borderless™ vs. TransferWise: A Closer Look

comparison image between borderless and transferwise
borderless

borderless

The only US based international and local direct debit solution.

borderless™ vs. TransferWise: A Closer Look

6 MINUTE READ

Learn more about borderless™ and TransferWise, and how these two international payments solutions compare for you and your business.


borderless™ and TransferWise

borderless™ is a US-based global direct bank payment solution, and TransferWise is a UK-based global money transfer service.

borderless™ is a payment processor, while TransferWise is better described as a neo-bank. A neo-bank is a direct bank that operates exclusively online without traditional physical branch networks.

Wondering how are we similar? How are we different? Which one is the right solution for your business?

We’ll go over these two services in a number of key categories, including pricing, security, transfer time, types of transfers allowed, and more.

Check out our blog series about how borderless™ compares to other payment processing solutions like PayPal and Stripe.


borderless™ and TransferWise Comparison Charts >>>


Similarities Between borderless and TransferWise 


International Transfer of Money

Users of both borderless™ and TransferWise can make international money transfers without having to create a foreign bank account, not including signing up for the neo-bank that a TransferWise account entails. 

Unlike some P2P services like Venmo or Zelle, which only allow transfers between US bank accounts, both of these services allow for easy global payments.

Here is a list of all the 60 countries to which you can make payments using TransferWise. Similarly, borderless™ covers over 30+ countries and plans to expand to 80+ countries in 2021.


Secure & Trusted Payment Process

borderless™ uses bank-grade security protocols and highly sophisticated data encryption tools to keep your information and transactions secured

TransferWise similarly has a secure payment process, using “the latest Transport Layer Security to keep your data safely encrypted in transit and encrypt data at rest.”

Both borderless™ and TransferWise are trusted by financial institutions and banks worldwide, so you can rest assured that making transfers with both services is secure


Real-Time Payment Tracking

Another shared, useful feature of both is real-time payment tracking. 

Traditional methods of international money transfer like wire transfer are infamous for their lack of transparency. You never know where your funds are, which is disruptive for your cash flow in addition to being inconvenient and frustrating.

Both services offer real-time payment tracking that give you an estimated time of arrival and allow you to always know where your funds are, giving you peace of mind and allowing you to take better control over your payment process.


Fast Transfer Time

Both borderless™ and TransferWise allow for fast international payments with short transfer times compared to traditional bank-to-bank payments, which have to go through a long and opaque process.

When making payments on both platforms, you can expect the recipient to receive funds in 2-3 business days, which is a plus for your business’ cash flow.


7 Key Differences Between borderless and TransferWise

Although borderless™ and TransferWise share many similarities, there are a number of differences between them. Here are 6 of these key differences.


1. How Users Can Pay

borderless™ is a direct bank-to-bank payment processor, which allows users to pay with their bank via our direct debit (ACH) solution. borderless™ does not process credit/debit card payments or wire transfers.

borderless™ lets you keep your money where you trust it most, with your bank, while avoiding fees. Instead of creating an intermediary bank account, this setup allows for seamless integration without the hassle or bank fees.

This is in contrast to TransferWise, which is a neo-bank; signing up for TransferWise essentially entails creating another bank account that you or your business needs to manage.

As a neo-bank, TransferWise offers several options to make payments:  wire transfer, direct bank debit (ACH), and credit or debit cards. TransferWise also offers users the option to sign up for a TransferWise credit card that they can use to make payments both domestically and internationally.

While more options might seem intrinsically better, credit cards and wire transfers actually drive up the cost of making payments, increase transfer time, and exacerbate security risks for international payments. See the Pricing & Fees section below for specific information.


2. Types of Transfers

borderless™ handles both domestic and international transfers, while TransferWise just facilitates international transfers.*

Another distinction is that borderless™ is primarily a solution for business payments, while TransferWise is primarily a solution for individuals.

While you can create a business and personal account on both platforms, borderless™ specializes in business payments, whether business-to-business (B2B) or person-to-business (P2B) payments. 

Some examples from the suite of features for business payments that  borderless™ offers include automated international transfers, subscription payments, recurring invoicing, mass payouts, contractor payments, and more.

On the other hand, TransferWise focuses on person-to-person (P2P) payments, which borderless™ does not currently offer. You can still make payments as a business or to a business on TransferWise, however.

*TransferWise recently created a secondary account that allows users to hold money (a balance) inside the TransferWise system and make domestic payments, curiously called a “borderless account.” We wonder where they got that name from?


3. Pricing & Fees 

borderless™ and TransferWise have very different pricing models, so it is important for you and your business to understand this difference when comparing the two products. 


What You Are Charged For

With borderless™, making payments (with either a personal or business account) is always free. There is no fee for sending money domestically or internationally. You only pay a payment processing fee when you collect a payment however we do provide you the flexibility as a payor to take on the fees. This feature can be used if you are paying out contractors, vendors or payroll.

TransferWise has the opposite pricing model. Collecting a payment with TransferWise is almost always free*. However, TransferWise charges money for when you make a payment on their platform. It does not provide you with the flexibility for your business like borderless™ does.

*The only exception is collecting money via a wire transfer in USD, which comes with a fixed fee of $7.50 USD.


Actual Fee Comparison


borderless™

For both business-to-business (B2B) and personal-to-business (P2B) international payments, borderless™ charges a small fixed fee* that varies by country (e.g. $0.30 for the US, $0.60 for Australia) as well as a variable fee of 2%. International fees are capped at $30 USD or the equivalent in other currencies.

 This maximum is extremely helpful for payments larger than $1,500-$2,000 where the fee is fixed unlike other solutions that have uncapped fees.

Check out the borderless™ pricing page for more information relating to our pricing model.


TransferWise

In contrast, TransferWise charges a fixed fee plus a variable fee for each payment that users send. Both the fixed fee and the variable fee change depending on (1) the country to which the payment is being sent and (2) how the user elects to make the payment: direct debit (ACH), credit or debit card, or wire transfer.

This makes their pricing less transparent and less simple to calculate.

Fixed fees for sending wire transfers are bigger than the other options, and variable fees for sending a payment via credit card are similarly bigger. Businesses and individuals using TransferWise thus have several options when it comes to making payments as the fees vary greatly by payment method.

For example, for a credit card payment of $3,000 from the United States to Europe, TransferWise charges a fixed fee of $0.89 and a variable fee of 4.32%, which amounts to $124.69, for a total fee of $125.58 (not including currency conversion). 

But for a wire transfer payment of the same amount, TransferWise charges a fixed fee of $6.23 and a variable fee of 0.43%, which amounts to $12.82, for a total fee of $19.05 (not including currency conversion).

Check out the TransferWise pricing page for more information relating to their pricing model.



Direct Comparison

To directly compare the two companies’ pricing, consider a business payment of $10,000 from the United States to Canada. 

With TransferWise, using a credit card to pay, the total fee is $420.41. If you use a wire transfer to pay, the total fee is $53.05. Using ACH, the total fee would be $78.49. 
With borderless™, the total fee is just $30

No matter which payment method you choose on TransferWise, borderless™ is the more affordable option, with nearly double the savings if you pay via wire transfer and more than 14x the savings if you pay with a card!

*There are two types of fees that payment processors generally charge: fixed and variable. Fixed fees are usually small amounts that are charged for every payment, while variable fees are a percentage of the amount that is sent or received.



Currency Conversion

borderless™ does not charge users for currency conversion; it is included automatically for international transactions. We also offer volume discounts for businesses who collect or pay more than $1M USD annually giving you an even more competitive exchange rate.

TransferWise, on the other hand, charges a variable fee. for currency conversion when making an international payment. This fee depends on the currencies that are being converted and is constantly changing based on the mid-market rate. 

For example, converting US dollar (USD) to Euro (EUR) incurs a fee of 0.43%, while converting Euro (EUR) to Chinese yuan (CNY) incurs a fee of 1.13%. TransferWise’s pricing page provides the exact up-to-date exchange rate for all of their currencies.


4. Data Liability

borderless™ users do not need to collect or share bank information when making payments. 

However, when making payments with TransferWise, since it is a neo-bank, you must collect banking information such as SWIFT codes or IBANs when making payments.

This impedes the user experience and payment process as you have to manually collect and input that information, which is prone to human error.

borderless™ securely and automatically detects a recipient’s currency and retrieves banking information stored in an encrypted database. All you need to do is enter an email or “@Handle,” which is a unique identifier. 

This amounts to significant data security/liability risks that businesses are exposed to which might cost a hefty amount as a result of this exposure when using TransferWise.


5. Automated Payment Solution

Another key difference between the two solutions is that borderless™ allows for automatic local and international payments to automate subscriptions or recurring invoices while TransferWise does not.

borderless™ is built and designed for businesses, and we know that the ability to set up recurring payments is essential for many businesses.

TransferWise’s lack of this functionality is an important differentiating factor to consider. With this lack of automation, using TransferWise for international payments is a manual process that takes up unnecessary time for your businesses, which has a direct negative impact on your bottom line.


6. Mass Payouts Feature

Lastly, borderless™ allows users to make several payments at once with the Mass Payouts feature, while TransferWise lacks this feature. 

Businesses that conduct international commerce often need to execute many payments to both individuals (contractors, payroll, commission, etc.) and businesses, and if you can only make one payment at a time, this impedes the efficiency of the payment process.

borderless™ is thus more convenient than TransferWise when it comes to making several global bank payments at once with $0 wire fees, saving you time and money.


7. E-Commerce

As a payment processor and not a neo-bank, borderless™ offers users the ability to automate your account receivables and get paid in seconds.

Whether it is selling to consumers or businesses via e-commerce, borderless™ provides an e-commerce plugin that can increase businesses’ conversion rates and simplify the payment process for your clients. The funds are directly deposited in your bank account making B2B e-commerce easy, affordable and accessible for payments up to $500,000 USD. You can get paid immediately online or attach a payment link to a quote streamlining your sales operations.

TransferWise, as a neo-bank, does not have this functionality and cannot assist your business with conducting simple and affordable e-commerce.


Final Thoughts

borderless™ and TransferWise are two possible solutions for making and accepting international business payments. The differences outlined above demonstrate why we believe that our solution is the best for you and your business.

borderless™ is created by dreamers, for dreamers. That’s why we care about what matters most to your company: your bottom line, ease of use, and innovative features to boost your efficiency. 

Have specific questions about your business? Want to migrate from TransferWise? Talk to one of our payments experts today or email sales@getborderless.com.

It’s time for peace of mind with simple, cost-effective, and secure local and international payments. 

Get borderless.

For more information about specific differences between borderless™ and TransferWise, check out our helpful comparative charts below.


General

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Payments & Transfers

payments & transfers comparison chart transferwise


Capabilities

capabilities comparison chart transferwise

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