We all know that Elon Musk’s Paypal has cut into major banks’ businesses as far as merchant fees are concerned, but Transferwise a not-so-new kid on the block, is challenging all that with lower-than-banks’ sending fees and better exchange rates. If you are a merchant, business or just the average Joe, customer or client you now have more choices and better rates to choose from when sending or receiving money globally through Transferwise (borderless account) and Zoom. These are secure, reliable, tractable fund transfer conduits that are faster and offer competitive rates with less hassle.
Banks get over 5% in hidden costs while Paypal takes 2.9% plus 30 cents per transaction. There is also a 2-3 day wait. With Transferwise you are guaranteed better rates and next day withdrawal. With Zoom, a Paypal affiliate, you can withdraw the money almost instantaneously and there is no delay even during holidays or non-banking days at an exchange rate that is higher than Bank and Paypal rates. With Zoom you can receive money even at the mall. With Paypal and Transferwise, the money is deposited to your account and withdrawn at ATMs but you receive the money ahead and at a higher rate than Paypal.
Transferwise is actually a 7-year old British company and is considered one of Europe’s unicorns valued at $1.6B. Profitable since 2017, it counts among notable investors Richard Branson and Mitsui & Co, Ltd of Japan. However, the most interesting investor in this UK Fintech unicorn is Peter Thiel who has a £3.9m investment in TransferWise. Thiel was the first Facebook external investor and a co-founder of rival Paypal.
Transferwise uses the midmarket rate which is technically, in between the selling and buying rate. What this means is a higher receivable amount for you. If you are the sender, Transferwise also doesn’t add an extra fee on top of the amount you are sending. For instance, if sending $1000 to Europe, India or the Philippines, Zoom will charge $4.99 on top of the amount being sent. On the receiving end, the hidden fee is not as high as the 5% posted by banks but Zoom has a hidden fee amounting to 1.22%. Transferwise charges the receiver a straightforward fee of 0.9%.
Matteo Gamba, an Indian whose main line of business is Product Management and Online Marketing, has a side-by-side comparison of Zoom and Transferwise when sending and receiving $1000.
- Sender: Transferwise – $1000 (no fees); Zoom – $1004.99 ($4.99 in fees)
- Receiver: Transferwise – ₹66,655.09; Zoom – ₹66,430.00
Whichever you eventually choose, it looks like a better deal, especially in the light of high transaction rates and holding times. In fact, over at Trustpilot, users score Transferwise 9.6 and Xoom 8.7 based on:
- Exchange rate
- Ease of use
- Number of countries served
- Tools available ( online calculator for Zoom, and compare rates for Transferwise )
- The regularity of overseas transactions.
Registration to send money on Transferwise is a breeze – you can sign up using Google or Facebook as an individual, business or online seller. You can conduct business in various major languages and pay through debit card, a credit card, or an electronic bank transfer.
The biggest advantage of Zoom is that money can be sent and received through cash pick-up centers. This is by far the fastest route and allows you to receive the amount in the currency of choice. Both have apps that run on iOS and Android and deliver instant verification of money received by the payee to the payor.