By TERRY BOYD
London-based TransferWise just announced a partnership with Facebook Messenger … a deal expanding expats’ options when transferring money internationally.
Once upon a time, there were these quaint businesses called “telephone companies” and “banks.” Both were an important part of a consumer’s life, but they were separate and distinct … pretty much vanilla utilities you didn’t think much about.
In the age of digital convergence, messaging platforms are replacing everything from communications networks to financial services companies.
FB Messenger lets you send money to friends and family
Before, Americans could use FB Messenger to transfer money, but only inside the continental United States. Now, the deal with TransferWise enables FB users to send money to friends and families to/from the United States, Britain, Canada, Australia and Europe.
And it’s important to note … friends and families, only … the people in your FB contacts list. TransferWise makes accessible to businesses and banks APIs that allow them to use TransferWise for commercial purposes.
But you want to pay back the money you owe your sister, who’s holed up on Corfu for the summer while you’re in the Netherlands. (This is all strictly hypothetical, just so you know.)
Anyway, all you do is go to Facebook and the new TransferWise chatbot will walk you through the process step by step.
Ah, but first you have to create an account, which you can do here.
It’s secure … everything is Hyper Text Transfer Protocol Secure, meaning all communications between your browser and the website are encrypted.
Finally, you can set up exchange rate alerts on FB so you optimize transfers to other currencies.
Sending money internationally has always been a problem for expats
It took time, and the fees (sometimes hidden) were crazy.
We discovered TransferWise when we were living in the States, but racking up about 160 euros in two parking tickets and late fees in the Netherlands during a summer 2015 scouting expedition on the way to starting Dispatches.
When we went to our personal bank in Kentucky to transfer the money, we got a shock.
We found out the bank wanted to charge us more than the fines to transfer the money because we would have to pay fees at every step:
- Our U.S. bank is not in a financial center where customers need foreign currencies, so they would have had to buy the euros from a larger bank with a foreign exchange department.
- The larger bank would have charged our bank fees (passed on to us) for the transaction AND for the foreign currency purchase, adding at least a percentage or two to the real-time exchange rate.
- We would have been charged the actual foreign transfer fees.
- Finally, the receiving bank in Europe would have added their fees to complete the payment to the Dutch government.
Our bank’s fee alone was going to be $40 per transfer or $80 total.
So, 160 euros in traffic fines, and about $160 in foreign transaction fees for a total of about $346 at the exchange rate at the time.
Instead, we sent the money via TransferWise and paid a $3 fee per transfer, or $6 total in fees to pay those tickets!
How does TransferWise do it? Kind of like Airbnb and Uber. TransferWise digitally aligns parties on both sides of the transaction, finding someone or several someones who need to trade their euros for my dollars. The money, as it turns out, never leaves its country of origin, so you don’t need banks.
By the way, TransferWise gives you the real exchange rate, also known as the mid-market rate, instead of the bank rates, distorted by fees. The exchange rate is guaranteed as long TransferWise receives your money in 24 hours.
What’s the catch?
If you’re saying, “Gee, this is all too good to be true. There must be a catch.” Nope.
Some of the smartest investors on earth including Vikram Pandit, former CEO of CitiGroup, one of the United States’ largest banks, Silicon Valley VC Andreessen Horowitz and Richard Branson’s Virgin investment vehicle, Kima Ventures have invested in TransferWise.
TransferWise’s Facebook page is complete and it has actual people asking actual questions.