Western Union vs Wise (Formerly Transferwise)

Which one is cheaper option to send money?

Background

Western Union and Transferwise are two trusted and well-used money transfers services in the industry. But when it comes to remittance services, each customer has their own priorities and requirements. In this article, we’ll be comparing two well-known companies in the industry - Western Union and Transferwise.

A Western Union Overview

           

Western Union is one of the best-known and oldest money transfer services in the world. Money was still being sent on horseback when the company was founded in 1851! Since then, the company has grown and expanded to branches across the world, as well as fully online money transfer services. Western Union allows customers to send money to more than 200 countries worldwide. The company is best known globally for their cash transfers through the agent network. Branches are placed globally and customers can send money anywhere around the world!

A Transferwise Overview

Founded in the UK, TransferWise is an international money transfer service that enables customers to send money to more than 70 countries - completely online. Transferwise usually has great exchange rates that beat banks and competitors. They allow for easy transfers to bank accounts. The company is becoming a popular choice for customers to send money overseas. Transferwise also helps users to send money using their smartphone, tablet, or online through their website.

Western Union Payment Methods

Western Union has five different payment methods:

  • With the customer’s bank account
  • Debit card
  • Credit card
  • Cash
  • The limit of how much money a customer can send with Western Union depends on the individual’s transaction history of how much they’ve sent with the company in the past. It also depends on the customer’s location, the receiver’s country, and how the transfer is funded.

    The daily limit using Western Union’s website or app is $2,999 for most transfers. For the day following the transfer, the limit is $500. Transfers initiated over the phone range from $300 to $2,500 per day while sending money by initiating the transfer in person usually has no limit. On top of these limitations, some receiving countries may have limits on how much money someone can receive in a day.

    Transferwise Payment Methods

    Four options are available with Transferwise when funding a transfer internationally:

  • Credit card
  • Debit card
  • Bank account transfer
  • Wire transfer
  • TransferWise has a $1 million per day limit on daily transfers, making it one of the highest daily sending limits in the online money transfer industry. ACH transfers have a limit of $15,000 per day. $2,000 per day or $8,000 per week is the limit for using a debit or credit card.

    Transactions from an account with an address in Guam, Nevada, Hawaii, or the Virgin Islands, will have a daily $50,000 limit. Sending from these regions through an ACH transfer decreases the limit to $10,000 per day.

    Transferwise has the option of setting up recurring transactions through the TransferWise app. This allows customers to send money to other countries automatically.

  • The destination of the transfer
  • How the transfer is being funded
  • The much money is being transferred
  • Fees

    Western Union’s Fees

    Western Union’s fees may be fairly high while their rates are fairly low. Sometimes, customers need to pay up to 20% in exchange rate difference and various fees.

    The exact fees regarding how much customers will need to pay, depend on a variety of factors including:

  • The country where the transfer is being received
  • How much money is being sent
  • The method of funding
  • Other fees are dependant on the way the money is being sent, and how the customer is funding the transaction. Remitly users can send money their money either through an Economy or Express option. The economy option often has lower fees (including no fees for your first transfer) and better rates. The catch is that it takes three to five business days for transfers to send. With the economy option, some countries may not have a fee at all, but others may still have a fee of (usually) $2.99 CAD.

    In the case that the transfer is funded with a credit card, customers in Canada, Australia, and the United States will also be given a processing fee. Additional fees may also be charged directly by the user’s credit card company, but this is not Remitly’s decision - these fees are dependent on your bank’s policy.

    Other situations in which Remitly will charge you additional fees may include sending money to an international recipient, but they receive the money in a different currency.

    Express transfers have lower exchange rates and fees, but they happen almost immediately. This option is best for those who need their money to reach its destination in short periods of time. This fee starts from $3.99 CAD and only goes up depending on the country you are sending money to.

    Wise fees

    Wise is very transparent when it comes to charging fees. customers can expect to pay fees that depend on a variety of factors. These charges may be depends on:

    Exchange Rates

    Western Union’s rates

    Western Union often does not have the best exchange rates - they usually aren’t better than its competition. The rates are dependent on the country where the money is being sent to and how much money is being sent. Sending greater amounts of money provides customers with better rates.

    When sending money to developing countries, customers can expect better exchange rates in comparison to sending a transaction to Europe or the United States.

    Transferwise’s rates

    TransferWise’s rates are usually better or comparative when put against other similar services. The company has mid-market exchange rates. Rates are often comparable to those of banks. TransferWise also allows users to lock in exchange rates when sending money to certain countries.

    Depending on the recipient’s country, it may take between 24 and 48 hours for the transaction to process. The customer’s rate is secured from the day the transfer began. If the transfer is not fully funded by the end of the lock-in or security period, customers may be charged a mid-market rate. Though this may not necessarily be a bad thing - this rate rises and falls, so customers may pay more or less than expected from the initiation of the transfer.

    Security

    Western Union’s security

    Western Union has had over a century to build its safe and secure reputation - after all, it is one of the oldest companies in the money transfer business. The company is completely licensed to operate and is insured in multiple countries across the globe. It is very well known and trusted by the public.

    Transferwise’s security

    TransferWise is completely secure and reliable. The service is licensed and regulated by various watchdog agencies around the world. These agencies track and monitor TransferWise to ensure they are transparent about their purpose and fees while delivering on what they promise to do (deliver money to the desired recipient) without scamming its customers.

    Ease of use

    Western Union’s ease of use

    Western Union is very easy to use. Not only does it have over 550 000 physical locations worldwide at any customer’s disposal, but it also has an online platform and mobile apps making the company’s services accessible to anyone with an internet connection.

    Western Union offers a service that allows customers to pay bills to certain retailers, along with prepaid cards allowing customers to send and receive money easily, or directly depositing pay cheques onto the card. The card can even be used as a debit card at many retailers, allowing customers to make purchases. Western Union also provides business services. These services include paying employees, suppliers, and partners internationally. Along with accepting payments from foreign customers, and large global payments.

    Transferwise’s ease of use

    Transferwise is completely online. Customers are able to send money from anywhere in the world and anytime during the day - they just need to have a connection to the internet. Transfers can be done in just 6 steps! Overall, Transferwise is simple to use and accessible to nearly everyone.

    Conclusion

    To conclude, Western Union is a reliable service that has been in business for over a hundred years. Their multitude of locations makes them accessible globally. On the other hand, Transferwise may offer better rates and prides itself on transparency. Regardless of the decision that a customer decides to make, both options are reliable and safe. Customers should also consider other options when it comes to sending money internationally:

    Other Comparison

    Banks

    Banks are efficient and reliable. They have been the primary method of money transfers for billions of people for many years. This option is usually not the most convenient method for travellers because customers have to use a specific bank branch to transfer and receive money. Banks also usually charge higher fees than other online money transfers companies. This may significantly increase the cost of a transfer.

    Traditional Money Transfer Services

    Despite banks, specialized agencies such as Ria Money Transfer are often able to help customers transfer money with better rates and lower fees. These methods are often more affordable and convenient for customers.

    These services allow customers to walk into a location, hand over cash and send money to someone in another country. The recipient will then need to travel to their nearest agent store to pick up the money.

    This option is used all the time because many of these companies put restrictions on users regarding how they can send and receive money and the amount that can be transferred. They may also charge additional fees for transfers, thus driving up the price.

    Other Online Money Transfer Services

    Using the internet to send money opened the industry to a wider group of consumers. Online money transfer services are more convenient and efficient since customers can send money without leaving their homes. They also usually offer a wider range of payment and delivery methods with more flexibility.

    These online services do not have a high overhead in comparison to brick-and-mortar transfer companies and banks. They do not have to employ thousands of people, nor do they have to pay rent or maintenance costs for buildings. This is relevant since lower expenses and operating costs gives these companies the ability to charge lower fees and offer better rates for customers - making this option the most affordable for customers around the world. While the big and well-known companies such as PayPal and Western Union may not be the least expensive option, there are many start-ups and remittance services that are safe, secure, and cost less.

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