TransferWise for Estonian company

While “traditional” banks are focusing on avoiding becoming involved in yet another money laundering scandal, which often results in tremendously complicated procedure for opening corporate bank account, modern Fintech companies are developing solutions that might work as an excellent substitute for traditional banking. One of the most attractive solutions is undoubtedly a multi-currency business account by TransferWise.

Please note that this article is not intended to advertise TransferWise. Since our main business is company registration in Estonia, we get questions about opening a bank account for Estonian company every day. Thus, we have decided to give a brief overview of TransferWise business account, which is one of the many possible alternatives from the perspective of our standard customer – a globally operating Estonian company whose management is located outside Estonia.

Facts about TransferWise

  • founded in 2011
  • оne of the most succesful financial startups
  • 14 offices located around the world
  • over 2200 employees
  • over 8 million worldwide customers
  • since 2017, TransferWise has been providing international business accounts

Online-only

Forget having to visit a bank branch – TransferWise is an exclusively online solution. This means that you will be able to solve absolutely all banking issues without leaving your home. Well, it’s indeed very unlikely that you are going to have any issues at all – both their website and mobile app are carefully thought-out and the user interface is very intuitive.

Easy sign up

The whole TransferWise service is built around user-friendliness and you can experience it right from the beginning. To open a current account, you do not need to line-up at the bank for filling countless questionnaires with incomprehensible questions and checkboxes. With TransferWise it only takes a few minutes to set up your business account – all you need is a smartphone and an email address. To activate a multi-currency account you will also need to go through a simple identity verification process, which usually takes around 1-2 working days.

The ease of opening an account brings us to the next question – how seriously does TransferWise take security? Can you trust them with your money? Let’s discuss it further.

Safe and regulated

TransferWise is a strictly regulated financial institution, registered with numerous financial authorities all around the world.

In accordance with regulatory requirements, TransferWise is not allowed to keep customers’ funds on its own accounts. Thus, your money will be deposited with renowned banks such as JP Morgan Chase, Barclays and Deutsche Bank. So even the worst possible scenario – the hypothetical bankruptcy of TransferWise – will not entail financial damage to its customers.

As for the technical security, there is no need to worry either. Using HTTPS encryption and a variety of 2-step verification methods is just the tip of the information security iceberg making sure that no one else can get access to your TransferWise account. And a lot remains behind the scenes – for instance, TransferWise is actively using big data processing and analysis technologies to provide 24/7 security control. The access to big data, which is inaccessible to traditional banks due to the specifics of their business model, actually gives a huge technological advantage to Fintech companies when it comes to security and AML (Anti Money Laundering) matters.

Fair and transparent fees

When making an international payment from your traditional bank account or when paying with a card abroad, you – often unbeknownst to yourself – are being charged various hidden fees like bank service comission and unfavorable exchange rate (which you can not control). In addition, you also have to deal with monthly account and card maintenance fees. A considerable amount of money that is essentially being taken for granted because these “small” costs are absolutely not transparent and therefore often invisible to you a customer. But even so, what can you do about that? As a client in today’s traditional bank, you are by no means a king, but, on the contrary, should be grateful for getting the right to bring your money there.

Now getting back to TransferWise. Their business idea is aimed to solve a real problem –  the inefficiency and expense of sending money internationally and making card payments abroad. TransferWise makes money by charging a small and completely transparent fee on every cross-currency money transfer or card payment. And only on this. Opening a multi-currency account is free and there are no monthly payments for account & card maintenance either.

What is extremely important – when making an international payment or paying with a card abroad, the currency will always be converted at the fairest value – the real exchange rate, which is called the mid-market rate. If you want to know the mid-market rate of a currency, you can find that on independent sources like Google and Yahoo Finance. This level of fairness is highly beneficial because you don’t lose money in the process and you also avoid the risk of overpaying.

TransferWise is not a bank

With all the benefits described above, it is important to understand the essence of TransferWise. TransferWise multi-currency account is an easy-to-use, inexpensive and safe current account, but nothing more. Unlike traditional banks, TransferWise does not provide services related to lending, savings and insurance. Whether your business actually needs these services, and if so, how affordable they really are, is an individual question.

Will TransferWise work for Estonian company?

If you run an Estonian company that needs a multi-currency account to send and receive money from partners around the world, TransferWise business account is definitely an option to consider. Just like in any traditional bank, you will get an International Bank Account Number (IBAN) accompanied by a prepaid Mastercard.

The service is backed by a huge number of engineers who constantly work to ensure that your money transfers are carried out in the most convinient, fast, safe and inexpensive way.

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