Personal Finance

Transferwise - faster than a credit card payment

  • Last Updated:
  • Apr 23rd, 2019 6:29 am
Deal Addict
User avatar
Dec 13, 2016
4528 posts
4056 upvotes

Transferwise - faster than a credit card payment

I'm not whinging and it doesn't bother me.

Now that we have this out of the way, how is it possible in this day and age that a Forex transaction between 2 different countries shows up faster in my bank account than a credit card payment from the same country?

Of course, I am talking about cards issued by different providers than your bank. I am aware that payments from TD bank account to your TD credit card show almost instantaneously.
26 replies
Deal Addict
User avatar
May 31, 2018
1207 posts
3037 upvotes
SK
Is this along the same lines as I can receive a package in the mail from Hong Kong faster than one sent from 3 towns over? Some things are just amazingly efficient. Or, other things are just incredibly inefficient.

Although now that you mention it, even the wire transfers from Knightsbridge seemed incredibly fast. So I'm guessing for day to day stuff our banking system is working on the "hey, it works" principle and is probably quite inefficient.
Deal Expert
User avatar
Jan 9, 2011
19730 posts
28603 upvotes
Vancouver
Credit card payments in this country still use the very same daily clearance system that was put in place a half century ago for processing paper cheques. I look forward to the day when all payments are made through real e-transfers and are instantaneous, instead of an e-payment window dressing over the ancient clunky system that still forms the backbone of commerce here.
Deal Addict
User avatar
Jan 16, 2007
1941 posts
2357 upvotes
New Brunswick
Payments Canada is working on it, hopefully it goes well (ahahahahahahaha it'll probably still be a mess).
Banking: Alterna Bank (2.25%), Motive Financial (4.1%)
Investing: Qtrade Direct Investing
Spending: Scotia Amex Gold (6 pts/Sobeys, 5 pts/dining, 1 pts/rest), Scene Visa (1 pts)
Mobile: Eastlink 20GB Rollover ($39/mth)
Deal Addict
Dec 16, 2017
2542 posts
1049 upvotes
CND Brain & Hear…
Bill payment system in Canada is manually processed daily as @Kiraly said above.
*cut off time 6PM here and there.

TransferWise OTOH,
- If you pay them w/ a card online, yes it'd be quite fast. Direct debit, not so much.
- Fees: TW is no longer competitive given the new fee implemented on incoming bill pay and fees on withdrawal.
Give me a J. I'm a maniac and an African expert.
Deal Addict
Jul 15, 2009
3648 posts
3043 upvotes
dekvitaly wrote: Bill payment system in Canada is manually processed daily as @Kiraly said above.
*cut off time 6PM here and there.

TransferWise OTOH,
- If you pay them w/ a card online, yes it'd be quite fast. Direct debit, not so much.
- Fees: TW is no longer competitive given the new fee implemented on incoming bill pay and fees on withdrawal.
The incoming bill pay fee is bad, but what is a more competitive alternative? Haven't been able to find one. Worldremit and XE end up costing even more, even after the new TW fee.
Deal Addict
User avatar
May 31, 2018
1207 posts
3037 upvotes
SK
gbill2004 wrote: What does whinging mean?
Whining, snivelling, complaining etc.. More of a British term I believe.
Deal Addict
Dec 16, 2017
2542 posts
1049 upvotes
CND Brain & Hear…
bubak wrote: The incoming bill pay fee is bad, but what is a more competitive alternative? Haven't been able to find one. Worldremit and XE end up costing even more, even after the new TW fee.
I like Knightbridge (recently featured on Drangon's Dens)
Give me a J. I'm a maniac and an African expert.
Jr. Member
Jan 2, 2009
163 posts
48 upvotes
Ontario
dekvitaly wrote: Bill payment system in Canada is manually processed daily as @Kiraly said above.
*cut off time 6PM here and there.

TransferWise OTOH,
- If you pay them w/ a card online, yes it'd be quite fast. Direct debit, not so much.
- Fees: TW is no longer competitive given the new fee implemented on incoming bill pay and fees on withdrawal.
Can you please elaborate on that incoming bill pay and withdrawal fee you mentioned above? I have used TransferWise few times to transfer money abroad.
Deal Addict
User avatar
Aug 1, 2006
2716 posts
2392 upvotes
Toronto
dekvitaly wrote: I like Knightbridge (recently featured on Drangon's Dens)
Just compared online Knightsbridge to Transferwise to OFX
100,000 CAD buys 74,810 US for Knightsbridge, 74,295 US for Transferwise. and 74389 for OFX .
You think Transferwise is starting to increase their margins now that they have been in business for a while?
Deal Addict
Jul 15, 2009
3648 posts
3043 upvotes
Bull Dog wrote: Just compared online Knightsbridge to Transferwise to OFX
100,000 CAD buys 74,810 US for Knightsbridge, 74,295 US for Transferwise. and 74389 for OFX .
You think Transferwise is starting to increase their margins now that they have been in business for a while?
Where did you find Knightsbridge's rate online? I thought you have to call them for a quote.

(The converter on their homepage is not their actual rate. It's the mid-market rate that nobody will actually give you.)
Deal Addict
User avatar
Aug 1, 2006
2716 posts
2392 upvotes
Toronto
bubak wrote: Where did you find Knightsbridge's rate online? I thought you have to call them for a quote.

(The converter on their homepage is not their actual rate. It's the mid-market rate that nobody will actually give you.)
Oh, that's what I used, no wonder it seemed a lot better. It'd be simpler if they could just publish their rate online.
Deal Expert
User avatar
Dec 11, 2005
20134 posts
2962 upvotes
Just be thankful you are not in the US.

In the US, when you do an online bill payment, what often happens behind the scenes is your bank prints out a cheque and snail-mails it to the recipient company / agency.

Yes EBP payments in Canada are not zero-day, nor are they as fast as Interac e-transfers but they are far ahead of many countries. The payments system in Canada actually works pretty well overall. And Interac actually exists in Canada, so you don't have to rely on sketchy companies like Venmo to do the job that banks are supposed to do.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
Deal Addict
Jul 3, 2017
3859 posts
2814 upvotes
Bull Dog wrote: You think Transferwise is starting to increase their margins now that they have been in business for a while?
Definitely. Their fees for the transfers I do most have gone up twice in the last year.
Deal Addict
Oct 4, 2009
3590 posts
2953 upvotes
Montreal
Exp315 wrote: Definitely. Their fees for the transfers I do most have gone up twice in the last year.
Can you detail what fee increases have been implemented? I’ve never used them but have advised others to do so, wouldn’t want to steer them wrong and have a feeling some of them wouldn’t pay enough attention to notice the increases.
Wealthsimple Premium
Deal Addict
Jul 15, 2009
3648 posts
3043 upvotes
S5 wrote: Can you detail what fee increases have been implemented? I’ve never used them but have advised others to do so, wouldn’t want to steer them wrong and have a feeling some of them wouldn’t pay enough attention to notice the increases.
They've been going up and down. Here are the fees for some 500 CAD transfers to EUR that I've had in the past:
2014: $2.50
2015: $2.50
2017: $5.00
2018: $5.00
2018: $2.50
2019: $2.50
now: $5.70

So yes, $5.70 is the highest it's ever been, but it was $5.00 for a long time. If they hadn't lowered it from $5.00 to $2.50 in 2018, then it wouldn't seem like such a big increase now.

One thing about their fee structure is that it's very complicated, keeps changing, poorly documented, and the documentation is often out of date. They do tell you the total fee when you go to do a transfer, but trying to figure out the fee yourself from their documentation is almost impossible.

All that said, I haven't been able to find any place that's cheaper for the $500-$5000 range. If anyone knows of one, I'd love to hear about it.

Edit: OK, here's an example of their terrible documentation. Right now, on the front page, if you try to send 500 CAD to EUR, it tells you the fee is $8.75. If you go to actually do the transfer, you login, start setting up the transfer, and it turns out that the fee is really $5.70.

Edit 2: They used to not mention bill payments at all in their list of payment methods and bill payments were free. They now started listing them explicitly at $5.50. I haven't done a transfer since then to see whether they actually charge that fee, but presumably they do. Direct debit is cheaper than bill payment now.
Last edited by bubak on Apr 19th, 2019 9:14 am, edited 1 time in total.
Deal Addict
Jul 3, 2017
3859 posts
2814 upvotes
S5 wrote: Can you detail what fee increases have been implemented? I’ve never used them but have advised others to do so, wouldn’t want to steer them wrong and have a feeling some of them wouldn’t pay enough attention to notice the increases.
For example in May last year the fee for a $1000 transfer to Brazil went from $15.00 to $17.70.

Transferwise does (usually) send an email when they change rates that would have applied to some of your recent transfers.

They are still competitive with other methods, and they offer the great advantage of delivering the money directly into the recipient bank account by a local transfer. That avoids the extra delays, bank fees, and government taxes that sometimes apply to receiving foreign deposits in other countries.

Agree with @bubak about their documentation. For example this is the confusing response I got when asking about the most recent fee change:

"It is a bit hard to give you the exact fee. When you set up a transfer with us, we will calculate the fee based on the amount you send. However, we then deduct that fee from the total cost of the amount you want to send us. We then use the amount that is left over to base the actual fees on. This way, we don’t charge a fee on the total amount you send which includes the amount you pay for the transfer. We would just be charging you based on the amount you actually send.

This can be a bit confusing, but we do it so we can give you the lowest fees possible.

As mentioned before, we charge a rate for the method in which you pay in and the conversion fee depending on the transfer’s currency.

For CAD to BRL transfers, you will be charged 1.35% Fee of the amount we convert + $ 1.50 CAD flat fee for any transfer up to 175,000 CAD. This is outside of the borderless/balance section of your account. This is the conversion fee. You can find this information on our website for CAD to BRL transfers, here (link).

The fees for each payment method are as follows:
•direct debit: $1.75 + 1.60%
•bank transfer/online bill pay: $8.75 + 1.35% (this is what the website says, but it appears that for both there is only the flat fee of 7.25)
•debit card: $1.50 + 2.50%
•credit card: $1.50 + 3.10%

And you can find those here. (link)

If you want to use your borderless/balances to send funds, you can do that as well. This adds an extra step. However, to pay with the online bill payment feature would be free. When you send out a transfer from your CAD currency to a BRL account we charge 1.35% of the amount your convert from CAD to BRL, and then a flat fee of 7.70 BRL to pay out the transfer."
Newbie
Apr 2, 2019
77 posts
68 upvotes
I have used Transferwise to send money form the UK to Canada. Transferwise offer a great service and beat all UK banks and most online brokers. You can place a currency order with Transferwise and you have 24 hours to complete the order. If CAD suddenly weakens during the day, you can cancel the order and place a new order at the better exchange rate.
$1000 CAD will get $737.65 USD today. That includes all the fees of $11.92. PayPal will charge you only $3.99 CAD, but the exchange rate is lower giving you a net sum of $729.78 USD.
I have no problems paying higher fees to get a better exchange rate.

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)