Almost all businesses deal with cross-border transactions in today’s global economy. Especially here on the European continent, dealing with multiple currencies is a way of life. From freelancers to large corporations, receiving payments, sending money, storing money, and spending money in various currencies – with minimal exchange fees – is a huge perk. Accepting payments seamlessly in USD, Euros, GBP, and more will make the life of a freelancer, small business, or even large company significantly easier. And, as we’ll see in this Wise business account review, this platform is the perfect way to deal with multiple currencies in a cost-efficient and effective manner.
Wise Business Account Review: Who Is Wise?
Before getting into the details of this business account, it’s worth first delving into Wise, the company. After all, if you sign up for something for your business, you want to ensure that it is a trustworthy and legitimate place!
In 2011, two Estonia friends decided to build a better multi-currency solution for individuals and businesses. Taavet was the first employee at Skype and, at the time, lived in London but received remuneration in euros. Kristo worked for Deloitte and had an interesting scenario. He also lived in London. As such, he got paid in pounds, but he also had a property – a mortgage in euros back in Estonia.
Each of these friends had a somewhat unique but prevalent scenario here in Europe: they received income in one currency but had expenses in other currencies.
Traditional methods of exchanging money were laden with fees and unnecessary expenses. As such, these two friends decided to work out an arrangement. Taavet put euros into Kristo’s bank account back in Estonia, and Kristo topped up Taavet’s UK account with pounds. They looked up the real exchange rate to make the transaction as fair as possible.
Of course, both people got the currency they needed without all the fees of the banks. Then, a light bulb went off: they could do this at scale!
For over ten years, Wise has been moving money for customers worldwide. They have all the necessary registrations where they do business, including from the Financial Conduct Authority within the UK, all relevant state licenses in the US, and FINTRAC in Canada.
Wise isn’t going anywhere – it has a substantial user base and valid registrations. Any business owner can trust their money in Wise.
What Does the Business Account Provide?
Of course, being trustworthy is not the only important aspect of a Wise business account. Fortunately, the Wise business account offers numerous features that UK businesses regularly require. Here are the top three and how they can benefit your business!
Hold and Exchange Over 40 Currencies
Wise’s big attraction is that you can hold and exchange over 40 currencies in your account. However, as impressive as that may be, it sells the feature short a little.
Wise’s power comes from how seamlessly people can exchange these currencies and how inexpensive it is. Consider the following example. Suppose your business has a client in the EU that pays you in euros. Let’s say, for one job you did, you receive €1,000.
However, since your business is in London, your expenses are in pounds. Indeed, to do this particular job, you paid a local contractor £500.
The fee to convert euros to pounds on Wise is only 0.47%. In other words, you’ll exchange the two currencies at the mid-market rate, and Wise will take a mere 0.47% to make that conversion. At the time of this writing, the rate is 0.8756, so you’d get £871.50 from €1,000. After paying your contractor, you’d have £371.50 left.
By contrast, most banks have currency exchange rates somewhere around 3%. So, if you were to exchange your currency at Lloyds, for example, there’s an excellent chance that you will pay something along the lines of 3%, meaning that your €1,000 would likely only come out to about £845.60, leaving you with just £345.60 after paying your contractor.
Using Wise would mean you would have about £25.90 more at the end of the deal!
That might not sound like a ton of money but think about all the transactions you do. Saving 2% or so on currency conversions will add up fast! And in relative terms, you would get 7.5% more money after paying your contractor by using Wise (£371.50 leftover using Wise divided by £345.60 using Lloyds). That’s a pretty good saving!
Bank Details for 10 Different Currencies
If you do business in different countries, you likely know how valuable having a bank account in each country is. Having a bank account lets you pay employees or contractors like a local. It also enables you to receive payments from local businesses and customers.
Wise gives bank details for ten different countries. That means you’ll have a “local bank account” for USD, AUD, CAD, EUR, GBP, HUF, NZD, RON, SGD, and TRY. So, for example, if someone wants to initiate an ACH transfer to you in the US, you can give them Wise’s nine-digit routing number and an account number. Wise will then get the money and credit it to your USD balance!
Having these bank details is invaluable for businesses sending and receiving funds internationally!
Pay People Quickly and Easily
Lastly, you can pay international invoices, vendors, and employees with one click. You’ll pay the actual mid-market exchange rate plus a small transfer fee. Wise claims their transfer service is 6x cheaper than old-school banks and 19x cheaper than PayPal.
Part of what makes this service so exciting is that it’s easy to use. It is truly one click, and Wise’s excellent user interface makes the entire process a breeze!
Wise Business Account Review: How Much Does Wise Cost?
Wise has low currency conversion fees, as noted above. However, it’s also worth noting that Wise, as a platform, is incredibly low-cost overall.
There is a one-time setup charge of £45. This fee is necessary for Wise to process your account opening and get everything ready for you.
Sending and receiving money cost variable rates starting at 0.41% (pounds to euros is 0.47%, so just above this minimum amount).
It costs £3 to get a debit card, and there are no monthly fees. After March 1, 2023, Wise isn’t charging for monthly withdrawals of £200 or less. They do charge 1% for all amounts above £200, though. While 1% may seem small, if you primarily withdraw cash using an ATM using this debit card, that fee will become somewhat costly.
Holding currencies is free, but if you choose to invest with Wise, you’ll pay an annual fee of 0.55%. While not the cheapest option, it’s also not the most expensive. Many businesses will probably elect to move money from Wise into their share dealing accounts, especially if they already have them set up!
Lastly, receiving money into a business Wise account is free. However, receiving USD wires (and only USD wires, peculiarly) costs $4.14 USD.
All in all, Wise has pretty minimal fees. Indeed, you only pay for what you use, and even then, the prices Wise charges are often less than competitors!
Are There Any Downsides to Wise?
As with any platform, Wise is not perfect. Although this Wise business account review has focused on many positives, there are two drawbacks to using Wise for your business account.
The first drawback is that some currencies (not many) have restrictions for business accounts. The complete list is available here; however, the five currencies with some limits that are likely most relevant to UK businesses are CAD, USD, AUD, NZD, and INR. These currencies have fairly relaxed restrictions and should not pose much of a problem for most companies (some are just verification requirements). Still, it’s worth checking the list to ensure you can make the transfers you want using your new Wise business account once you open it!
The other drawback is that there is no in-person service. Wise operates entirely online. While this is ok for many digital businesses, if you have a business that receives cash, you won’t be able to head to a local branch and deposit your money (you can only withdraw cash at ATMs using your Wise debit card). Additionally, if you want customer service in person or have employees that don’t feel as comfortable interacting with accounts online, Wise might not be perfect for you.
Wise Business Account Review: There’s a Lot to Love About This Platform
As you can see from this Wise business account review, there’s much to love about this platform. Its multi-currency solution is pretty much unrivalled in the financial world, and that status will likely continue for some time. It’s also remarkably cost-effective, having some of the least expensive currency conversion rates of any provider – and certainly the lowest among all the major banks! And, of course, the website and app are well-designed and accessible, meaning that both you and your employees or contractors can navigate them quickly and with ease.
The bottom line is simple: the Wise business account is a fantastic way for businesses – especially small businesses – to reduce overall stress and costs when dealing with multiple currencies, including sending and receiving money across jurisdictions. A Wise business account is a must-have if you have a business that sells or makes payments across borders!