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A wise man once told me that if I took care of the pennies, then pennies would take care of the dimes and dollars which would then take care of me. And in 2022, being frugal and wise with our money is more important than ever in this challenging financial climate. So here is our Wise Account review.
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Wise Account Review: Multi-Currency Account for Travelers, Expats and Businesses
In this post we are going to review Wise. Wise have risen to become one of the best rated USD accounts and international payment providers in the world today.
For many of us today, the relationship we have with our bank is often the single longest relationship of our entire lives. It may not surprise you to learn that on average, customers stick with a bank for 17 years. Which is actually longer than most modern relationships endure!
But sadly, this relationship is often kind of dysfunctional. The loyalty customers show is rarely if ever appreciated by the banks.
Firstly, interest rates on savings barely even scrape inflation these days.
And then there is the raft of fees that banks levy whenever customers do something ever so slightly out of the ordinary.
And don’t get me started on the horrendous hold music that our banks barrage our ears with every time we try to call them…
Well, the good news is that we do now have a choice. For the last decade and then some, the fin-tech sector has been mixing pioneering technology with a genuine thirst to make financial services more accessible and affordable.
Time To Wise Up
Wise was originally launched in London back in 2011 as Transferwise. Founders Kristo Käärmann and Taavet Hinrikus came up with the concept after becoming disillusioned with the extortionate bank transfer fees they were paying each and every time they transferred money back and forth from their bank accounts back in their native Estonia.
Indeed, by relying on the banking system’s international SWIFT payment network, customers all over the world are opening themselves up to uncompetitive exchange rates as well as handling fees which are applied by both the sender, and recipient banks.
Initially, their concept was simply to create a service that would help users move money internationally cheap and fast. They achieved this by devising a system that could change currencies and move money internationally that did not exclusively rely on the SWIFT and IBAN systems. And almost bypassed the banking network completely.
The concept was a smash hit from the offing. And proved very popular with expats, freelancers and regular travellers. In fact it was popular with all people who routinely sent and received international payments.
The company is now worth an estimated £1 billion. And its rebranding in 2021 as “Wise” signifies its readiness to move beyond the international payment space and properly prepare to take on the banks.
Who Should Use Wise, and Why?
Wise is priming itself as a challenger bank. It can now be operated as a virtual bank account to receive a salary, pay direct debits, withdraw cash and cater for all of our day to day banking needs.
There are now options available to apply for Wise credit cards. And it is expected that they will enter the secured lending (ie, mortgage) market soon. Therefore, Wise is now a suitable option for absolutely anybody who is looking to open a bank account.
However, it is true that some account holders will get a lot more out of Wise than others. Let’s take a look;
If you are a regular traveler (a rare thing in the post COVID landscape eh?), then you no doubt know how expensive it is using your regular bank account overseas. Whenever a customer uses their bank card or withdraws cash in a foreign country, their bank charges the account either a set fee or a percentage. I personally learned this the hard way after being charged $2.75 to withdraw $10 in Madrid. For customers travelling long term and spending more time overseas, then the bank charges can soon add up to hundreds of dollars (again, a lesson I had to learn the hard way).
However, one of the benefits of Wise is that they do not charge a fee for foreign bank card payments. Additionally, customers can withdraw up to $300 cash each month from foreign ATM’s without incurring any bank fees (note that the local bank may charge a fee). Whilst $300 in cash may be not enough for a whole month, it’s certainly a start.
Remember, Wise was founded by ex-pats for ex-pats. And so it should come as no surprise that they remain huge beneficiaries of Wise. Anybody who holds bank accounts in multiple countries can move money into their Wise account for very low fees (often just a few cents). Once the money hits their Wise account, they can either transfer it onwards to their ‘main’ bank. Or simply leave it in Wise and spend the money using Wise as their current account.
Some expats also use Wise to make large payments in their new home country such as paying rent on apartments. Wise is especially useful for expats as opening a foreign bank account can sometimes prove difficult so it makes an excellent short term measure even if nothing else.
In this globalised tech-age, more and more small and medium businesses are transacting internationally. They could be selling their products to exotic markets or using offshore suppliers. Now, whilst doing business globally is exciting, it does carry some unique challenges. Firstly, sending or receiving payments internationally exposes business to banking fees that eat into profit margins. With Wise though, these fees are vastly reduced and become a fraction of what a bank charges.
Furthermore, any business doing regular business internationally becomes vulnerable to fluctuations in currency markets. If a business’s native currency suddenly drops, then a foreign service or product can suddenly become more expensive. A Wise account can help protect against this as it allows businesses to hold multi currency balances. For example a business could have used Wise to hold both a USD account and EUR account and keep a standing balance in each of these two currencies. Traditionally a multi-currency account has been hard to come by but with Wise, anybody business can open one in minutes.
The Age of Wisdom
In 2022 there are not many reasons for customers to stick with the traditional banking elite. As we have seen, Wise offers many benefits and advantages that the old guard simply cannot compete with. Whether you are an expat, a traveler, or just a bank customer who is sick of bad service, then why not open a Wise account? And see for yourself what they can offer!