Transferwise "Direct Debit" Now Available for USD Payments

[Pib]

Last week I got an email from Transferwise that "Direct Debit" was now available for "USD" payments.   That is, you could now have money "pulled" from your Transferwise Borderless/Multicurrency balance.   Before you could only initiate a payment/transfer by "pushing/sending" it from Transferwise and paying  a small fee....that is, you had to initiate a transfer/payment on the "Transferwise end"....push the money out.  And you are pushing it out to a bank acct somewhere in the world. 

 

But now for "USD" payments you can also have funds "pulled" from your Transferwise borderless acct balance by an outside company/bank like a credit card company or your US bank. Like some company doing a direct debit to pay a monthly bill......setting up ACH "pull/debit" transfer link at your US bank/credit union/brokerage to pull money from your Transferwise borderless acct balance to your US bank acct. 

 

Now instead on only being able to "push" money to your Transferwise acct to load-up your borderless acct, if having a USD acct/balance you can also now setup "direct debit" (have money pulled by another US bank, company, etc). 

 

This new capability gives Transferwise more bank-like capability (although Transferwise clearly state they are not a bank and provide no deposit protection) since you are now able to push and pull money from/to your Transferwise borderless acct.  

 

Both the wife and I have Transferwise borderless accts and the Direct Debit option is now showing as available on our borderless accts when we login.

 

See below snapshot/quote/links for more info....partial quote from their announcement.

"Good news, America, from today, you can now directly link your TransferWise account to your US bank, brokerage, trading platform, credit card provider, PayPal, and many other services — and automate your payments through direct debits."

 

Snapshot from Email 

 

 

A link within the email I got takes a person to below Transferwise webpage that further explains the brand new USD Direct Debit capability.

 

https://transferwise.com/us/blog/usd-direct-debits-launch

 

Quote

 

NEWS

USD direct debits are here. And they are awesome.

 

Josh Aziz

07.21.20

2 minute read

Good news, America, from today, you can now directly link your TransferWise account to your US bank, brokerage, trading platform, credit card provider, PayPal, and many other services — and automate your payments through direct debits. Which are absolutely, 100%, Totes McGotes free.

 

No more big fees to pay your bills. No more lousy conversion fees.

 

Right now, it's available only for US residents. We’re soon launching for everyone outside the US in the coming months, join the waitlist here.

Direct debits explained:

Direct debits are when you link your account to another service and give them permission to debit money straight from your account.

Automate card payments and transfers

With direct debits, you can set up automatic payments to your Amex, Chase, or any other card program and avoid those pesky late fees.

 

And if you frequently move funds to a US bank or savings account, you can avoid the hassle of doing it manually each month and set up a recurring debit from your TransferWise account.

Avoid fees when you invest and use other services

Paypal, investment apps, and other online services let you add funds using a card or wire transfer, but these often carry hefty fees. Linking your account and adding funds with direct debits is completely free. A penny saved is a penny earned!

Great for paying bills

 

Direct debits are also great for online bill paying.

 

Once you link your account to another provider, like Verizon, T-Mobile, or most anyone else, you won’t need to do it again; you’ll be able to set up future payments with a few clicks.

 

You can also set up recurring debits, where the payments will be automatically taken out on a schedule — no clicks needed. You just set it and forget it. Many providers even offer discounts for setting up automated payments.

How to set them up

It’s simple:

1. Go to your account and add USD as a balance (if you haven’t already).
2. Click Get bank details.
3. Log in to another service you’d like to link to TransferWise.
4. Follow their steps to link to an external account. You’ll have to enter your USD balance account number and ACH routing number. Make sure to choose “Checking” as the account type.
5. The service will then send 1-2 micro deposits (small amounts) to your TransferWise account. (Note that your TransferWise account might show up as “Community Federal Savings Bank” in their system.)
6. Wait for the micro deposits (1-2 small amounts) to appear in your balance, then confirm them to finish linking your account.
7. When it’s time to make a payment, choose your TransferWise account. (Or “Community Federal Savings Bank”, as we mentioned in step 5.)
8. We’ll take care of the rest.

Happy sending, spending, saving, and now debiting!

 

 

 

 

[Somtamnication]

Thanks for the update. I have the app but nowhere does it say that we can have a debit card based in Thailand. So this update is essentially for anyone who is or was US based, if I understand correctly.

[Pib]

Not talking debit card...taking direct debit capability.

[WorriedNoodle]

20 hours ago, Pib said:

This new capability gives Transferwise more bank-like capability (although Transferwise clearly state they are not a bank and provide no deposit protection)

Banking never was one of my strong subjects, but if deposits are not protected who would benefit from this as I thought most people only kept funds in Transferwise for very short periods since they are not even protected? Therefore there would be no balance to direct debit from?

[cmarshall]

So, this is an alternative to a bank's billpay as a way to pay US bills?  Presumably, it's of value only to those who might want to pay US bills, but lack a checking account at a US bank?

[treetops]

2 hours ago, WorriedNoodle said:

Banking never was one of my strong subjects, but if deposits are not protected who would benefit from this as I thought most people only kept funds in Transferwise for very short periods since they are not even protected? Therefore there would be no balance to direct debit from?

Since the launch of Transferwise' borderless account you can hold money in many currencies and people must do this.  It's more than just a cheap transfer facility now.

[Pib]

4 hours ago, WorriedNoodle said:

Banking never was one of my strong subjects, but if deposits are not protected who would benefit from this as I thought most people only kept funds in Transferwise for very short periods since they are not even protected? Therefore there would be no balance to direct debit from?

 

1 hour ago, cmarshall said:

So, this is an alternative to a bank's billpay as a way to pay US bills?  Presumably, it's of value only to those who might want to pay US bills, but lack a checking account at a US bank?

 

I expect most people do not keep any significant balance in there Transferwise acct, but some people apparently do because apparently it's easier for them cash-flow/money movement wise in comparison to using their bank.   

 

Additionally, when a person uses this new capability to say pay a bill like a reoccurring monthly bill there is an "interchange" fee that Transferwise earns from the biller.  You, the customer, does not see or pay this interchange fee....it's strictly between the two financial entities transferring the payment between each other.  Transferwise is not during this purely to make the customer happier with Transferwise, but because direct debit will earn Transferwise interchange bill payment fees.  Some US banks/credit unions now days offer higher benefits/interest to their customers "if the customer does so many bill payments for month or debit card purchases" because those bill payments/debit card purchases earns the bank/CU an interchange fee. 

 

Also, for those people who do keep significant sums in Transferwise they can now setup an ACH transfer link at their US bank to "pull" money from their Transferwise acct versus needing to initiate a push transfer on the Transferwise ends which incurs a small fee.  You can pretty much push and pull money from your Transferwise acct from "your bank's end." 

 

And for those banks that only use the trial deposit ACH transfer link setup method where the bank needs to successfully send "and pull back" the trial deposits (in addition to the customer validating the deposit amounts) this will allow people to push money to their Transferwise borderless acct at no cost to fund Transferwise transfer....no need to pay the Transferwise Bank Debit (ACH) fee for a normal USD Transferwise transfer.....will make the Transferwise transfer cheaper. 

 

[JimGant]

On 7/29/2020 at 3:27 PM, Pib said:

no need to pay the Transferwise Bank Debit (ACH) fee for a normal USD Transferwise transfer...

I use TW to periodically send $20k to Thailand (above that, I don't have the Direct Debit option). Could you do a cost comparison between what I do and what a borderless account would cost for a $20k transfer? Thanx.

[Pib]

1 hour ago, JimGant said:

I use TW to periodically send $20k to Thailand (above that, I don't have the Direct Debit option). Could you do a cost comparison between what I do and what a borderless account would cost for a $20k transfer? Thanx.

 

Here you go Jim...below snapshots are the comparison.  You can do the comparison at this Transferwise webpage which is where the snapshots are from.  As you will see you can save quite a bit especially when transferring a large amount.

https://transferwise.com/gb/pricing/borderless-send?source=USD&target=THB&payInMethod=BALANCE&sourceAmount=20000

 

 

 

 

Using Bank Debit (ACH) to fund transfer...that is, having Transferwise do an ACH Pull 

to fund the transfer.

 

 

Using the balance in your multicurrency acct (a.k.a., borderless acct) to fund your transfer.
Basically you "push" funds from your US bank acct via ACH for free to top-up the balance 

in your borderless acct and then you fund the transfer from the balance.  Since Transferwise

already has the funds setting in your borderless acct the transfer occurs faster....don't have to wait

on the funds to be pull from your US bank.

[JimGant]

7 hours ago, Pib said:

As you will see you can save quite a bit especially when transferring a large amount.

Thanks, Pib. Obviously I need to get a borderless account.

[Pib]

10 hours ago, JimGant said:

Thanks, Pib. Obviously I need to get a borderless account.

Well, a Borderless acct does make a Transferwise cheaper....especially good for say moving a monthly amount to Thailand of a few thousand dollars worth of baht.   But you would still be better off just doing an International Wire (SWIFT) transfer from your US bank in this case for $20K.

 

Let's say your US bank charges $45 for an international wire and let's simulate that fee being subtracted from the sending amount before being sent just to keep the cost analysis calculation inline with how Transferwise does their fees.  So, a simulated $19,955 leaves your US bank and when it arrives say Bangkok Bank it gets their TT Buying Rate exchange rate.  When looking at yesterday's/4 Aug 0830 rate the TT Buying Rate was 31.01....using yesterday's rate since above Transferwise snapshots are their yesterday rate.   

 

19,955 times 31.01 results in Bt618,804.55 minus the Bt500 receiving fee which results in Bt618,304.55  posting to your acct which is more than either of the two Transferwise funding methods I posted earlier. 

 

And you didn't have to deal with a middleman money transfer company....money just transferred straight from your US bank to your Thai bank and you get International Transfer passbook coding which may not occur with the Transferwise transfer depending on the sending reason you choose and Thai bank being sent to. 

 

Transferwise is the better deal for certain amounts but when getting into larger amounts its higher exchange rate can't offset its high fee structure.

 

To activate the borderless acct on your Transferwise acct, it's easy enough.  If it's still the same as when the wife and I  did it about 6 months ago on our Transferwise acct (we put off doing it for a long time since we don't use Transferwise that much...it's more of a backup "get-money" method).  It just takes few clicks in your Transferwise profile, it will start funds transfer (pull) of at least $20 from your US bank acct, and once that $20 posts to your Transferwise borderless acct the borderless acct setup is complete and it will then show you your borderless acct banking info.  Shouldn't take more than a day or two to fully setup.

 

In closing, if you have a borderless acct you should now with Transferwise's new "Direct Debit" setup instead of only being able to "push" money via ACH to your borderless acct to top-up the balance you can now also set setup a bank transfer link to also "pull" money from your borderless acct....it would be a push & pull transfer link vs push only.  Before, if you wanted to get money out of your borderless acct back to your bank you would have had to send the money from Transferwise paying a small Transferwise sending fee.   Before, the Transferwsie borderless acct was kinda like setting up a bank ACH transfer link to your Bangkok Bank acct....that is, you could push money to your Bangkok Bank acct but you could not pull money from your Bangkok Bank acct using the transfer link....any attempt to pull money would be rejected by Bangkok Bank.

 

 

[JimGant]

Thanx, Pib.

When doing comparisons with TW, it's hard to do when currency FX rates are changing quickly. Right now a TW transfer will get you a 30.99 rate; and the latest Bangkok Bank TT rate is 30.84. This 15 satang differential is historically what we've seen, on average. In your example the differential was only 8 satang (31.09 vs 31.01), because the baht was appreciating and TW captures this before a BB TT rate change (I've seen a 30 satang differential when the dollar's rising). But in your example a normal 15 satang differential (TT at 30.94) would have gotten a wire transfer of 616,908 vs the TW borderless transfer of 617,664.

Anyway, I'm more taken with my ignorance of the savings from a border account -- USD cost of 133 for borderless vs USD 202 direct debit method I have been using for a 20k transfer. This is real money!

I knew I'd been losing some money (in this case, 1300 baht) by not using an international transfer; but I hated fighting the static on MagicJack to talk with USAA -- on their business hours. With a borderless account, the choice is now clear and efficient.

[mackayae]

"It just takes few clicks in your Transferwise profile, it will start funds transfer (pull) of at least $20 from your US bank acct,"

Could expand further on how to set this up, I did not see it in the Profile menu. Thanks.

[Pib]

1 hour ago, mackayae said:

"It just takes few clicks in your Transferwise profile, it will start funds transfer (pull) of at least $20 from your US bank acct,"

Could expand further on how to set this up, I did not see it in the Profile menu. Thanks.

What I really meant by profile was just once you are logged into your Transferwise acct.  See this Transferwise webpage from their support/help area.

https://transferwise.com/help/17/borderless-account

[Pib]

2 hours ago, JimGant said:

Anyway, I'm more taken with my ignorance of the savings from a border account -- USD cost of 133 for borderless vs USD 202 direct debit method I have been using for a 20k transfer. This is real money!

I knew I'd been losing some money (in this case, 1300 baht) by not using an international transfer; but I hated fighting the static on MagicJack to talk with USAA -- on their business hours. With a borderless account, the choice is now clear and efficient.

 

Just as FYI below is a spreadsheet I created for myself earlier this year in comparing the use of a borderless acct to fund a transfer in comparison to Bank Debit (ACH).  The Transferwise fees may be a hair different know but I'm sure if doing a current day comparison it would work out to once again showing funding a transfer from your borderless acct balance saves you significant money.  Basically saves you the approx 0.35% ACH fee that Transferwise charges.  I don't know why Transferwise charges such a high ACH fee since the great, great majority of US banks don't charge any ACH transfer fees and even the most fee-evil ones like Bank of America only charge $3.