all your personal info. They have your bank account info on both sides. People transfer money between. So maybe it's a pattern that money launderers use, but so do regular people. What am I missing?

PayPal isn't obliged to accommodate all legal banking patterns.

If 1% of all customers are fraudulent but 5% of customers with multi-country bank accounts are fraudulent, that might be enough to tip their risk/reward balance.

And I've dealt with this first hand. I have paypal accounts and legal bank accounts in multiple countries, and when I've tried to move money between them I get a call from customer service saying they blocked the transactions, and "you're not supposed to do that with paypal".

Paypal can't know that you're not doing money laundry even if they have the bank info on both sides. Paypal will err on the side of caution and will often block your transfers, no matter how many documents you can produce that claims what you are doing is legal.

I think you are assuming that paypal operates on reason, but it rarely does.

From my experience (sent to me in US via Transferwise from Australia) I didn't pay any fees to receive, and per the person in Australia, the exchange rate was favorable over Paypal's.

Obligatory "But what if you just used Bitcoin!"

Can anyone say how TransferWise compares to CurrencyFair?

I've found TransferWise to be slightly more expensive than CurrencyFair, however TransferWise is capable of US <-> EU transfers in both directions, whereas CurrencyFair can only handle EU -> US (I believe because CurrencyFair does not yet have a presence in the US).

Also for holiday money where I need a card I use www.weswap.com - great product.

I believe, With a brokerage account, it's easy to get your foreign currency sent to a bank account in another country.

to your account yes, but not if you want to send money to your friend or employee.

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