Transferwise introducing fees


(l8n.me) #1

Transferwise are introducing a fee to transfer funds back to a bank account, around 65p to a GBP account. Another reason a fee free offer from Starling could be a real winner.

https://transferwise.com/help/article/2888782/borderless-account/how-much-does-it-cost-to-send-or-withdraw-money-to-a-bank-account


(Jedihomer Townend) #2

The problem I see is that there is a fee somewhere, and ‘fee free’ looks like the company is covering this… then it gets to a point where it’s too expensive to cover this… Hence this decision by Transferwise, along with the debit top ups by both Monzo and Starling…


#3

I wonder if this will impact Monzo who use them - You’d assume so.

I’m gonna steal your photo and ask.

Edit - On further reading, and the lack of mental capacity on a Tuesday… I have no idea if it will impact Monzo at all.


#4

@LawrenceFerguson beat me to it with a half hearted attempt!


(l8n.me) #5

I don’t think it affects Monzo in any way immediately, it is purely about getting cash from your Borderless back to your Monzo say, more just that if one of the bigger players is struggling to make it work, i think longer term it may well affect how much they’d charge when they’re able to receive foreign currency, especially given we’ve seen how keen they are on their little per-transaction fees.


#6

Yeah, I think you are right.

It does bring up the elephant in the room though - When 3rd parties change their T’s and C’s, what do you do?

Perhaps I’ve just not been looking, but it seems an awful lot of FinTech companies are having to change their policies due to “unexpected costs”.

Is that bad planning? Or is it growing the customer base with low costs, before charging (and hoping most people stay)?


(l8n.me) #7

Dare i say it, this maybe where someone like Anne with legacy bank experience has an edge? As much as people like to decry everything traditional banks have ever done, while i’m sure there are examples, i cant really think of cases where they actively promote something as an anchor selling point then in a short space of time have to do an “Ooops, we’ve screwed this up and have to change things, fast.” as fintech players like Curve, Monzo and Transferwise have done. Things just tend to get phased out after some time, or are positioned as offers from the outset so are more of a disappointment than a point of anger when removed.


#8

I think it’s more an unrealistic expectation of how people will use their products. In Monzo’s case, in their mind, everyone wants to use Monzo for everything, but many of their customers just use it to withdraw cash and continues using their old bank for everything else, so Monzo loses out. Similarly with Transferwise, they think people will use the borderless account as a bank account and occasionally need to send money to others. Instead, people just use it as a transfer service, and immediately empty any funds they have in it.

Basically, I think several of these companies see these ‘fee-free’ features as a nice part of an overall package, which will entice users in. Instead, a lot of consumers just pick and choose the bits of different products that are good for them, leading to them using each service for the free bits, rather than the overall package.


#9

I think Transferwise seriously miscalculated the market if they thought their products would be adopted by people switching their current account - The whole travel element would put people off I would have thought - Despite it being a current account like anything else.

Monzo managed to move away from the “travel card”, because it was only 1 of a few USP’s at the time.

Can’t argue with what you are saying though - Clearly the older banks are still winning for most.

I’d say this was perhaps one of the pro’s to her experience - Possible unintentional in this case.

There are definitely times where doing things traditionally is better than trying to reinvent the wheel, but making it worse.

The only time I can think of where Starling have had to go back on something is the debit card top ups… Something I didn’t even know they had, and can’t quite work out why it was there in the first place.


#10

Yeah I don’t think they expected people to switch their current account. But I think they want people to use it in a similar way - ie. somebody sends me money in AUD, I leave it in there and spend it in AUD or exchange and spend in other currencies as and when required. For people working in different countries, it could be useful. In practice, I suspect people get sent money in another currency, then immediately send it all to their ‘real’ bank in their own currency (I know this is what I do).


#11

I’m exactly the same.

I don’t want money sitting in these currency accounts - Simply because I don’t use them enough.


#12

Got this email today;


#13

People sign up because something is free, people abuse it, I don’t mean purposely abuse it, but because its free compared to what they may have been using, people that will really make use of free transfers and withdrawals will be using it a lot. When you have a large customer base, you can offset those that use something a lot with those that don’t. The logical step, would be to launch with limits at the start, then you never have big users causing a problem for the company and it’s cost. However its harder to market something will limits at the start, so companies tend not to launch with limits.


#14

I had to go back and read the thread it was so long ago :joy:

I guess this is Monzo’s “bait and switch” argument all over again regarding the ATM fees.

You are completely right of course, but I kind of feel like there should be a middle ground somewhere (rather than everything completely free, or everything chargeable).

X amount of transfers per month for free, or a paid plan for those users who are really taking advantage of it.

But I don’t have the stats, and it doesn’t affect me at all, so I’m probably not best placed to comment.


#16

Has anyone used OFX or heard first-hand feedback about transferring money with them?


#17

I use the TransferWise debit card occasionally in UK, my income is mostly euros but I can live with the Mastercard rate +0.3%. Both TW & Revolut have saved me plenty over the last couple of years.


#18

Does it charge you at the mastercard rate for currency conversion? When you’re spending in euros in the UK


#19

Had to check back to 14 September when I last did a €/£ transaction £471.98 for tyres. Average rate on the day was 0.893 according to Google. Rate i got was 0.892 which is probably equal given the fluctuations during the day. Incurred a fee of €1.59 or 0.3%
Dave


#20

Wouldn’t it work out cheaper if you used Revolut for your foreign exchange (only on weekdays!) ?

You could receive Euros on Revolut Euro account, exchange them to British Pounds with no fees on weekdays at interbank rate, and send them to UK bank account with no fees.


#21

Wouldn’t it work out cheaper if you used Revolut for your foreign exchange (only on weekdays!) ?

Yes, it would have saved me the 0.3% fee but as I said I can live with TW modest fee and interbank rate. I do use Revolut a great deal but suspect I’m approaching my limit for the year - pity they no longer show that in the app.
Dave