The banking industry has been around for a long time and is known for being slow-moving and resistant to change. While it is not a monopoly, it can be difficult for new banks to enter the market due to regulatory and financial barriers.
However, there is currently a lot of innovation happening in the banking industry. This innovation is taking place in various areas, such as business and consumer banking. New financial tools and technologies, such as Wise or SplitWise, are being developed to provide better services and more convenience to users. Overall, these tools are disrupting traditional banking practices and making financial services more accessible and convenient for people. Let’s learn more about Wise (formally known as TransferWise).
Have you ever heard of the tool called Wise? ‘Wise’ is a financial technology company that was launched in 2011 with a vision of making international money transfers cheap, fair, and simple. Wise has revolutionised the way people transfer money internationally. With its innovative peer-to-peer model, vast currency support, and convenient services, Wise provides a reliable and affordable way to transfer money across borders.
Now we have a basic understanding, let’s compare banks vs Wise. Banks often charge high fees for international transfers, while Wise, on the other hand, is known for its transparent, low fees. Another important factor when comparing banks and Wise is the exchange rate. Banks often offer exchange rates that are less favourable than the mid-market rate that Wise offers.
Banks can be slow when it comes to international transfers, often taking several days or even weeks to complete a transaction. Wise’s transactions are generally completed within one to two business days.
Lastly, Wise is highly convenient, as the whole process is digital. No paperwork or the inconvenience of visiting a branch in person are massive advantages.
So, how does TransferWise work?
Wise is a peer-to-peer money transfer service that allows users to send and receive money in different currencies. Once Wise receives your money, they use the bank in the country to which you are transferring the money to and deposit the money to the receiver’s account. This means the money has never gone through the actual transfer stage, which is the key to their low fees.
This way, Wise is able to avoid the traditional banking system, which can be slow and expensive. Instead, the money is transferred between the two accounts, with Wise taking a small fee for facilitating the transaction.
The exchange rate used in the transaction is very close to the mid-market rate, which is the rate you see on Google or other financial websites. This means that customers get a fair rate without any hidden fees or markups.
Another financial tool that is convenient and easy to use Splitwise.
Splitwise is a mobile app and website that is designed to help people split expenses and bills with their friends and family. The app is particularly useful for people who live together, travel together, or frequently split expenses with others.
It is easy to use. Users create a group and each time an expense is incurred, Splitwise will calculate who owes money to whom and how much. It even keeps a detailed record of old expenses to automatically adjust future payments to make things even.
In summary, Wise and Splitwise are two innovative financial tools that offer affordable, reliable, and convenient services to users. They represent a shift away from traditional banking practices and demonstrate how technology is transforming the way we manage our finances.