- No monthly fees
- Really cheap transfers
- Ability to invoice customers
- Spend anywhere with no hidden fees
- Xero integration
- Business Mastercard
- Receive and hold 55+ currencies
Us freelancers are always in search of better, cheaper, and more convenient ways to get paid. For freelancers, TransferWise was one of the better-known options to get paid and since they went through a name change, we wanted to check in and see if anything else is changed. But first, here’s our short verdict:
Wise has to be added to your freelancing toolbox. If you don’t like to leave your hard-earned money on the table for the big banks to scoop up, a simple Wise application is a few clicks away. Their transparent fee structure will not leave you guessing.
2021 marks 10 years since TransferWise was founded by Estonians Kristo Käärmann and Taavet Hinrikus. And it’s in 2021 that this London-based company dropped the transfer from their name to become simply Wise.
TransferWise or Wise have shaken up the financial world quite a bit with their extremely low fees that are transparent and clear to the person sending the money upfront. In ten years, 10 million customers have used Wise to transfer money and save on extortionate big banks’ fees.
It’s no wonder Wise’s reputation has grown so strong, so quickly – they are great at spotting the shift in the way people are dealing with their finances, and creating a product that makes a currently complex scenario much simpler.
In this digital age, there’s no reason to let the big bank dinosaurs fleece us. So, why can Wise have these low fees and other banks can’t?
How does Wise work?
Have you ever heard of hawala? Hawala has existed since the 8th century and was a way to transfer money without actually moving money physically between hands. Instead, money was transferred via a network of hawala brokers who operated alongside the Silk Road and beyond as a way to fight against theft.
Wise works in a similar manner. The company itself has a bank account in multiple countries and when the person from another country is sending you money, the money doesn’t go straight into your bank account but rather the Wise-owned account in that country.
The money that you get is transferred to you from the Wise account in your country. No money had to “cross borders” and no extortionate fees had to be applied.
How to open a Wise Freelance account
Opening a Wise Freelancer account is straightforward and free.
To open a freelancer Wise account, you’ll need to go to their website and enter your email, password, and your country. You’ll also need to get verified by using a photo ID, proof of address, and a photo of you holding that ID.
Compared to opening an alternative currency account with a traditional bank, the whole process is incredibly quick and without the need to go anywhere.
Why is Wise so special (for freelancers)?
Wise lets you keep almost all the money that you get paid for doing that hard work like writing, coding, video editing, etc. There’s no need to give banks a cut. They have enough money as it is.
If that’s not enough, you get to spend this money online or in-store with a debit card in the currency of the country you’re buying from to save on conversion fees.
And the best thing is that the person sending you money doesn’t have to have a Wise account. You can even invoice clients or withdraw money from platforms like UpWork and Freelancer.com.
Not only are international payments much more convenient and cheaper with Wise, and multiple currencies easy to manage; there’s also a range of useful software included to help to track financials.
All this makes future business planning simpler, budgets much easier to operate, and ultimately helps businesses grow.
Wise for digital nomads
With access to 55+ currencies and local bank accounts, plus a debit card that’s accepted worldwide with barely any fees to pay, the Wise Freelancer account doubles up as a reliable banking solution for travelers and those living abroad like digital nomads.
Pros & cons
- No recurring fees
- Easy invoicing
- Free debit card
- Transparent money transfers
- Spend in any currency
- Receive money with low fees
- 2% fee for ATM withdrawals above £200
- £16 one-off fee to start receiving money
- Wise card not available in many countries
- Free account setup
- One time fee of £16/€23/$31 to start receiving money
- No monthly fees
- 0.40% annually to hold more than €70,000 in EUR balance
- Free debit card
- 0.33%-3.56% to convert a currency using your card
- Free ATM withdrawals up to £200/30 days, after that 2%
Although creating a Wise business account is free, if you want to start receiving money, you’ll have to pay them a one-off fee. The account itself has no subscription or monthly fees and you can get a business debit card to spend your money around the world, in person or online.
If you’re lucky enough to hold more than 70k in euro currency, you’ll have to pay a 0.40% annual fee. But Wise isn’t alone in doing that. Many other banks have introduced a fee for EUR accounts because interest rates are negative in the Eurozone and it costs them money to hold EUR for you.
For a complete overview of Wise fees, visit their website.
Wise business card
Freelancer account comes with a Wise Mastercard that is a debit card. Making card payments in the same currency as the account is free, otherwise, there is a conversion fee laid out on the website.
This is the same for ATM withdrawals, which come with an additional 2% fee once the monthly limit of $250/£200 is reached.
You can freeze and unfreeze your card if you misplaced it, get instant notifications when you spend, track your expenses in the Wise app, and set up maximum spending limits, or control payment methods like contactless and ATM withdrawals.
Invoicing and payments
With the Wise Freelancer account, it’s easy to invoice clients and withdraw earnings from freelance platforms like Upwork and Freelancer.com. This way, balances in different currencies can be added to the account without paying any conversion fees.
If there is a need to change currencies inside the account, Wise offers very competitive mid-market exchange rates.
There’s a discount based on your monthly volume of payments when you send amounts above 100,000 GBP (or equivalent in your currency).
If you have a couple of people working for you or you need to pay your subcontractors, for instance, Wise makes it easy to pay employees, contractors, and other colleagues. Both you and the recipient can avail of the real exchange rate and low transfer fees regardless of country or currency.
They also don’t need a Wise account to get paid. All you need is their email address or bank information.
Use the batch payments tool to create and send up to 1,000 payments with just one transfer by uploading a spreadsheet with the needed info.
How is Wise regulated?
Wise is regulated in different countries where it operates by government regulations and/or national banks. For instance, in the European Economic Area (EEA), Wise is regulated by the National Bank of Belgium (NBB) as an Authorised Payment Institution, with passporting rights across the EEA.
In the United States, Wise is registered with the Financial Crimes Enforcement Network (FinCEN), and in the UK it’s authorized as an Electronic Money Institution (EMI) by the UK Financial Conduct Authority.
Is my money safe with Wise?
Wise isn’t a bank and doesn’t hold a banking license in any country. It’s a fintech company that is registered with various governments as an e-money institution. There’s nothing bad with that. The main difference is that customers’ deposits aren’t insured by governments or schemes like FDIC and FSCS.
E-money institutions like Wise employ safeguards to keep your deposits safe if in case of their demise. Your money is kept in separate accounts in reputable institutions like Barclays and JP Morgan Chase.
Safeguards like these help keep your money safe in case Wise goes insolvent for some reason.
Wise has been around for more than 10 years and more than 10 million customers in 170 countries have used Wise. They also have around 115k reviews on Trustpilot with a score of 4.6. Their customers reportedly save $1.5 billion every year.
PayPal is a household name by now and arguably the way that most freelancers get paid. There’s a reason for that of course. It’s easy to sign up for and easy to use. Everybody knows about it so there are no awkward conversations between freelancers and clients.
It does charge much more for currency conversion when transferring money. If the transfer is in the same currency, then it’s free to use. It also has no monthly fees.
Revolut has become another household name in a short period of time. It’s a digital bank that’s easy to sign up for and offers business accounts for freelancers. You can get paid in a variety of currencies and spend your hard-earned money across the world like a local with their debit card.
Read more about Revolut in our review.
The bottom line
Millions have made the break from the 9 to 5 to take up freelancing for their main income. I know I have. Most of us use online platforms to get work from clients worldwide and receive payments in a range of different currencies.
Many traditional payment services for freelancers are clunky and expensive. Sometimes it’s quite complicated to figure out the standard fees of these services.
Thankfully for freelancers, including country-hopping ‘digital nomads’, Wise has launched a Freelancer business account, a cost-efficient solution for international multi-currency transfers.
It’s free to get an account, and there’s no monthly plan to pay for. The fees that Wise charges are clearly laid out and are far lower than high street banks for the equivalent service. Plus, Wise uses the real mid-market exchange rate when making conversions, unlike other payment service providers.
Adrian Volenik is a fintech enthusiast who loves testing and reviewing digital banking apps and financial products in general. How many digital banking accounts can one man have? Not enough, if you ask Adrian. As his wallet will soon explode if he doesn’t cut back on the number of cards.