Paul Berg


Still Using Paypal or Western Union? Not the Smartest Way to Transfer Money

Cutting off any boring introduction, I saved exactly 1022.39$ using TransferWise instead of Paypal, Western Union or any other services throughout the last 9 months.

Sounds cool, right? Get cozy, grab a beer and start reading if you’re a:

  • Student who is abroad and receives money from their parents or tutors
  • Freelancer
  • Remote employee
  • Somebody who simply involves in international transfers from time to time for different reasons

The Problem

Being a freelancer, I used Paypal a lot. It has a simple interface, that cool feature and, overall, it’s a trustworthy brand. Seems like a pinky heaven, right? Why would one grumble?


Their 3.4% fee and the bank conversion taxes add up

At first glance, I didn’t actually take them into account.

I’m so happy I finished the project and the payment arrived. I’ll go eat some fancy meal today 🍲

It was like that, until one day, when I stopped thinking like a hungry chimpanzee and I made a set of hardcore financial calculations. I was stunned, more than 700$ accumulated in:

  1. Banking Conversion Taxes: ~2.5%
  2. Paypal Fees: 3.4%

I was actually losing ~6% of my hard-earned money every goddamn single time.

Regarding Western Union, well… The commission sounds like a horror movie: almost 8%. I used it once and it was enough. My personal interaction extends only to these two companies, but others (Skrill, MoneyGram) have similar or even larger taxes.

It’s a similar story with the traditional international bank transfers.

Yeah, I was like him.

Fires of anger started to burn inside me, so I started a hefty R&D session. It only lasted 15 minutes, yet it brought substantial positive changes in my wallet.

My goal now is to spread the word, due to the fact that I see too many people who are still in the dark and consider these fees normal.

The Abracadabra Solution

Cool Logo

Initially, I was so skeptical

  • Why should I trust them?
  • How the heck do they keep their business profitable with 0.5% commissions?
  • How can they prove this is not a scam? It’s easy to make a nice website and some fake but promising videos.

I did some further investigation and TransferWise presented itself more and more as a transparent company which simply adds true value to the market. I decided to dive in.

Ok Paul, now tell me, how does it work?

One image is worth 1000 words. [I know it’s a terrible cliche, but it fits smoothly here]

Payment Flow

Money never leaves the country! Isn’t this simply bonkers and genius at the same time?

How much do you save?

Let’s take a practical example. Say I want to send 1000$ to my imaginary friend Jack, who lives in the UK. The conversion rates are specific to the day this article was published, 12 of August, 2017.

Making some simple math, you save between 32 and 66£ on each transfer thanks to the real conversion rate!

It’s literally a no-brainer to use TransferWise. This is the secret to have 1022.39$ more in your pocket. You just got to be a little bit smarter.

Notes for Paypal:

  1. The fee is 3.4%, that means 34$, but I added 1$ for the withdrawal fee. Do you see how a little bit here and there adds up?
  2. The “Amount Received” represents the final stage, after you withdraw the money to your actual bank account. That’s why the “Exchange rates” were approximated to 0.7500, it really depends on your bank, yet it’s something around 2.5%.
During my 9-month experience using the website, I received only top-notch support for the problems which arose. Great team. And great co-founders, I really admire them and their story.

Some Cons

We’re humans and we’re far from being error-free. This is what I did not like:

Confirmation email…are you there? C’mon! Maybe in spam…?

If you make a payment request and the sender pays, there’s NO freaking confirmation email until the funds are converted! This confused me severely, especially the very first time. If there are any changes to be made, this should be on top of the list.


Because it takes time to make the currency exchange, there’s no instant gratification. Although on some fortunate occasions the whole process was fulfilled in a few hours, I also faced full week spans waiting times.


The payer can cancel and issue a refund before the money is converted. This is not a problem for me because I only work with trustworthy people, but make sure you’re not scammed.

This is a situation where PayPal can actually be your best friend (do you see what I did here?). If you have any doubts, just go with them.

One last bit

This is more of a note than a con and I think it’s up to your country, bank and so on and so forth, but there’s a 1£ fee after the funds are finally in your account. But who cares about that when…

You have 65£ more than your Western Union fellas, right?
Light up the cigars!

Funny thing is that good old Homer actually made us wealthier by burning that dollar bill. Thanks man!

Wait, what about blockchain?

Blockchain is the underpinning technology of cryptocurrencies such as Bitcoin or Ethereum. It lets you trade directly with your peers, removing all middlemen from the equation.

There are many interesting digital currencies, but, for our particular use-case, the ones which quickly come to mind are DAI, USDC or TrueUSD. Just install MetaMask, purchase Ether and you’re good to go to buy them on a decentralised exchange like Kyber!

To conclude

Apart from TransferWise, there’s also:

Just in case you were wondering why there were a bunch of naked people in the cover.

Do you want to open an account on TranferWise?

If you enjoyed this article, would you mind to clap it or share it? It’d be greatly appreciated ✌️

Find me on Twitter or Keybase if you want to chat.

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