Transferwise for Freelancers: A Step by Step Guide

If you’re a freelancer working with international clients, you’re surely familiar with the common methods of receiving payments. Most freelancers are getting paid via Paypal, Payoneer, or via direct bank transfer. Among these, PayPal seemed to be the most convenient for a huge majority of foreign clients. However, not all freelancers are happy about getting paid through this platform.

There are a lot of complaints ranging from low currency exchange rate, high sending fees, to getting their accounts temporarily blocked. And if you’re lucky, you might have neglected that you opened a “Receive Payments with PayPal” account instead of a buying account. Though you can receive payments either way, in the former, first-time users usually get their money withheld for 21 days. Yes, you can lift the hold by changing the status of the service to shipped and asking the sender to also set the status of the service to received, but this is too much of a hassle. Plus, the hold will only be shortened to three days. You still need to wait for your money for three days. And a similar scenario can happen three to five times before you can instantaneously receive and transfer your money.

If you’re in the lookout for an alternative to PayPal, with lesser sending fees and without the aforementioned hassles, Transferwise is for you. Transaction fees are always transparent, and you’ll receive your money within 24 hours. Some even receive their money within hours after being sent. On top of that, the exchange rate is also higher than other payment channels because Transferwise is using the mid-market rate at the time you converted the money into your account.

Creating a Transferwise Account

You can create an account through the web or Smartphone app. If you’re pursuing the former, simply click here and answer the sign-up questions. Choose Personal as the account type.

After filling all the necessary details, click sign up. After logging in, you will be redirected to this page. Check all that applies to you and click continue.

Once you have successfully signed up, this is how your dashboard would look like. Since you now have a Transferwise account, we can now add a balance to your account.

To open a balance, click Balances on the upper left part of your dashboard. After that, click Open a Balance on the upper left-hand part of the webpage. Then, choose the currency that you would like to use to receive and hold your payments in.

Most freelancers choose PHP as their main currency so that they won’t have a hard time sending the said money to their Philippine bank accounts. You can open balances in other currencies, too. Just click Choose currency and choose your desired currency from the dropdown menu.

Once you’ve your desired currency, you’re now ready to link your bank account to your Transferwise account. All you have to do is go back to your account dashboard and click Recipients. Once you click that, you’ll get this page.

Choose to add your bank account and fill in the necessary details. You can choose to add a local bank account or an E-Wallet provider like GCash and Paymaya. Once done, click Confirm and you’re ready to go.

The process is similar when you’re signing up through the Transferwise mobile app. Since it’s the same, we won’t be discussing it here again.

Sending Payments via Bank Transfer

Sending money using Transferwise’s bank transfer feature is pretty straightforward. The first thing you need to set up via Transferwise is an international money transfer. Once done, exit your account and pay via bank transfer through your local bank. This can be done via online banking, telephone banking, or personally at a bank branch. Here’s a more detailed guide to complete this process.

Step #1: Set up your transfer.

Using the app or Transferwise for web, set up your transfer by choosing how much money you’ll be sending, and entering the bank details of your recipient.

Step #2: Select bank transfer on the payment screen.

At the payment mode selection screen, choose bank transfer. Once done, you’ll be directed to the page where you’ll need to input your recipient’s bank account details and reference. Take note of these parts since you’ll need the reference code and other details when you pay through your bank.

Step #3: Log out from your account.

Once you’re done entering your recipient’s details, log out from your Transferwise account and pay via bank transfer through your local bank.

Step #4: Set up your bank transfer with your local bank.

You can do this via online banking, telephone banking, or personally at a bank branch. To avoid delays in the transfer, make sure of the following:

• That your name on your Transferwise account matches your name on your local bank account. If you deposit using another person’s bank account, you need to secure a Special Power of Attorney for such purpose.
• That the reference number for the transaction is inputted correctly as this helps Transferwise identify your deposit before they can proceed with the transfer.
• That you correctly input the exact amount you’re transferring via Transferwise.

Step #5: Wait for the confirmation email.

As soon as the money arrives in the Transferwise account of your recipient, you’ll receive a confirmation email. Transferwise will be the one to convert your payment and pay the corresponding amount to your recipient.

Sending Money Using PHP Transfer?

It’s simple to send money via PHP transfer. Once you have successfully signed up, you can send money easily.

Step #1: Input the amount you want to transfer.

Since you’ll be sending the money in PHP, there’s no need to change your sending currency. Simply input the amount you want to send. The payment screen will show you how much will your recipient receive and how many working days it will take before the money arrives in the recipient’s account.

Step #2: Input both the sender and recipient information.

You need to provide you and your receiver’s information. Since you can send to any individual accounts, business banks, and E-wallet accounts like GCash and PayMaya, the details you need to provide will vary.

• For bank account transfers: You need to provide the full name, address, name of the recipient bank, and six to 18 digit bank account number.
• For mobile wallet transfers: You only need the receiver’s mobile phone number that starts with the +63 country code.

Step #3: Review all the details.

Make sure that you provided all the correct details before you confirm the details of the transaction. You can also choose to leave a message for your recipient.

Step #4: Fund the transfer.

Make sure you have enough money in your Transferwise account to fund the transfer. You can use any of these methods to fund your transfer — direct debit, bank transfer, and debit or credit card. For bank account transfers, you can send a maximum of PHP 480,000 for every transfer. For mobile wallets, the limit is set at PHP 100,000 per transaction.

How Long Does it Take To Complete a Transfer?

For you to receive a wire transfer, it only takes one working day. However, if you’re receiving money that is sent by an Automated Clearing House (AHC), it will take somewhere within one to three working days before you can receive the money. If the money you’re waiting for is sent outside the US, it can take two to five days to receive the money. This time frame can, however, extend due to multiple intermediary banks and time differences.

The good thing about Transferwise is the sender won’t have to guess how long before his recipient can get the money. At the time he sends the money, Transferwise provides him with information as to when the money is set to arrive.

Countries You Can Transfer To and From

Currently, Transferwise supports money sending and receiving features for these countries.

There are certain limitations to some of these countries. Since these limitations vary from country to country, let’s save that for another discussion. All you have to know now that in as far as the Philippines is concerned, these are the limitations:

• The company can only send PHP to Philippine-based bank accounts.
• They can facilitate the transfer through Philippine-wide domestic transfers only.
• They can’t send money from the country.

Advantages of Transferwise for Freelancers, VAs, and Agency Owners

Here are the advantages of this app for freelancers, VAs, and agency owners:

No Hidden Charges

PayPal, for example, charges more because of the lower exchange rate. Aside from the sender paying a certain percentage of the money transferred as the transfer fee, the receiver is also charged because of a 2 to 3 pesos difference in currency conversion rate. This is not the case with Transferwise.

The fees are declared clearly, and the sender sees how much his receiver gets once the money he sends is converted in the receiver’s local currency. If you’re an agency owner, you won’t have to suffer the extra charges by receiving the money from your client. Your freelancers get paid accordingly, and you also get your share sans the added transaction fees.

Mid-market Exchange Rate

One of the most common complaints of freelancers and agency owners receiving payments from foreign clients through PayPal is that they get a lower exchange rate. For example, your client pays your USD 500. Supposedly, if you convert that in PHP, you’re supposed to get PHP 25,542 (PHP 51.08 for 1USD).

In PayPal, you’ll only get PHP 24,475 (48.95 PHP for 1USD). The PHP 1,067 difference is too big to overlook. In Transferwise, you’ll get more than PHP 25,000 for the 500 USD transfer. This is because they are using the mid-market rate as the basis for their currency exchange rate.

This rate refers to the midpoint rate between the buying and selling prices of both currencies involved in the transfer. This is also known as the interbank rate, the rate that buyers are willing to pay, and sellers are willing to sell for.

Disadvantages of Transferwise for Freelancers, VAs, and Agency Owners

The main disadvantage of using Transferwise is the speed of transfer. In PayPal, transfers can be made instantaneously. You can cash in via GCash or send your PayPal money to your Visa credit or debit card. The moment is immediately sent to your nominated account.

As you already know, it takes 24 hours to three days before Transferwise can complete a transfer. This timeframe can even take longer due to interbank processes, international holidays, local holidays, and so on. This is clearly not for your emergency financial needs. On top of that, there are also various restrictions per country.

Transferwise FAQs

Here are the answers to the most commonly asked questions about Transferwise.

Can you send money from another person’s Transferwise account?

No, your name on your bank account and Transferwise account should match before any fund transfer can proceed.

Why is it taking too long before my money appears on Transferwise?

The receiving bank may need to verify the transfer. That’s why they’re taking too long to clear the transaction up. Other banks don’t take too long to transfer the money to the recipient’s account. If this issue arises, the best people to call is your local bank.

How can I check the status of my transfer?

All you have to do is log in to your Transferwise account and click view transfer details on the specific transaction you wish to track.

Undoubtedly, Transferwise has become one of the most favored payment platforms by freelancers to date. It offers several benefits to hardworking remote workers, especially those who are looking for a cheaper alternative for PayPal.

As a virtual assistant and agency owner, I highly recommend Transferwise due to the fact that it follows the standard currency conversion, and my hard-earned money arrives in my bank account in a span of a few minutes!

If you’re ready to give Transferwise a try, sign-up and start receiving payments with higher currency conversions and very minimal fees.