Needing to transfer money when I was travelling, used to be such a headache. Actually no, make that a migraine. Dealing with exchange rates, transfer fees and I.D for this, proof of address for that. Ugh.
When I went on my first backpacking trip alone to Australia, I had a small loan in the UK I was still paying off.
I first started using the general ”international money transfer’ facility available with my bank. But it took so long to transfer, the fees were horrendous and sometimes I’d send one amount and a totally different amount would arrive.
Luckily I’ve always had my awesome Nan to help out with bank shenanigans back home. I have a ‘third party authorisation’ on my account and I highly recommend getting this setup before you leave.
What to tell your bank
Go into any bank and tell them you’re going travelling overseas and tell them you want a ‘third party authorisation’ set up on your account, whilst you’re travelling.
It’s free to set up, all you need is to fill out one form and get a signature from the person you want to look after your account. That person can then have authority to check your account, pay money in/out, modify payments & direct debits and request statements.
The other thing I recommend doing is placing a ‘travel marker’ on your account. This is a service most banks offer, so the bank are aware you are travelling and ensures they don’t suspend your card for suspicious activity – like when you book a camel trek in China then buy a 7/11 cheese toastie in Thailand, 3 days later.
The ‘third party authorisation’ person can also renew this travel marker for you, whenever it runs out, for as long as you’re travelling.
Transfer money with your bank
When I was making plans to go to Australia for my 2nd year on a student visa, I needed to transfer money for my tuition fee’s into the college’s business account. I couldn’t get a Confirmation of Enrolment until I’d got proof of payment and I couldn’t apply for my student visa until I’d got the Confirmation of Enrolment.
It should have been a simple process, but Barclays managed to screw it up royally.
At the time, I was working full-time at a call centre, saving like crazy trying to get to Australia again. I hated the job and had to spend my entire commute to work one morning yelling at the bank down the phone, who had by their own admission – lost my money.
They said ‘due to human error’, the transfer had been done incorrectly and lost my money temporarily, but of course were going to get it back asap. “How the f*** does a bank lose $5,000 dollars?!” I hissed down the phone, exasperated that this idiot was holding up my entire visa process.
The bumbling, apologetic replies came in the form of excuses such as; incorrect input of account details, other banks along the transfer chain taking their cut. Sorry, sorry, sorry…
Grrr. Hulk angry.
Eventually I got my money back. And it was sent correctly on the second try plus I got a full refund of the money transfer fee as an apology.
But the whole experience left me thinking “there must be a better way than this”.
Transfer money with MoneyGram or Western Union
After moving to New Zealand in 2013, I just resorted to sending money back to my UK account using Moneygram or Western Union once a month.
But the transfer fees were still so high and because of the currency exchange conversion plus the fee my bank took to receive it; the amount I sent would end up not being enough. Then there’d have to be a small but annoying make-up payment before my loan payment was covered.
It was all so frustrating, expensive, time-consuming and unfair that I had to bother someone else to sort out bank issues. But I’d tried them all, Moneygram, Western Union, Bank International Money Transfer and Telegraphic Transfer.
Then one day whilst browsing a New Zealand Backpackers group on Facebook, I saw a comment that ultimately changed the way I transfer money. And saved my sanity.
Transfer money with Transferwise
Behold Transferwise is here!
The post I saw was a ‘money transfer whilst travelling’ question and the reply comment was “Try Transferwise, it’s awesome, it has low fees and it’s faster than banks”. Well that was my interest piqued.
I followed the link, signed up on the Transferwise site, emailed a scan of my I.D for verification and couldn’t believe how easy it looked. I googled the schiz out of the company beforehand, to see if it was a scam or too good to be true. And all my research only led me to see everything was legitimate. And as good as it sounded.
I sent my first transfer using my smart-phone and it only cost me $4 NZD in fees. FOUR DOLLARS.
I was so happy, I was giving a digital high-five to myself and a digital ‘up-yours’ to the bank for all the stress they’d caused me over the years.
How does Transferwise work?
Transferwise works on a peer-to-peer foreign exchange sytem. So it means your money arrives much quicker than by bank transfer and the fees are very low compared to bank or Western Union/Moneygram fees.
The solution is local bank transfers. Money doesn’t have to leave the country to be transferred abroad.
Instead of making one international transfer, two local transfers are made. For example, if you want to send pounds to euros instead of making one international transfer, Transferwise makes two local transfers. So you will send your pounds to our sterling account in the UK, and then we will send your money out to your euro account from our euro account, so the money hasn’t actually travelled internationally.
For sending anything between a few dollars to $1,000 dollars/pounds/euros, the fees are as low as $4 or £2.
Some other currencies have higher fees, but still much lower than a bank transfer fee. For transferring larger amounts (like over $3000), Transferwise may not be the cheapest option so make sure you shop around to find one that’s right for you.
The time it takes for the money to arrive varies, but is normally very fast. The longest I’ve had to wait is 2 days, the fastest was within 8 hours. Still way faster than a bank transfer.
In my opinion, it’s a groundbreaking revolution, especially for nomadic types like myself who have spent large amounts on bank fees in the past.
The clever guys Taavet Hinrikus and Kristo Käärmann who founded Transferwise in 2010, recognised the need for a money transfer service that would allow money to flow freely and ultimately be ‘for the people’. One of their brand taglines is “Money Without Borders” and with their transparency and real exchange rates, they seem to have achieved that.
I always use it now for moving money around my accounts or making payments. It’s ultra time-saving being able to just login on my smartphone anywhere I am and transfer money. It’s so user-friendly and I can never believe how fast the money arrives.
Anything that makes life on the road easier, gets a big YES vote from me. Yay!
Sign up to Transferwise and see how easy it really is – you won’t be disappointed.
Use my unique Transferwise link and you will get your first transfer free. And may you never have to use a bank to transfer money ever again!