Fact or myth: Wise is the cheapest way to transfer money?
Published: June 7, 2021
You should consider opening a Wise account (formerly known as TransferWise) in order to facilitate international money transfers. It’s a super easy account to setup, has a fantastic app, and is incredibly transparent of the costs to exchange and transfer money prior to executing the transaction. But you can do it for cheaper than Wise? I decided to dive into this more and research if the highly touted Wise solution was the very best I could get. For the purposes of this discussion, I directing this conversation towards United States citizens or greencard holders living in Europe who may transfer money back and forth between Europe and the United States. People that are not United States citizens or greencard holders may also find this information useful if they already have a United States bank account and need to transfer money to or from there into a bank account in Europe (perhaps a former resident of the United States that moved back to Europe).
2022 November Update: There is a new disrupter on the market called Atlantic Money! I have updated the blog below to suggest Atlantic Money for EU->US money transfers and still suggest the Revolut+Wise combo for US->EU money transfers.
2022 July Update: Revolut changed their pricing structure to no longer offer 1 free international transfer per month. I did endless research to discover what the best alternative was, and came up empty handed. What does this mean for this blog? Revolut (Premium)+Wise combo continues to be the cheapest way to move money from the US -> Europe. However, on the return side Europe -> US there is no inexpensive option on the market. The closest I could come was the product Monese, however it is not currently offered to residents of the Netherlands so I cannot try it out. When I relocate to Italy, I will give it a try and likely post a new blog with my findings. Monese is more expensive than Revolut, and would come in around €100 annual fee but has (according to their marketing materials) unlimited international transfers back to the US. If I need to pay 85€ for Revolut for US->Europe transfers and 100€ for Europe->US transfers then it makes the setup less cost effective. More to come in this space but we are certainly disappointed by the lack of any options in the banking disruption space that offer even 1 free international transfer per month. The below blog has been updated to strike out the NL->US transfers information as it is now much more expensive.
Conclusion: it’s a myth, if you are transferring €1,000 or more per month
A Premium account with Revolut costs €85 annually and includes exchanging currencies for free (at the Interbank rate). It is cheaper to use a combination of Revolut and Wise for payments from the United States to Europe, rather than Wise alone.
It is cheaper to use Atlantic Money for larger payments from Europe to the United States.
Roughly the breakeven point is if you send €1,000 per month in international transfers. Below this amount, it is just simpler/easier and mostly cheaper to use Wise for all of your needs.
Europe->US: Setting it up
This is the easy part. I recently discovered Atlantic Money and it’s a game changer. For a flat fee of €3 you can send a transfer of EUR or GBP into USD and send to a US bank account, up to €1M. No more €50 transfer fees from Wise or Revolut to send €5,000.
I recently discovered Atlantic Money and it was created by 2 expats in London that were tired of paying higher fees for high value transfers. Wise and Revolut both admit that they really nailed the market on lower value transfers but because their fees increase with the value, the fees can end up being hundreds€€€. Atlantic Money launched their product last year and charge a flat €3 fee per transfer for moving GBP or EUR cross border into 8-9 currencies (and growing), and they give you the Interbank exchange rate (same as Wise and Revolut).
The app is incredibly simple. Easiest signup process I've ever experienced. You will be asked for ID verification to send larger amounts for anti-money laundering purposes. If you want to send BIG amounts of money, you will likely be asked for more paperwork about the source and destination.
You can send GBP or EUR into about 8-9 other currencies, including USD. This means that for now, until they launch more currencies, Atlantic Money does not currently work for moving USD from US->Europe (which we discuss in the next section).
You cannot hold money in the account. The beauty is the simplicity of just moving money. I entered in the recipient details (my own bank account in the US), then I was given instructions on how to fund the transfer. I was instructed to send a bank transfer from my EUR bank. So I logged into my EUR account, sent a bank transfer to the details they gave me, and it arrived and was confirmed in the Atlantic Money app in minutes.
Once the receipt of my EUR transfer was confirmed, I then was informed the USD would be on its way shortly. I started the transfer on a Friday, and it indicated that the USD would arrive in my US bank account by Thursday the following week which is ~5 business days. You can pay an extra €5 fee for speedier delivery. But, I logged into my US account on Tuesday and the USD had arrived. So ~3 business days.
First transfer is free. €3 for each transfer. Amazing.
This is a new kid on the block, it does not have the same track record as Revolut or Wise. So use at your own risk. But I am EXCITED about this startup serving an unmet need in the market for those of us living abroad and needing to move sometimes large amounts of money back and forth to the US, either on a regular or one off basis.
Real example of the fees you would pay with Revolut or Wise (all 3 services give the Interbank exchange rate):
Moving €5,000 in Revolut -> €12 fee (+ €85 fee for annual premium)
Moving €10,000 in Revolut -> €24 fee (+ €85 fee for annual premium)
Moving €5,000 in Wise -> €25 fee
Moving €10,000 in Wise -> €50 fee
If you moved €5,000 every month from your European EUR account into USD in a US account, you would pay €300 to Wise or €36 with Atlantic Money.
US->Europe: Setting it up
This one is way more complicated. Once Atlantic Money launches USD to EUR then I will fully ditch Wise and Revolut. Keep in mind that there are two processes at play here:
First is the exchange of currency (you will always use Revolut for this).
Second is the international transfer of money (you will use a combination of Revolut and Wise for this).
For cross border transfers, you might have a total of 4 bank accounts as follows, I will use my own banking choices for example. The only 2 that cannot change are Wise and Revolut. As I am using my own bank accounts for example, this will be Netherlands (EUR) > United States (USD) and the reverse United States (USD) > Netherlands (EUR) transfers.
US:
Charles Schwab (CS), routing/account number are US based. Account denominated in USD.
EU:
Wise (TW), EU IBAN with a USD account established, you will receive a US routing/account number for this account but it will be recognized as an EU account.
Revolut, EU IBAN
ING, EU IBAN
Here's how to setup the TW and Revolut accounts, then we will walk through each direction of transfers, how it works, and how much it is going to cost you.
Wise (TW)
You first setup an online account. You only need a few pieces of information like name and email address. Once your account is online it allows you to do transfers and exchanges for a fee. You are not using this function. You will setup a Multi-Currency Account instead (formerly called Borderless Account, next steps listed below).
Proceed with setting up your Multi-Currency Account (formerly called Borderless Account) full profile, your date of birth, full name, and local Dutch address. It is important that all signs point to your Dutch residency. Use your Dutch residence permit as your identity verification document. You may be asked to provide a second identity document, I used my Dutch drivers license. Do not setup a US TransferWise account.
You will sign up for a Debit Card. This is called setting up your TW "Multi-Currency Account (formerly Borderless Account)". This costs 6 EUR to ship you the card. Once you verify your identity online you get your card details immediately (16 digits, expiration, CVV code).
You will immediately also have access to "setup a US account". You do this by funding the account with USD from CS. For $200 this cost me $.61. Once you execute this funding of USD into TW, you will have a US routing/account number associated to your account and people can send you USD. This account looks and feels like a US bank account though it is actually an EU account.
This is the only time you will fund your account inside of TW. Going forward, you will always go outside of TW to CS and send money in. Do not wire money in from CS, sent it ACH using the ACH Routing Number and Checking Account number now assigned to you by TW.
IMPORTANT: You cannot setup 2 TW accounts (one US and one EU). It is not allowed by TW and they block it. Don't bother trying.
Outcome:
Cost setup: TW debit card 6 EUR.
Cost setup: TW fee $.61 USD on first funding.
Cost ongoing: Transfer of $10,000 (or any amount) ACH from CS to TW $0 (free!).
Revolut
The free version of Revolut charges you for transfers/exchanges. I pay for Premium which is about €85 for a year which comes with unlimited free currency exchanges (at the Interbank rate).
Revolut is only available as a smartphone app. There is no web portal (though rumor has it they launched desktop the week of 8 December 2020, but I have not used it).
When you setup your Revolut account, again like TW make sure to do it with a Dutch phone number, with your Dutch residence details, so that you get an EU IBAN. Do not setup a US Revolut account. You can verify your account with your US passport but they will also ask for proof of Dutch residence so I just preferred to setup my account with my Dutch residence permit (so I didn't have to provide 2 sets of documents).
IMPORTANT: You cannot setup 2 Revolut accounts (one US and one European). It is not allowed by Revolut and they block it.
US->Europe: Example with transfers from US to NL
Facts of our example: this is where things get tricky and where TW comes in only for the main transfer, not for exchange. We want to send $10,000 a month to NL and exchange to EUR.
Go to CS and send $10,000 in to TW. Do not wire money in from CS, send it ACH using the ACH Routing Number and Checking Account number now assigned to you by TW on your USD Multi-Currency Account (formerly known as Borderless Account).
Open your Revolut app. Go to the USD screen. Add the details of your TW debit card to the "Add Money" function. Revolut is not likely to limit how much you can add via the debit card, however your TW account will limit you on a daily and monthly basis. My daily limit is £10,000 and my monthly limit is £30,000.
Inside Revolut, exchange your $10,000 to EUR. I received €8,222.03.
Send your EUR to your ING account (EUR->EUR).
Outcome:
Cost annual: Revolut Premium €85.
You can do the above (receive money) as many times as you like with no limit, it will all be covered under your Premium annual fee.
Cost ongoing: Transfer of $10,000 ACH from CS to TW $0 (free!).
Cost ongoing: Add Money of $10,000 via TW debit card into Revolut $0 (free!).
You will encounter limits (£10,000 daily and £30,000 monthly for me).
Cost ongoing: Exchange from USD to EUR inside Revolut - Interbank rate $0 (free!).
Cost ongoing: Transfer of EUR from Revolut to ING $0 (free!).
Wise (TW) Comparison?
If you had sent the money using TW only (the free account, not the Multi-Currency Account formerly known as the Borderless Account) it would have cost you $74.11 in fees and you would have received €8,187.22.
As you plan to send $10,000 each month, your Revolut Premium account pays for itself quickly:
Using Revolut + TW Combo: $10,000 x 12 months - €85 EUR annual fee: (€8,222.03 * 12 - €85.00) = net receipt in ING of €98,579.36.
Using TW alone: $10,000 x 12 months: (€8,187.22 * 12) = €98,246.64.
You save almost €332.72 by using a combination of Revolut + TW.
UPDATES: December 12 2021
I am frequently asked why does the Revolut account and the Wise account need to be European versions. This is because if you send EUR from your Dutch (local) bank account to a Revolut account that was setup as US, then it is seen as an international transfer and you will pay a fee to your Dutch bank. By setting up as a European account, then it is within SEPA and there are no charges. Similarly, when you use your Wise debit card to top up your Revolut account if the Wise account was a US version then when you go to topup it sees the debit card as an international bank card and charges a hefty fee.
Sometimes, in my personal experience, I will go to topup my Wise debit card into my Revolut account and the transfer is rejected. If I just delete my Wise debit card and enter it again (takes 10 seconds) then it clears the error and it works. Another option is to use the virtual / disposable card from your Wise account and top up with that debit card in case the one you normally use gets rejected.
Another reader of this blog reported the following issue as well: “I ran into a problem where I could only transfer about USD 4K per day from Wise to Revolut using the debit card. I don’t know if it was because both accounts were new or not. Neither bank could tell me what the problem was as each said there were no restrictions on their side. Later, by accident, I may have discovered the cause. When you are in Revolut and add money using the Wise debit card, it asks if you want to approve using the Wise app or SMS message. I was always using the Wise app. One time I tried using SMS and the higher limit of USD 10K was allowed.” So the lesson is to check your settings on transfer verifications as that may be causing issues reaching transfer limits.
UPDATE: July 19 2022
Revolut changed their pricing structure to no longer offer 1 free international transfer per month. I did endless research to discover what the best alternative was, and came up empty handed. What does this mean for this blog? Revolut (Premium)+Wise combo continues to be the cheapest way to move money from the US -> Europe. However, on the return side Europe -> US there is no inexpensive option on the market. The closest I could come was the product Monese, however it is not currently offered to residents of the Netherlands so I cannot try it out. When I relocate to Italy, I will give it a try and likely post a new blog with my findings. Monese is more expensive than Revolut, and would come in around €100 annual fee but has (according to their marketing materials) unlimited international transfers back to the US. If I need to pay 85€ for Revolut for US->Europe transfers and 100€ for Europe->US transfers then it makes the setup less cost effective. More to come in this space but we are certainly disappointed by the lack of any options in the banking disruption space that offer even 1 free international transfer per month. The below blog has been updated to strike out the NL->US transfers information as it is now much more expensive.
UPDATE: November 22 2022
I removed old references to moving money with Revolut from EU->US and have now replaced that content with Atlantic Money.
Disclaimers
This is not financial advice, no predicted outcomes discussed in this blog can be guaranteed. This blog is for entertainment purposes only to illustrate how Wise is not always the cheapest option. The value of using Revolut grows the larger the amounts are you are transferring. Products are mentioned for illustration purposes only and are based on my personal experiences as an expat/immigrant living and traveling in Europe and the United States. The complexity of filing your United States FBAR each year may increase as you have a lot of accounts with in/out and sometimes you have to report multiple accounts for Wise (one for each IBAN/account number). Talk to your tax adviser. This blog was current as of 7 June 2021 and may be out of date by the time you read it. Nothing in this post is sponsored and I have no connection to any businesses mentioned here. Did you find any mistakes or has anything changed since I posted? Please get in touch with me and I will update it! Do you disagree with my assessment? Let’s have a virtual coffee and debate it!
- Jessalyn
