Wise (formerly Transferwise) and Western Union are both very credible companies for transferring money overseas. When comparing the two, we realized Wise has better exchange rates compared to Western Union which offers a weaker exchange rate (higher than mid-market exchange rate). However, Western Union wins on cash transfers as Wise doesn’t offer cash transfers.
Wise vs. Western Union: Quick Overview
Wise, originally Transferwise, was started in 2011 by Kristo Käärmann and Taavet Hinrikus, two Estonian expats who realized they could save thousands of dollars when sending money worldwide and decided to share their knowledge with millions of others. Since then, Wise has grown to over 10 million users globally, with over £4 million in monthly transactions.
Wise offers real exchange rate and doesn’t markup on the exchange rate and offers very competitive fees.
Visit Western Union
Western Union was formed in 1850, making it one of the market’s oldest international money transfer companies. They executed over 800 million transactions in 2018 and have over 500,000 agent locations worldwide. To keep up with competition, the company has made steps to extend and upgrade its business model over the years, including the introduction of a free app for more convenient money transfers.
Money transfer providers, like banks, generate money in two ways: first, from the margin on which they buy currency at a wholesale rate, and second, from the higher-margin exchange rate sold to consumers. They also made an additional fee from the transaction fees they charge.
Wise provides currency to customers using the mid-market exchange rate, which is the rate purchased at wholesale. Instead, the corporation makes money by charging a fee for money transfers.
In the case of Western Union, the exchange rate varies greatly based on the currency, country, and payment method. On their website, you can use a price calculator to look up the company’s currency rates.
Before making a decision, compare the live exchange rates provided by each supplier.
Here are two methods for comparing rates from Western Union and Wise:
- View current rates at Western Union or Wise.
- Use Wise’s currency converter
Wise claims that its transfers will take no more than two business days to process, and that even two days is uncommon.
It also allows customers to pick between ‘quick and easy’ and ‘low-cost’ transfers, allowing them to prioritize time or expense.
Western Union can process transfers in as little as a few minutes or as long as a few days, depending on the complexity of the transaction.
For example, if you arrange a cash pickup or a mobile wallet transfer with Western Union, your transfer should arrive within minutes. A bank deposit as a payout method, on the other hand, can take up to two days.
Similarly, the form of payment you use can have an impact on the time it takes to send funds. Paying with a debit or credit card is often faster than, say, a bank transfer. Finally, your destination may have an impact on the length of your transfer.
When you use Wise’s currency tool, they make a point of being completely transparent about their fees, and they’ll offer you a breakdown of what you’ll be charged right away.
The costs you will be charged will vary depending on the following factors:
- The sum you’re sending is (the larger your transaction, the higher the fee)
- Your method of payment
- From where are you transferring the funds? (Fees may increase if you are sending money from other countries)
- Whether you choose a rapid (higher fees) or a low-cost (lower fees) transfer (potentially longer transfer times)
The company’s fees include a tiny percentage of the transfer amount, resulting in higher fees for bigger transactions, as well as a modest fixed fee that can vary based on whether you choose a rapid or low-cost transfer, as well as the variables listed above.
Western Union also imposes transfer fees, which vary depending on the following factors:
- The country to which you are sending
- The dimensions of the transfers
- Your method of transfer money
- Method of payment
- Whether you donate money online or through an agent
To give you an idea, arranging a cash pickup will be more expensive than a direct-to-bank transfer, while paying for your transfer with a debit or credit card will be the most expensive (but fastest). On their website, Western Union also has a tool that will show you the fees you should anticipate to pay for your individual transfer.
Ease of Use, Accessibility & Security
The Western Union website offers hundreds of different languages to make it easy for people to send money globally. Many consumers still prefer having a physical agent location to visit for assistance with transfers even though the website does offer the option of emailing or calling customer service.
The service does have an app that allows you to start transfers at any time of day or night, and it’s available on both iOS and Android, and it gets rave ratings for its ease of use and user-friendly features.
When you first register on the site, you will be taken through a series of processes to authenticate your identity. To prevent delays, it’s a good idea to set up and verify your account before you need to complete your transfer. Western Union has put in place Software Composition Analysis as part of its security procedures (SCA). This is a security layer that protects both payment booking and account access and manipulation by requiring customer verification. It’s an element of the security protocol known as two-factor authentication (or 2FA).
Although some users may encounter issues while using their platform, the platform does provide customer service via live chat, email, and phone. For making transfers on the go, the app is incredibly user-friendly and simple to use.
Wise features a two-factor authentication mechanism that provides a code to the user to authenticate a transaction before advancing. When the provider requests extra papers to authenticate your account (for example, if you are sending big sums), you may be requested to produce a photo ID, proof of address, or a photo of yourself holding your ID.
Pros & Cons
What We Like about Wise
- You will get the true mid-market pricing
- Transfer fees are low and clear
- Excellent user experience
- Excellent customer feedback on Trustpilot
What We Dislike about Wise
- Only a bank account can be used to transmit money
What We Like about Western Union
- Over 550,000 agent locations throughout the world provide cash pickup, as well as the ability to send and receive money in over 200 countries.
- Money can be transmitted by a variety of methods, including Western Union agent locations, the company’s website, mobile app, and over the phone.
- Consumers and organizations can choose from a wide range of services.
What We Dislike about Western Union
- It can be costly to send money to specific countries or to transmit cash at an agent location
- In some countries, not all channels are available
- The margins on exchange rates are unclear
Wrap Up: Wise vs Western Union–Which is Better?
Overall, Wise is our favorite of the two, but if sending money to your recipient in cash is a must for you, Wise isn’t an option.
Both of these companies are well-known and recognized in the money transfer market. They provide a safe service and a more cost-effective method of sending money abroad than most traditional banks.
When we compare the two, the distinctions are obvious. Western Union is most appealing because of its hundreds of agent locations around the world, which make cash pickups simple and convenient for millions of consumers. However, its charges are not competitive when compared to Wise, which provides a speedier service and a more user-friendly platform at a fraction of the cost.