Revolut vs TransferWise

Who Would Win in the Low-Fee Fintech Tug of War?

When considering money transfer options, a lot of people and businesses prioritize equally myriad factors such as reliability, convenience, transaction cost, speed, and customer support. Each of these factors, in turn, is what online money transfer services like Revolut and TransferWise use to determine the features that they will offer in their respective platforms.

The two have a close rivalry, as both try to capitalize on offering cheaper than usual money transfer services, regardless of what currency you use. Upon brief inspection, there is not much disparity between the services offered by TransferWise and Revolut.

But in the end, like people, no two companies are ever alike. Below, we will conduct a deeper appraisal of each one, particularly the features they offer and the advantages they bring to the table as well as their corresponding downsides.

About Revolut

Revolut is a London-based fintech company that offers money transfer services. Now claiming to have over 4 million users, the platform initially targeted people who live abroad or travel regularly and need to use their credit cards frequently but want to pay lesser fees for it.

While the company does manage to deliver in that regard, one stark downside of Revolut is that they only seem to focus on their European clients and their platform is essentially available only in Europe. A clear proof of this is that they only let you hold 29 currencies, most of which are primarily European. This could prove to be very limiting, to say the least, for their users in general.

Virtually any type of money transfer method is available in Revolut and it offers cryptocurrency support as well, and their multi-currency card proves to be very convenient in this regard. Money can be transferred directly to your bank account with lesser fees, and you can also freely spend abroad without worrying that you are losing out on unsatisfactory exchange rates.

However, if your foreign exchange transactions go over $5000, fees rise to 0.5% and this can balloon to 1% if transactions are done during weekends. Some users also have qualms about its relatively low monthly free withdrawal limit of $200 and lack of a customer hotline.

The company is also not without its share of controversies. An article on Wired (https://www.wired.co.uk/article/revolut-trade-unions-labour-fintech-politics-storonsky), in particular, exposed its alleged shady hiring process. They actually required their applicants to promote their company, specifically noting that those who are able to drive in “200 or more signups” would be the ones that would be strongly considered for interviews. Many employees have also complained of the CEO’s Nikolay Storonsky’s treatment of them.

Even so, it is not for nothing that the company has since become one of the fastest-growing fintech companies in the U.K. And many actually attribute this rise to the company’s above-mentioned Machiavellian approach.

·       Revolut Fees

Adding money is free but if you use a card that is not supported by the EEA or use a commercial card to add money then they will charge a small fee for it.

When transferring to other Revolut users, there is no fee at all, but if you want to expedite transfers you have to pay $5. Fees also vary if you are transferring to bank accounts, and the charges are determined only before you decide to transfer. 

As said above, ATM withdrawals begin to get charged after you’ve reached the monthly limit. As much as 2% is charged for every withdrawal done thereafter. Revolut cards are free-of-charge but replacements and delivery fees apply to certain cases such as standard deliveries ($4.99), express deliveries ($11.99), and deliveries abroad ($19.99). The virtual card is provided without further costs but any additional card request costs $4.99.

·       Is Revolut Safe?

The platform is relatively safe to use as a money transfer service. However, if you are intending to move your entire money there, you may want to think twice because they don’t have any physical bank branches at all. They do have a European banking license, which they acquired in December 2018.

About TransferWise

Like its close competitor, TransferWise is also based in the U.K. However, it has noticeably been around longer. TransferWise comparably has better overall country coverage than Revolut, claiming that they can transfer to 50+ countries worldwide. Even if that is the case, they only let you hold 40 currencies in your account, but this is arguably still larger than Revolut.

While it does not limit itself to Europe like Revolut, a very limiting factor for businesses that mean to use TransferWise is that they appear to limit themselves to bank account transfers. Only a few currencies support debit and credit card options. And the fact that transfers require you to input your social security number turns off a lot of people. 

Even if its Borderless Accounts can mitigate the transfer option limitations to a certain degree, it still lacks some of the more convenient features offered by newer digital banks. It does not offer cryptocurrency support, for one. Their appeal largely hinges on their very low transfer fees and their exchange rate markups are very minimal as well. Their Borderless accounts are responsible for these low rates because they serve as a multi-purpose (and currency) tool that you can use to transfer and hold money in every currency as if they are being done in local bank accounts.

But plenty of its immediate benefits are overshadowed by the fact that Borderless Accounts only support a limited amount of countries and currencies. Charges are also applied if you make external transfers to the bank of your choosing, and there are also limits to the number of funds you can receive in your account. The debit card that usually comes with a Borderless Account is also only available for European clients.

·       TransferWise Fees

A lot of factors affect the fees attached to a fund transfer done in TransferWise. They consider namely the amount being sent, payment method and current exchange rate. Transfer fees increase based on the amount of money you are sending, while for payment methods, fees are primarily determined by what method you use (whether it’s bank debit, wire transfer, debit card, or credit card). This is why high-volume transfers are not recommended to be conducted on TransferWise. 

Credit and debit card fees applied to the limited number of currencies that support such transfers vary a lot per currency (with some fees going for as lows as 1.2% while others can charge for as high as 3.15%). Their fast and easy transfer feature is more expensive, though, as it entails more work to expedite the transaction.

·       Is TransferWise Safe?

The platform has no banking license at all. TransferWise guarantees their clients, solely in writing, that they store their money in a “low-risk financial institution”. It may work wonders in helping you save a lot on fees and getting better exchange rates, but it is certainly not recommended to use it as a platform to permanently store all your money in.