Michael

I am listing this as a trip report because if the topic comes up again, I can simply refer to my trip report to give my personal experience.

Over the years I’ve had to transfer money to France to pay for the cost of maintaining a house (repairs, taxes, utility bills). During that entire time, I used www.xe.com as a service, which was much cheaper than what Bank of America (my U.S. bank) would charge for an electronic transfer, and used my credit union account for the U.S. funds.

We sold the house and needed to transfer the considerable proceeds to the States. This is not as simple as sending from the States to Europe because the French bank (Crédit Agricole) said that it had to send the money on a bank to bank transfer and I could not do it myself as I did with the electronic transfers through xe.com (U.S. to Crédit Agricole worked fine). The result is that I would have to pay high fees because the French bank would charge fees, and the U.S. bank would also charge fees, or so I was told when I inquired.

Someone on this board mentioned www.Transferwise.com, and I decided to check it out. The whole system is different in that there is no actual transfer of money from one currency to the other. It took quite a few e-mails to figure out how I could do this, but essentially I requested a free transfer (there was a local charge of €3.80) of an given amount from my French bank to a bank in Estonia, and once that money was deposited in that bank, Transferwise had a deposit made in my local Credit Union account that did not involve an international transaction. I know this because I provided only local transfer, i.e. within the U.S., information from the credit union. There were limits to this type of transfer, which, at the going rate of exchange, was €30,000. For a higher amount I had to use a bank that did accept international transfers, but I did not want to use my American bank for that type of transaction, and I did not want the Crédit Agricole to initiate that type of transfer. The point was that a transfer within the Euro zone is done at no cost except the local charge.

I carried out a test transfer, discovered that it takes a while. First I made a request with Transferwise to transfer a certain amount. I then received instantly a notice from Transferwise that it was waiting for my deposit, and that notice included the banking information needed to make the deposit, which information I e-mailed to the Crédit Agricole, addressed <i>À qui de droit</i> because I had no name to use as a contact. The test transfer took more than a week, but then the agent at the local Crédit Agricole branch dealing with foreign customers established a direct contact and through her the process was reduced to a few days. Unlike xe.com where an electronic transfer takes place the same day, there is a lag time built in when using Transferwise; that is its one drawback. BTW Transferwise was extremely helpful in telling me how to establish this system; apparently it can be seamless when taking funds from the UK or Germany.

The cost: the exchange rate used is the daily one, plus or minus 3% but I have not seen such rapid changes between the euro and the dollar, and 1/2 a percent fee. Transferwise will give an estimate of how much one saves when using its system compared to normal bank transfers.

I do not know how secure one would consider the system when making a down payment on vacation housing. On the other hand, I transferred money directly into an account for my apartment rental in Amsterdam, feeling secure because it took several e-mails to get the proper bank information for a xe.com transaction. I would consider Transferwise to be as reliable and as secure. Where it would be definitely useful and secure would be in transferring money to pay for foreign traffic violations where it cannot be done with a credit card, or to transfer money as I was doing with xe.com, from my U.S. account to my French account or to a service provider such as the company that replaced my roof. My understanding is that Transferwise will accept a credit card payment from the U.S. My suspicion is that the Transferwise fee will be more than 0.5% when transferring money below a certain threshold, but that it still would be much less than what has been reported to be as doubling the cost when it comes to paying for traffic violations.

I used the example of U.S. dollars to euros because I am was involved with transfers between these two currencies, but Transferwise advertises that it deals with 17 different currencies.

Dukey1

and your capital gains tax will be how much?

Michael

<i>and your capital gains tax will be how much?</i>

That's between the IRS and me.

John

Kinda nosey there aren't you DUKEY

annhig

Transfers within Europe are now much easier thanks to recent EC legislation.

As you discovered Michael, the problem comes with extra-european transfers.

I think that you were brave to do a transfer via Estonia!

Kathie

I agree, Ann. I was following along with Michael's account until I came to the part about transferring the money to a bank in Estonia, at which point my alarm bells went off.

Michael

I also had some reservations, which is why I did a test run with a relatively modest sum. Estonia is in the euro zone and the owner of Virgin Airlines is apparently a major investor. I did five transfer with them with absolutely no problems except for the fact that there is no automatic on-line way of getting the funds out of the French bank.

Rubicund

There is an explanation of how this scheme works here:

http://blog.unibulmerchantservices.c...ney-transfers/

However, there is doubt expressed at the end of the article about its long term prospects. You wouldn't want to have a transfer in process when it went down.

Michael

<i>However, there is doubt expressed at the end of the article about its long term prospects. </i>

The article was written two years ago and the theoretical problem of uneven exchanges is unlikely to be one unless Transferwise cornered the market on money exchange. At any rate, it worked for me, and can only suggest that those who need to transfer money check it out if they are unhappy with the current charges they have to pay.

Michael

For those who want more information about TransferWise:

http://dealbook.nytimes.com/2015/01/...es-58-million/

Rubicund

Forgive me for remarking Michael. Why are you pushing this so hard?

Cathinjoetown

We will be facing this if we sell our French house.

Michael, did you obtain a quote from Crédit Agricole to transfer the proceeds? Was it outrageous? We happen to bank with them as well.

Theoretical for us at the moment, but we may sell in a year or so.

Thanks.

Michael

Crédit Agricole was vague about the charges, but insisted that it had to do the transfer itself--I would give the information and they would carry out the operation from bank to bank. But that meant that we had to involve our U.S. bank, and BofA told us what they would charge for converting the money, and that represented a 4% or 5% charge. CA will charge 3.80€ per transaction when using TransferWise. Try TransferWise, it lets you know how much you saved approximately from a standard bank transfer, and I believe them because a bank will never charge only half a percent per transfer.

I avoided a U.S. commercial bank involvement by transferring less than $40,000 at a time.

Michael

My last experience with Transferwise:

I received a surprise bill last week related to the sale of the house. The bill is legitimate, it just fell through the cracks. I tried to transfer money using Transferwise, but it turns out that it can only accept a defined amount on the withdrawal side, it cannot give a precise deposit amount because of currency variations and their fees. Since the bill was for a specific amount, I did not use Transferwise, but used xe.com where I was charged 2% above the current exchange rate (it kept on dropping by pennies as I was checking out what I would be paying) for a deposit on the exact amount in euros as requested.

I would still recommend Transferwise for transferring general amounts, but not where the deposit is a fixed amount. It is less bureaucratic than xe.com.

tedgale

Bookmarking for the time I buy my castle in Spain.

{Unfortunately, with the lousy value of our Canadian dollar these days, I am likely confined to something no more glamourous than "ma cabane au Canada"}

Michael

"qui se trouve au fond des bois"

mlah

Have you tried www.usforex.com

Michael

No. It probably is similar to xe.com which I would use if I had to send a specific amount in the foreign currency, such as a fine. I would use Transferwise if the amount of the foreign currency need not be specific, such as adding to a foreign bank account to subsequently pay bills such as taxes and utility bills if owning a house abroad.

windform

I am currently trying to find out if there is any seller risk involved when using transferwise. For example, if I want to sell something from the US to China to a stranger, i wouldnt use paypal because of the chargeback risk i would face. Is the money the buyer puts up nonrefundable once i receive it?

Michael

I believe that Transferwise is only a money exchange entity and would not be involved in any guarantee in regard to goods purchased.