Wise vs HSBC

Wise vs HSBC: Our recommendation

Wise vs HSBC Which one is best for you and your needs? Which is the most affordable option if you need to send or receive money internationally?

Check out our analysis of the pros and cons of each for transferring money internationally.

Wise is usually a better deal, period.

Wise is an online money transfer service that specializes in helping you send money between two different currencies. They charge very competitive fees, but what is unusual about Wise is that they do not take a margin on the exchange rate.

HSBC is a global bank that offers standard bank accounts, also called current accounts, to the general public in several countries including the US, UK and France. The operate as any bank does and offer other types of accounts, like savings accounts, online banking, mobile apps, debit and credit cards and international and domestic bank-to-bank online money transfers. The charge fees for transfers and take a margin on the exchange rate.

Both Wise and HSBC are solid choices for sending money to another country, but in general, Wise costs less and gives you a better deal. Here's why.

📢 Important: Wise Is the New Name for TransferWise

Until March 2021, Wise had been formerly called TransferWise. The company decided to change its name to broaden its appeal and encapsulate the full range of service it offers. While the name is different, it's important to note that the service is still the same, and you're still able to use the service as usual with the same set of login details that you used on TransferWise. See more here.

Fees & Exchange Rates: How Wise& HSBC Compare

Here is how Wise works: you pay for your transfer from your bank account, debit or credit card and send funds directly to the recipient's bank account. Options vary according to the corridor; in other words, it depends on where you are sending money from and to. For example, if you are transferring money from the US to Mexico you also have the option to pay from your bank account via ACH (Automated Clearing House). Alternatively, if you are making a transfer from a number of countries in Europe, you can make a SOFORT transfer. All fees and exchange rates are transparent, and they are clearly indicated on the website when you make the transfer. Wise does the fee calculations for you and warns you when there may be a local bank fee (this is something they cannot control).

How HSBC works: Each HSBC account in various countries will charge different fees in their respective local currency, but we'll use a UK-based HSBC account for comparison purposes.

With HSBC you can send money from your personal HSBC bank account to another bank account in a foreign country. You can do it via online banking or with your app, depending on the country or the amount you would like to send and whether or not you've already set up someone or a business as a previous payee.

Fees

Wise charges a percentage of your total transfer amount. This amount is roughly 0.6% to 1% of the transfer fees (it depends on the currency combination). There's no transaction fee if you pay via a traditional bank transfer. Paying via ACH? There's a 0.15% fee, or by debit or credit card there's generally a 0.3% to 2% fee. It's variable; according to Wise's website, "most banks charge an additional fee. These processing fees vary depending on the kind of card you use and where it was issued." For example, to send 1000 Pound Sterling account to convert to Euros to a European Euro account, you pay a £3.66 transfer fee.

Depending on where you are transferring to, HSBC charges a flat fee. For example, to send money from your Pound Sterling account to convert to Euros to a European Euro account, you pay a £4 transfer fee.

Exchange Rates

Wise's exchange rate is based on the standard, mid-market rate. They don't add a margin on top of that rate, which is quite different from other money transfer providers.

Exchange rates by HSBC are highly variable and always above the mid-market exchange rate. For example, in today's comparison, if you send £1000, the recipient will get roughly €1,116.42, which is €43.19 less than what they would get with the actual exchange rate of the day.

Key Takeaways:

• Wise is better simply because they charge the mid-market rate.
• Wise's fee is a percentage of the total amount, so the more you send, the higher the fee. However, the exchange rate is so much worse with HSBC, that even when the Wise fee is higher, you still get a better deal with them than HSBC
• Keep in mind that HSBC is not transparent about fees so you often do not know what you will pay until after the transaction.
• Our recommendation is that Wise is a generally better deal because you get the mid-market rate and fees and charges are clear up-front.

"Wise's is better because the always use the actual exchange rate, whereas HSBC takes a margin on the rate."