Reduce your cost of transaction whilst accepting foreign currencies

Wise, formerly known as TransferWise is widely known in the UK and perhaps across the EU. I’ve personally come across this tool when I was working overseas in Australia and had to transfer myself CAD to AUD and Vice-Versa. I was looking for an option to reduce my cost of transaction and simultaneously get the best conversion rates. Wise does it all for you at a fraction of the cost of your traditional bank.

Fast track a couple years later, I’ve opted for Wise Business in order to accept foreign currency payments and to ultimately reduce my cost of transaction from converting my USD into my Canadian bank account.

Since I operate in an international industry, I chose to accept USDs in payments as it is the most widely used currency in the world. However, I knew that I needed to take into consideration my risk exposure to currency fluctuations, but also consider the cost of transaction whilst converting a currency to another. Traditionally, you can expect to pay as much as 4% in conversion rates when dealing directly with traditional banks (unless you are transaction +$50k and dealing directly with the FX dealing desk).

For roughly $40 CAD, Wise allows you to open USD bank account details. Once created, you may now connect your USD bank details to your Stripe and/or PayPal account so that your USDs are not converted into your local currency on their platform (where usually you pay an expensive conversion rate). You can then, transfer that balance into your USD bank details in your Wise account. On your platform, you’ll then be able to convert your USDs into CADs at Wise’s conversion rates which typically guarantees you “Market Rates”, hence paying little to no spreads and simply a small fixed fee that doesn’t compare to what you would usually pay at your local bank.

Soon, Wise will come out with they’re borderless bank card which will allow you to spend anywhere in the world at the lowest conversion rates and little to no fees upon each transaction you make. I’m looking forward to this feature to come out for Canadian residents, however I believe it exists in other jurisdictions.