Pros and cons
Gone are the days of hiding thick wads of cash in your luggage whenever you travel.
Fintech companies like Wise (formerly TransferWise) now make spending, sending, and receiving money across borders fast and easy.
Even better: Wise’s currency exchange rates are competitive, often even better than what you’ll find at the money changer. This makes it a good platform not just for travellers, but also those who frequently send money abroad or pay foreign merchants.
But is Wise really safe to use? Are there any catches or hidden fees?
We’ll cover those questions and more:
- What is Wise Singapore?
- How Does It Work?
- Why is Wise So Cheap?
- Wise Features and Benefits
- Comparing Wise with Other Multi-Currency Accounts
- Limitations of Wise Multi-Currency Account
What Is Wise Singapore?
Wise began as TransferWise in 2011, an online money transfer service based in London. They chose the name because their initial users were “wise” to recognise the hidden fees and markups of banks and traditional money transfer services.
Today, it’s a multi-currency platform with over 10 million individual users and businesses across the world.
In Singapore, Wise even helps users send and receive funds internationally via PayNow. This makes the service even more convenient for Singapore residents.
And of course, Wise is MAS-licensed as a major payment institution. No shady dealings here.
How Does It Work?
Wise uses a proprietary technology infrastructure to make international money transfers cheaper and more efficient than traditional players in the industry. Through Wise, you have the option of exchanging, holding, and spending foreign currency without bank charges or hidden fees — which can be anywhere from 0.3% to 20% (yikes!).
Wise’s vision is for users (no pun intended) to get the most out of every dollar instead of spending them on needless admin fees.
Wise offers real-time currency exchange data from XE, Google, and Yahoo on their website. You can also use the built-in calculator on the Wise homepage to calculate the exact fees and exchange rate upfront before you decide to make a transfer.
Wise has a mobile app that doubles up as a digital wallet. You can also request a physical debit card, which allows you to make purchases via Mastercard or Visa. This debit card also means travellers can withdraw up to S$350 cash per month from any ATM around the world.
Why is Wise So Cheap?
Wise uses mid-market rates to calculate its foreign exchange rates for users. This is the preferential rate that banks use when they exchange currencies with each other.
These rates are much better than what retail customers find at banks and traditional money changers because these middlemen usually mark up their prices for extra profits.
So how much are you really saving with Wise?
Say you want to convert S$10,000 for a family vacation. We did a quick check of how much you’ll get for various destinations. Here’s a sampling of how Wise compares to local Singapore banks (taken on June 2):
|Japan||829,299 Yen||820,546 Yen||819,202 Yen||817,261 Yen|
|Thailand||235,299 Baht||231,492 Baht||232,056 Baht||230,415 Baht|
* Note: We rounded to whole numbers for figures above 100,000.
On the surface, Wise certainly seems to have better rates. Let’s find out what else they have to offer.
Wise Features and Benefits
The Wise multi-currency platform enables you to:
- transact in 50+ different currencies whenever you travel or shop online with Wise’s preferential mid-market conversion rates
- get a Platinum Debit Mastercard® at an initial S$10 fee
- withdraw up to S$350 cash for free every month at any ATM around the world
- receive money in your local currency, provided you have a local bank account
- send and receive money with just a mobile number when you link Wise with PayNow
- pay businesses (and receive payments as a business) with just a Unique Entity Number (UEN)
We’ll elaborate on these below:
Transact in Over 50 Currencies
Ever trekked down to Change Alley in Raffles Place and pored over the dozens of money changer signboards to figure out the best rates? If you haven’t — lucky you. If you have, you no longer have to.
With Wise, you can quickly compare rates and complete transactions in 56 different currencies. Just apply for their debit card or download their mobile app and you’re good to go.
Mastercard Debit Card for Withdrawal and Shopping
Run out of cash while travelling? No worries. Whip out the debit card and pay for your purchase with the lowest mid-market rates. You can even use the card to withdraw up to S$350 per month at any ATM overseas — free of charge.
Receive Money in Local Currency
Wise ensures you’ll always receive payments in your local currency. This is great for digital nomads or freelancers working with overseas clients: Wise is a cheaper option than many other payment gateways.
PayPal, for example, charges 3.4% to 5.4% on top of additional fees for FX conversion and withdrawal to your local bank account.
One caveat: even though Wise supports 56 currencies, you can only receive money in 26 — and certain limitations apply for currencies like the Brazilian real, Euro, Indian rupee, the Turkish lira, and the US dollar.
Convenient Transfers Between PayNow and Wise
With over 4.5 million registered users in Singapore, PayNow is arguably the easiest way for peer-to-peer transfers and small business payments. Wise taps on that convenience by collaborating with PayNow so you can now make those same transfers across borders.
No need to remember those complicated SWIFT codes or long bank account numbers. All you need is your mobile number (or UEN if you’re a business).
Comparing Wise with Other Multi-Currency Accounts
|Types of Account||Account Fees and Minimums||Recurring Charges||Foreign Currencies Available|
|DBS Multi-Currency Account||S$7.50 per month if the average daily account balance falls below S$3,000|
S$2 account fee per month (for hardcopy statements)
|Service charge of up to S$7 per overseas withdrawal|
Prevailing FX exchange rates
|OCBC Global Savings Account||Minimum initial deposit of $5,000 for AUD, CAD, CNH, EUR, GBP, NZD, and USD||Free for overseas withdrawal|
Prevailing FX exchange rates
|UOB MightyFX||Just need to set up a UOB SGD base account||S$18 per year for the card; waived if you complete 12 transactions|
S$5 or equivalent for each overseas withdrawal
Free currency conversion
|Revolut||Membership – Standard is free, Premium is S$9.99 per month and Metal is S$19.99 per month|
Free Revolut prepaid card (Visa/Mastercard) – delivery charges may apply
|Up to 2% markup for FX exchange|
Free overseas withdrawal up to S$350 (Premium members up to S$700 per month and Metal Members up toS$1,050 per month)
|Wise||Free account that can hold 50+ different currencies|
S$10 for debit card
|0.35% to 1% for currency exchange transactions|
Free overseas withdrawal twice a month up to S$350
Free YouTrip prepaid card (Mastercard)
|Free for currency exchange transactions|
S$5 or equivalent for each overseas withdrawal
|Pay in over 150 currencies|
Supports in-app exchanges of 10 currencies
Wise vs Multi-Currency Accounts from Local Banks
A quick comparison in the table above and you’ll see several upsides to using Wise over Singapore banks:
- Flexibility: Wise doesn’t require users to hold a permanent account in the bank nor maintain a minimum balance.
- Cost savings: Wise doesn’t charge annual card fees, account service fees, or overseas withdrawal fees. Adding these charges to the well-known fact that banks have marked up exchange rates, Wise is definitely a lower-cost alternative.
Wise vs Revolut and YouTrip
- Flexibility: Wise can support 56 currencies in a single account, the largest number of currencies compared to Revolut and YouTrip.
- Cost savings: Wise, Revolut, and YouTrip all use mid-market rates, so there’s no winner when it comes to the best FX rates. Wise and Revolut have an edge over YouTrip with free withdrawal fees, but lose out with chargeable currency conversion fees.
Limitations of Wise Multi-Currency Account
Since Wise is regulated by the Monetary Authority of Singapore (MAS), this carries certain restrictions meant to protect you from fraud. Specifically, the Payment Service Act imposes limits on Singapore users on how much money they can send, spend, or hold in their Wise account.
For individual users:
- Not allowed to hold more than S$5,000 in your e-wallets by the end of the day Singapore time, inclusive of foreign currencies
- Not allowed to transfer more than S$30,000 from your Wise balance each year, including transactions on the Wise card, overseas transfers, payments to business accounts, and transfers to other Wise accounts. Sending money from your Wise account to your bank account, or to someone else’s private bank account in Singapore, does not count towards the S$30,000.
Make Wiser Fund Transfers
All in all, Wise is a great option if you’re:
- a casual traveller who likes globe-hopping but have no plans to stay in a foreign location for extended periods
- a digital nomad or freelancer who works with clients around the world
- working in a foreign country and have to send money back home (like to friends or family) periodically
And now that you know how the banks and money changers have been marking up their foreign exchange rates, don’t you think it’s time to give them a run for their money?