Is XE or TransferWise Better? A Detailed Comparison for Money Transfers

When it comes to transferring money internationally, choosing the right platform can make all the difference. With so many options out there, it’s easy to feel overwhelmed. Two popular names that often come up are XE and TransferWise (now known as Wise). Both claim to offer competitive rates and reliable services, but which one truly stands out?

I’ve spent time comparing these platforms to see how they stack up in terms of fees, exchange rates, and overall user experience. Whether you’re sending money to family abroad or paying for services overseas, understanding the strengths and weaknesses of each can help you make the best choice. Let’s dive into what sets XE and TransferWise apart so you can decide which one suits your needs better.

Overview Of XE And TransferWise

XE and TransferWise (now Wise) are two widely-used platforms for international money transfers. Both offer unique features, making them appealing for different user needs.

What Is XE?

XE specializes in foreign exchange and international money transfers. It provides access to currency conversion tools, historical exchange rate data, and low-cost transfer services. Established in 1993, XE has a strong reputation for reliability and wide currency support. It supports transfers to over 170 countries with no upfront transfer fees, relying instead on slightly marked-up exchange rates to generate revenue.

Examples of XE’s features include a multilingual website and a dedicated mobile app for Android and iOS. Its exchange rate tracking tools let users monitor fluctuations before making transfers, which benefits those sending large amounts.

What Is TransferWise?

TransferWise, rebranded as Wise, focuses on transparent and low-cost international transfers. Established in 2011, it uses mid-market rates with fees disclosed upfront, ensuring no hidden costs. Wise operates in over 80 countries and supports more than 50 currencies, making it ideal for personal and business needs.

Key features of Wise include borderless multi-currency accounts, debit cards for spending abroad, and tools for recurring payments. Wise aims to match recipients with senders locally to reduce transaction costs, which speeds up transfers and avoids intermediary banks. Examples of its use cases include freelancing payments and tuition fee transfers.

Key Features Comparison

Comparing XE and Wise highlights differences in their core offerings, including exchange rates, fees, transfer speed, and security. Here’s a detailed breakdown under each category.

Exchange Rates

XE applies a small markup to its exchange rates, making them slightly less favorable than mid-market rates. This markup varies based on the transaction amount and currency pair. For example, users exchanging popular currencies like USD to EUR often experience a lower markup compared to exotic currencies like INR to ZAR.

Wise offers real mid-market exchange rates without any markups. These rates update frequently, ensuring users benefit from accurate, real-time rates. Using mid-market rates ensures cost transparency and better value for users, especially for larger amounts.

Transfer Fees

XE doesn’t charge fixed transfer fees but incorporates its revenue into marked-up exchange rates. Small transactions might incur higher proportional costs due to the exchange rate markup. For example, sending $100 may have a less favorable rate compared to sending $10,000.

Wise charges upfront fees that depend on the transfer method and amount. Bank transfers are cheaper, while debit and credit cards incur slightly higher fees. Its clear fee structure, even for small transfers like $50, makes Wise easier for budgeting.

Speed Of Transfers

XE typically completes transfers in 1-4 business days. Factors like destination country, payment method, and local banking hours affect processing times. Transfers using bank accounts may take longer compared to digital wallet payments.

Wise processes most transfers within one business day, with some reaching recipients in minutes. Speed variations also depend on the sender’s payment method and the recipient’s bank. For example, transfers to countries with strict regulatory checks might experience delays.

Security Measures

XE uses encryption, two-factor authentication (2FA), and secure servers to protect user data. Its adherence to region-specific financial regulations further ensures transaction safety. Licensed in multiple countries, XE provides users with regulatory compliance assurance.

Wise employs end-to-end encryption, fraud detection systems, and 2FA for account security. As a regulated financial institution, Wise complies with global and local payment laws, safeguarding millions of transactions annually. For instance, Wise’s verification process ensures legitimate account ownership before completing transfers.

Pros And Cons Of XE

Comparing XE’s money transfer services with other platforms, including Wise, reveals distinct advantages and drawbacks. Understanding these helps evaluate whether XE is the right choice for specific transfer needs.

Advantages Of XE

• Wide Coverage: XE enables transfers to over 170 countries, supporting various currency pairs like USD to INR or EUR to GBP.
• No Upfront Fees: XE incorporates its costs into exchange rate markups, ensuring users don’t pay fixed service fees.
• User-Friendly Tools: Its app offers exchange rate tracking, currency converters, and historical rate data, enhancing usability.
• Multilingual Support: The website and app support multiple languages, catering to diverse global users.
• Secure Infrastructure: XE employs data encryption, two-factor authentication, and complies with financial regulations.

Disadvantages Of XE

• Marked-Up Exchange Rates: While there are no fixed fees, the exchange rates include a markup, increasing total costs compared to mid-market rates.
• Slower Transfers: Transfers often take 1-4 business days, longer than Wise’s typical 0-2 day timeframe.
• Limited Payment Options: XE primarily supports bank account payments, offering fewer flexibility options than Wise’s debit cards or multi-currency accounts.
• No Transparent Pricing: The absence of upfront fees can make it difficult to calculate exact costs before initiating a transaction.
• Higher Costs for Small Amounts: The proportional effect of marked-up rates tends to impact smaller transactions more significantly.

Pros And Cons Of TransferWise

TransferWise (Wise) is known for its transparency and affordability in international money transfers. Here’s a closer look at its advantages and disadvantages.

Advantages Of TransferWise

1. Transparent Pricing: TransferWise provides upfront fees and mid-market exchange rates with no hidden charges, making it easier to calculate transfer costs.
2. Fast Transfers: Most transfers complete within one business day, and in some cases, funds arrive in minutes.
3. Wide Currency Support: The platform supports over 50 currencies and operates in 80+ countries, catering to diverse user needs.
4. Multi-Currency Accounts: The borderless account allows users to hold, send, and receive money in multiple currencies without conversion costs.
5. Debit Card Access: TransferWise offers debit cards linked to multi-currency accounts for spending and withdrawing cash abroad at real exchange rates.
6. Low-Cost Small Transfers: Unlike platforms with higher proportional costs for smaller amounts, Wise remains cost-efficient for low-value transfers.

Disadvantages Of TransferWise

1. Limited Country Availability: TransferWise doesn’t operate in as many countries as some competitors like XE, potentially limiting use for some destinations.
2. Transaction Caps: Maximum transfer limits vary by currency, which may restrict larger transactions for high-value cross-border transfers.
3. No Cash Pickup Option: Funds can’t be collected in cash, as they’re sent directly to recipients’ bank accounts or stored in multi-currency accounts.
4. Dependent on Local Clearing Networks: Transfer times may vary based on local banking systems, causing delays for less commonly used corridors.
5. Fixed Fees for Small Transfers: While overall costs are low, fixed fees may represent a higher percentage of small transfer amounts.

These factors highlight where TransferWise excels and where it may fall short, helping users decide if it’s the right option for their international transfer requirements.

Who Should Use XE Or TransferWise?

People selecting XE may prioritize comprehensive currency exchange tools and transfers to over 170 supported countries. It’s ideal for users managing larger transactions, given its no upfront fees and the ability to send money in bulk. Businesses looking for cost-effective international payments or individuals tracking historical exchange rates might benefit most.

Users opting for TransferWise often prefer transparent pricing and fast transactions. It’s particularly suitable for freelancers, students paying tuition abroad, or anyone managing recurring payments. Its borderless account enables users to hold and convert over 50 currencies, making it practical for those frequently transacting across borders.

Frequent small-amount senders might save more with TransferWise due to fixed low fees, while XE is better suited for larger amounts. If country coverage is a priority, XE supports more destinations than TransferWise. However, TransferWise’s speed and transparent fees make it ideal for cost-conscious users prioritizing efficiency over broad reach.

Conclusion

Choosing between XE and Wise comes down to your specific needs and priorities. Whether you value transparent pricing, speed, or extensive global coverage, both platforms offer unique advantages. By assessing your transfer requirements—like transaction size, destination, and frequency—you can decide which service aligns best with your goals. Take the time to compare their features and choose the one that ensures your money moves efficiently and cost-effectively.

Frequently Asked Questions

1. What is the main difference between XE and Wise for money transfers?

XE focuses on wide coverage and offers tools like exchange rate tracking, while Wise emphasizes transparent pricing and low fees. XE uses marked-up exchange rates with no upfront fees, whereas Wise uses mid-market rates with upfront costs, making it easier to budget.

2. Which platform is faster for international transfers, XE or Wise?

Wise generally processes transfers faster, often within one business day, while XE takes 1-4 business days depending on the destination and payment method.

3. Who should use XE for money transfers?

XE is ideal for users handling large transactions, businesses needing foreign exchange tools, and those sending money to over 170 countries.

4. Is Wise better for small-amount transfers?

Yes, Wise is better suited for small-amount transfers because of its low fees, transparent pricing, and use of mid-market exchange rates.

5. Does XE have upfront transfer fees?

No, XE does not charge upfront transfer fees. However, it incorporates its fees into marked-up exchange rates, which can make small transactions more expensive.

6. Can I create a multi-currency account with XE or Wise?

Only Wise offers multi-currency accounts, allowing users to hold, spend, and receive money in various currencies through its borderless account service.

7. Which platform is more transparent about costs?

Wise is more transparent, as it provides upfront fees and uses mid-market exchange rates without markups.

8. Does XE or Wise offer faster transfers for specific use cases?

Wise typically provides faster transfers for personal payments or freelancing, with some transfers completed in minutes. XE may be slower but is reliable for large, planned transactions.

9. Are both XE and Wise secure?

Yes, both platforms prioritize security, with encryption, two-factor authentication, and compliance with global financial regulations.

10. Which countries do XE and Wise support?

XE supports transfers to over 170 countries, while Wise offers services in 80+ countries with support for 50+ currencies. Wise has a slightly narrower reach but is excellent for supported regions.

11. Do XE or Wise allow cash pickups?

No, neither XE nor Wise currently offers cash pickup options. They focus on bank-to-bank and digital money transfers.

12. How do XE and Wise handle exchange rates?

XE applies small markups to its exchange rates, while Wise uses real mid-market rates without markups, ensuring cost transparency.

13. Which platform is better for recurring payments?

Wise is better for recurring payments due to its transparency, speed, and tools for managing regular transfers efficiently.

14. Are there transaction limits for transfers on XE and Wise?

Yes, both platforms have transaction limits. Wise has caps based on the country and currency, while XE’s limits may vary based on specific transaction details.

15. How do I decide between XE and Wise?

Choose XE for large transactions, currency exchange tools, and wider country coverage. Opt for Wise if you prioritize transparency, low fees, and faster transfer speeds, especially for small or recurring payments.