Wise Exchange Rate: What is the Cost for Transferring Money?

Last Updated on April, 2024

Are you tired of hidden fees and uncertain exchange rates when transferring money abroad?

Look no further! 

Wise, formerly known as TransferWise, stands out with its transparent mid-market exchange rates and low fees.

This detailed guide breaks down how Wise’s exchange rate model works and why it’s a beneficial choice for your cross-border transactions.

Ready? Let’s dive in.

Quick Summary

Wise is a money transfer service formerly known as TransferWise that offers transparent mid-market exchange rates and low fees.

The mid-market exchange rate, obtained from Reuters and updated in real-time, is the benchmark for fair and transparent currency conversions.

Wise offers features such as rate alerts and guaranteed rates to help users save money and make informed decisions when transferring money internationally.

Understanding Wise Exchange Rate

wise logo

Wise is one of the few providers in the international money transfer market to offer mid-market exchange rates without any markup.

But what exactly is this mid-market exchange rate that sets Wise apart?

The mid-market exchange rate is the midpoint between the buying and selling prices of two currency pairs in the foreign exchange market. This rate is not marked up, ensuring users receive fair and transparent rates. It’s also known as the interbank or middle rate.

Did you know: The Wise rate is obtained from Reuters and is regularly updated in real-time during the trading market opening hours.

On the other side, financial institutions often adjust rates, deviating from the mid-market rate. They do this by adding a margin to cover costs and make a profit when individuals or businesses exchange currencies.

For example, if you have $100 USD and want to exchange it for GBP at a mid-market rate of 0.78, you would receive GBP 78 without additional fees. 

However, some transfer providers or banks may use a lower rate, like 0.72 GBP for $1 USD, resulting in only GBP 72 for the same $100 USD.

Learn everything about Wise from this review.

Where to Find the Wise Exchange Rate?

Users can visit the Wise website or download the Wise mobile app to find the Wise exchange rate. Just enter the desired country’s currency (e.g., USD to AUD), and the Wise tool will display live data on the current mid-market rate. 

Pro Tip: Users can also view historical chart changes of the real exchange rate over the last 48 hours to 5 years for the selected currency pair. 

Additionally, Wise keeps users informed about real-time exchange rate changes through its mobile app and personalized email alerts. Sign up for Rate Alerts to stay updated on fluctuations.

To access this added feature, follow the below simple steps: 

  • Visit the Wise Rate Alerts page.
  • Then, select the currency pair for which you want to get the rate notifications.
  • Choose how you want to be notified. Either for daily exchange rate changes or when the rate hits a certain level.
  • Finally, enter your valid email address and click the “Get rate alerts” button.

To compare Wise Exchange Rates and Fees with other service providers, visit the Wise Money transfer comparison page.

Wise International Transfer Duration and Limits

International money transfers are not only about exchange rates and fees. Knowledge of transfer duration and limits also matters when making informed decisions. 

If you’re wondering how long a transfer takes with Wise, it depends on several factors.

  • Faster payment methods like debit or credit cards can result in near-instant transfers. In contrast, bank or wire transfers usually take 1-5 business days. 
  • Weekends and holidays may slow things down if they fall within the transfer window. Planning ahead of these dates can help avoid delays.
  • Once Wise sends the funds, the receiving bank’s processing impacts the arrival time. Some banks clear payments quicker than others. 

Wise implements certain limits on international transfers to ensure compliance with regulations and prevent fraudulent activities.

The limits depend on factors such as the currency you’re sending, the payment method, and your account type.

Here’s a breakdown of Wise limits:

  • Daily transfer limit varies depending on the payment method (ACH: $15,000, Wire transfer: $1 million, Debit/credit card: $2,000).
  • Sending from your USD balance is up to $6 million.
  • Receiving limits vary based on the routing number.
  • Wise card limits apply, with transactions ranging from $200 (mobile wallets) to $2,000 (chip and PIN).

Check Wise’s website for the latest limit details specific to your region and account type.

How Does Wise Make Money?

If Wise uses real exchange rates (without markup), how Wise makes money is a valid question. 

Wise’s primary revenue comes from transparent fees charged on money transfers. Wise emphasizes transparent pricing as a key selling point and offers real exchange rates, low fees, and multi-currency accounts. This helps customers save money compared to traditional banks.

Wise transfer fees include a low fixed fee to cover transaction costs and a variable fee to cover currency exchange costs. 

This is typically around 0.43% of the transfer value for major currencies. Wise also charges a fee for receiving USD wire payments, which is a fixed fee of $4.14 per payment.

Here’s all about how Wise works.

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Benefits of Wise’s Exchange Rate Model

Wise’s exchange rate model offers several benefits to its users.

  • Wise provides the actual mid-market exchange rate, the same rate major financial institutions use to exchange currency. This ensures that users get a fair deal without hidden markups or unfavorable exchange rate markups.
  • Wise charges a small transparent fee for each transaction, which is displayed upfront, ensuring transparency and no hidden fees.
  • Wise’s currency converter is user-friendly and easy to use, allowing users to check the real exchange rate for various currencies in over 140 countries.
  • Wise’s multi-currency and borderless accounts make handling payments in various currencies easy, simplifying international business and personal finance.

Locking in the Best Wise Exchange Rate

Wise has various features or benefits to help users get the best currency exchange rate when transferring money internationally.

  • Real Exchange Rate
  • Wise uses the real exchange rate as the foundation for its currency conversion.
  • This rate is the fairest and most accurate reflection of the current currency value, as it’s free from markups or hidden fees.
  • Transparent and Low Fees
  • Wise provides transparent breakdowns of fees and exchange rates before initiating a transfer.
  • Transfer fees are kept low, contributing to cost-effective international money transfers.
  • Rate Alerts
  • Rate alerts notify users instantly when the exchange rate reaches a certain level.
  • Effortlessly stay updated on currency fluctuations, eliminating the need for regular manual monitoring and providing a hassle-free experience.
  • Guaranteed Rates
  • Guaranteed rates allow users to lock in an exchange rate for any amount they want to transfer during the processing period. 
  • For instance, Let’s say you want to transfer or convert USD to CAD. The real exchange rate is $1.3450 CAD for $1 USD. Assume Wise guarantees this rate for 48 hours. The exchange rate fluctuates during this period, but Wise ensures you receive $1.3450 CAD, regardless of market changes.
  • The guaranteed period is typically long enough for your money to get to Wise, and they will always tell you how long the rate is guaranteed.

Wise Exchange Rate: Frequently Asked Questions

The mid-market rate matters because it provides a transparent and markup-free benchmark for currency exchange, aiding businesses in setting accurate prices and facilitating cost-effective international transactions by allowing for bank rate comparisons.

Yes, Wise is safe. It employs security measures such as identity verification, two-factor authentication, and HTTPS encryption, has a dedicated fraud team, and complies with regulatory agencies in all operating countries.

Yes, Wise typically offers better exchange rates than banks by using the real exchange rate and charging transparent, low upfront fees, unlike banks which often add markups and hidden costs.

Final Thoughts

Wise stands out in the international money transfer market by offering mid-market exchange rates obtained by Reuters in real-time. The platform’s user-friendly tools allow easy access to live exchange rates, historical data, and personalized rate alerts with ease.

While Wise earns revenue through transparent fees, its commitment to cost-effective transfers and guaranteed rates further enhances user satisfaction and trust. 

By making Wise your go-to for cross-border needs, you ensure cost-effective transactions backed by transparent rates and user-friendly tools.

If you need more information on how to open a wise account step-by-step, check out this comprehensive guide.

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Author
Allen Morning
I'm Allen Morning, with a background spanning over 15 years in international finance and education from Harvard and Stanford. I founded Currenciap with a vision to demystify and streamline global financial transactions. My journey in finance has fueled my commitment to creating a platform that is both user-friendly and efficient, making international finance accessible to everyone. You can find more about me here.

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