Why you are paying too much to send money abroad

In a globalised world, why on earth should it be such a hassle to send money abroad?

Why you are paying too much to send money abroad
Photo: Transferwise

Whether you’re a freelancer who regularly invoices international clients, or you’re simply an international citizen who needs to pay bills in another country…finances can be a hassle.

Misleading exchange rates and hidden fees can leave you with a lot less in your pocket than you thought– time after time.

“One day I was checking my expenses and saw a massive charge. I thought I'd been the victim of a crime,” says international photographer Simon. “But it was just the charge my bank was imposing on me for using my card abroad.”

It’s an all too common problem. An estimated 55 million people live abroad, and moving money along with you is a part of life. But doing so isn’t always easy

As Simon discovered, banks are not the way to go. You may assume that they'll give you a good deal – but banks often charge excessive fees, not to mention secret markups.

You can try looking up the exchange rate online,  but that rate doesn’t necessarily correspond to the rate used by your bank – many banks show a misleading exchange rate that actually includes hidden fees, which go straight from your pocket to theirs. And if you’re regularly sending money abroad, those fees really add up.

And for businesses the problem is magnified.

“We’ve never used banks as their fees are exorbitant,” agrees Braden Yuill, founder and CEO of Virtual Coworker, an online recruitment service. The company provides outsourcing services that often require international payments to overseas staff– a process that can get pretty complicated.

While Paypal can be a workaround – the service is at least open about adding charges –users still have to put with a 2.5 percent currency conversion fee on top of the retail exchange rate, plus additional transactional fees… so you end up with less. (If all that sounds confusing, it’s because it is!)

Find out how to use TransferWise for your business

Braden says his company tried multiple options for transferring money but ran into plenty of problems.

“We have used a few different providers and had a few different issues, including payments being sent to the wrong people.”

So what is the best way to pay for small business owners like Simon and Braden?

“Now I use TransferWise to move my money around the world,” says Simon. “The app makes the whole process simple and fast. I wouldn't be without it.”

TransferWise is a new kind of financial service created by two expats who were sick of unfair exchange rates and hidden fees. The service charges just 0.5 percent on most transfers – which means it's up to ten times cheaper than the average bank.

That obviously makes it a friendlier service for expats transferring small amounts regularly – but it’s also a blessing for small business owners.

“With over 250 staff, we were spending hours setting up individual payments each month,” Braden says. “Now our financial controller can make 250 payments in five minutes.”

How TransferWise can help your business

TransferWise has a service exclusively for businesses, which allows you to pay invoices, freelancers or get paid. It’s a borderless product, meaning businesses instantly have local accounts, can hold multiple currency accounts and all with top security.

Business owners can now choose to make a payout to an email address or a bank account, and payments can be made in as little as a single working day – in more than 500 currency routes, with real and fair exchange rates.

“Businesses can benefit by using TransferWise for both their national and international payments,” says Erik Johansson, Product Manager at TransferWise.  “Our systems are faster and cheaper, but what really sets TransferWise apart is the fact that there are no extra fees, whereas normal banks add on all sorts of fees!”

As you would expect, it is fully regulated by the Financial Conduct Authority and protected against fraud and money laundering, so your money is safe with them.

Opening a TransferWise business account is simple: first, set up a standard account – get started by registering a personal profile here.

From there you can set up your business profile by adding company details on your settings page. TransferWise will walk you through a simple verification process (security is of utmost importance!) and soon enough you'll be on your way, able to send money on behalf of your business any time, any place.

If you need to make transfers for multiple business, just get in touch with TransferWise customer service and they’ll help you set that up, too.

“TransferWise has been a great solution,” Braden says.  “It’s not just time we’re saving – we’re saving on costs and reducing the potential for human error.”

Photographer Simon agrees.

 “I honestly consider TransferWise an essential for anyone who travels and needs to move money around.”

Need to make a transfer? Be smart – find out more about TransferWise

This article was produced by The Local Client Studio and sponsored by TransferWise.



Bizum: Why you probably need this free payment app for life in Spain

With 12 million users in Spain, this mobile payment service is how many Spaniards choose to split the bill, pay over small amounts for services and even pay the rent. Here's how it works, what changes in 2021 and why you probably need it.

Bizum: Why you probably need this free payment app for life in Spain
Photo: StockSnap /Pixabay

What is Bizum?

Bizum is a Spanish mobile service that allows users to send an amount of money that usually ranges between 50 cents and €500 per operation, just by knowing the recipient’s phone number,

It’s a free app service which was launched by Spain’s main banks in 2016 as a way of competing with other mobile payment services such as Apple Pay, Google Pay, Samsung Pay, Paypal and others.

Why do Spaniards like using Bizum so much?

One of Bizum’s main advantages is that the sender doesn’t have to type out the long IBAN and other account details that come with regular money transfers.

There’s also the fact that the recipient receives the money immediately for free, whereas other immediate banking transfers often come with a price tag. 

It’s also possible to request money from another person through Bizum. 

Nowadays if you meet up with Spanish friends and it comes to splitting the bill, you’ll likely hear from at least one person, ¿Tienes Bizum? (Do you have Bizum?). 

Others use it for regular payments, even to pay their rent or services such as Nexflix and Spotify.

It’s fast, easy, free and according to a 2020 study by Caixabank Research, Bizum proved particularly useful during Spain’s Covid-19 lockdowns when going out to withdraw money from an ATM wasn’t always an option. 

Bizum is particularly popular among Spaniards aged 25 to 44, who make up 48 percent of users.

Many businesses and shops in Spain are now also allowing customers to pay through Bizum, so if you forget your wallet with your cards and cash in it, there’s the possibility of paying immediately through your mobile. 

All in all, Bizum is the go-to mobile payment service in Spain with more than 12 million users, so if you’re based in Spain it will probably come in handy for you to have it activated too.

Otherwise, your Spanish friends and acquaintances may be put off by the fact that they can’t give you the exact amount in cash, that they have to go to the ATM to withdraw money or that they have to spend time doing a stand bank transfer which may even cost them extra.

How is Bizum used?

Bizum does not work as an independent application, so to register you must do so through your mobile banking app. It may be possible through the mobile banking app you have already or through a separate app your bank offers for quick mobile payments. 

When you access Bizum, you’ll have to sign in to your banking app with your usual details and once in, you’ll have to choose which account you want to link the Bizum service to (you can only have one associated account, although this can be changed).

Next up you’ll need to select the person you’re sending money to from your mobile’s contact list or manually enter their phone number, type the amount to send and finally confirm the transaction by means of a code you’ll get via SMS. 

If the recipient has Bizum, the money appears in their account in just five seconds. If not, they will be prompted to sign up as it is necessary for the receiver of the money to have Bizum.

Bizum will let the sender know before the transaction occurs whether the recipient has Bizum.

If you want to request money instead of sending it, you also have to add the contact, the amount and the payment description. You then confirm the request and validate the operation with the code that you’ll get via SMS.

What changes about Bizum in 2021?

As of June 15th 2021,  the number of Bizum payments that you can receive has been reduced to 60 per month, compared to the 150 payments that were allowed up until now.

This will no doubt only affect very regular users.

The new rule only affects payments between individuals – companies will not be affected.

Why is Bizum reducing the number of payments per month?

“After more than four years of service, we adjusted the operation to the reality of what was being used. Only 0.07 percent of users received more than 60 bizums per month,”  Bizum’s Director of Business Development, Fernando Rodríguez is quoted as saying in 20 Minutos.

In fact, most recipients of bizums receive an average of 4.3 operations per month. “This is very far from the limit of the 60 that we have fixed,” emphasised Rodríguez.

Another reason that Bizum is reducing the number of payments is due to security issues. “By reducing the limit of operations received, it is more difficult to use Bizum to receive funds improperly,” Rodríguez told 20 Minutos. This means that fewer `under the table’ payments can be made.

It is important to note that this measure affects only the number of bizums that a user can receive. Anyone can continue to send as many bizums as they want per month.

The rest of the conditions remain as before: the amount allowed for each operation is between €0.5 and €500 (some banks allow higher payments up to €1,000), you cannot receive more than €2,000 per day and, at most, 30 recipients can be included in a joint payment. However, banks can add extra limits, so if in doubt you should check with your bank.

The future of Bizum 

Currently, more than twenty banks in Spain include Bizum payments as an option among their services and it has almost tripled its users in just two years, going from six million in 2019 to 15 million this year. 

By the end of 2021, Bizum hopes to have reached 20 million users and have 18,000 online businesses that accept it.


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