What Australians Need to Know About the TransferWise Borderless Account

If you deal in international repatriation of funds, there’s a good chance you’ve heard about TransferWise. For the uninitiated, TransferWise is a UK-based overseas money transfer specialist that began operations in 2011. This FinTech unicorn registered profits within six years of entering the market and is backed by names such as Richard Branson, Peter Thiel, David Yu, and Max Levchin.

Earlier this year, the company launched its Borderless Account for online sellers, freelancers, and small businesses. However, Australian residents could start registering for this account only after 27th October.

What’s in it For the Aussies?

Upon registering for a Borderless Account, you get local bank details from Australia, the U.S., the UK, and Europe. You get a BSB number and an account number for receiving payments in Australian dollars, a routing (ABA) and account number to receive payments in U.S. dollars, a sort code and an account number to receive payments in British pounds, and SWIFT/BIC and IBAN details to receive payments in euros.

Consider this – you receive payments from your clients in the UK and the U.S., and end up losing a share of your profits through unfavourable exchange rates. With the Borderless Account, you will receive U.S. dollars in a corresponding U.S. dollars account, and British pounds in the UK-based receiving account. At this step, you avoid paying currency exchange fees. In addition, when you withdraw funds from your Borderless Account into your Australian bank account, you get to benefit through the company’s competitive exchange rates.

PayPal to Borderless Transfers

Several online sellers, freelancers, entrepreneurs, and small businesses use PayPal to receive cross-border payments. PayPal holds these funds in U.S. dollars. When you withdraw funds from your PayPal balance into your Australian bank account, you need to pay currency exchange fees and make do with whatever exchange rates the company provides. By linking your PayPal account to your Borderless Account, you get to benefit through the latter’s more competitive exchange rates.

This is how it works. You transfer U.S. dollars from your PayPal account to your U.S. dollars receiving account with TransferWise, so no currency exchange takes place. Then, you withdraw U.S dollars from your Borderless Account into your Australian bank account, thereby avoiding PayPal’s typically poor exchange rates.

What About Online Sellers with Australian Customers?

You may benefit by signing up for the Borderless Account if you do not live in Australia, but receive payments from this country. This is where the receiving account for Australian dollars comes into the picture. All the payments you receive from your Australian customers go into this account, and since these are local transfers no currency exchange takes place.  This lets you steer clear of unfavourable exchange rates usually offered by banks.

When you withdraw money from your Borderless Account into your Australian bank account is entirely up to you. This gives you the ability to make transfers when the markets are favourable.

Hold Funds in Multiple Currencies

The Borderless Account gives you the ability to receive money with unique bank details in four currencies. AUD, GBP, USD and EUR. More supported currencies will be added in coming months! It can also allow you to hold funds in as many as 28 currencies.

These include:

  • Australian dollar
  • British pound
  • Bulgarian lev
  • Canadian dollar
  • Croatian kuna
  • Czech koruna
  • Danish krone
  • Euro
  • Georgian lari
  • Hong Kong dollar
  • Hungarian forint
  • Israeli shekel
  • Japanese yen
  • Mexican peso
  • New Zealand dollar
  • Norwegian krone
  • Peruvian sol
  • Polish zloty
  • Romanian leu
  • Singapore dollar
  • South African rand
  • Swedish krona
  • Swiss franc
  • Turkish lira
  • Ukrainian hryvnia
  • United Arab Emirates dirham
  • US dollar

There are no maximum limits when it comes to how much money you may hold in your Borderless Account. With most currencies, you may transfer or withdraw up to £1 million or its equivalent in a single transaction. Sending or receiving U.S. dollars come with different limits.

Countries Covered

Residents of most countries may sign up for a Borderless Account. Countries where the service is not available yet include:

  • Afghanistan
  • Brazil
  • Burundi
  • Central African Republic
  • Chad
  • Congo Republic
  • Crimea (sub-territory)
  • Cuba
  • Democratic Republic of the Congo
  • Eritrea
  • Hong Kong
  • India
  • Iran
  • Iraq
  • Japan
  • Libya
  • New Zealand
  • North Korea
  • Sevastopol (city)
  • Somalia
  • Republic of South Sudan
  • Sudan
  • Syrian Arab Republic

Can it Lead to Savings?

The TransferWise Borderless Account may lead to savings in different ways. Unlike most banks and several international fund transfer companies, TransferWise does not add markups in the exchange rates it offers. The mid-market rates it uses are the same you’ll find through sources such as Yahoo Finance and XE. The rate you get is the same whether you transfer funds from one currency to another within your Borderless Account, transfer funds to an overseas bank account, or withdraw money to your Australian bank account.

Fees

There is no account opening or maintenance fee to worry about. You’ll pay no fees when you receive funds. Adding money to your Borderless account does not attract fees unless you pay using a card. There are no fees to pay for the multi-currency receiving account details. When you convert money from one currency to another, send money to someone else’s bank account, or withdraw funds into your bank account, you’ll need to pay nominal fees.

The Multi-Currency Card

While there has been no official statement on this front, there is strong indication that TransferWise will launch a multi-currency card to complement the Borderless Account by the end of 2017. When this happens, account holders will get an easy way to access their funds at anytime, from anywhere. Among others, this card might work well for international travellers.

Conclusion

The international fund transfer market has witnessed significant changes in the last two decades. According to iCompareFX.com, it looks like the Borderless Account is all set to disrupt the market again. It is bound to find takers in countries the world over, and Australians may start benefiting by it already.