Doing business abroad is great, isn’t it? You get to travel to exotic locations, meet interesting people, and work on projects you might never find here in the UK. When all your hard work is done, though, and it’s time to get paid, the banks like to make it as hard as possible. Not only that, they charge you for the privilege.
Last year we took a close look at the best banks for doing business abroad – but now we’ve found something better. TransferWise is a startup based in London offering transfers between most European currencies (and soon US Dollars too). Using a clever crowdsourcing system TransferWise is able to offer mid-market exchange rates (the rates used by the banking system internally) to their users, instead of the lousy consumer rates banks usually offer. They also only charge a flat €1 transaction fee, plus a small percentage for transfers greater than €300.
How much will this save me?
Let’s look at an example. Say I was being paid by a company in France for work worth €1,000.
The EUR to GBP exchange rate offered through the banks at the time of writing is about 0.7761, so I would end up with £776.10, minus whatever the bank would charge for the transfer (usually around £10).
Through TransferWise, however, I get a mid-market rate of 0.8042. This means I’ll get £804.20, minus TransferWise’s fee of €4.48. So, basically, I’m paying lower fees and getting a better exchange rate. Winner!
All in all I’ll have saved around £32.30, and the entire process can be completed through TransferWise’s rather elegant online system.
I want to give it a try!
Great, because we’ve teamed up with TransferWise to offer all Freelance Advisor readers zero fees when they make their first currency transfer! Just click the link below to get started.
You can read more of my thoughts on TransferWise here.