Is Wise Safe to Transfer Money? Here’s What You Should Know

Wise, formerly known as TransferWise, is a global technology company specializing in international money transfers and multi-currency accounts. It facilitates cross-border payments, allowing users to send, receive, and hold various currencies. This article explores Wise’s safety and security measures, addressing common concerns about transferring money through the platform.

Regulatory Oversight and Licensing

Wise operates under a comprehensive global regulatory framework, crucial for its operational integrity and user safety. In the United States, Wise US Inc. is registered with the Financial Crimes Enforcement Network (FinCEN) and maintains licenses as a money transmitter in most states where it operates. In other U.S. states or territories, money transmission services are offered through partner financial institutions, such as Community Federal Savings Bank, which is supervised by the Office of the Comptroller of Currency.

These regulatory bodies impose strict requirements on financial service providers like Wise, encompassing consumer protection, anti-money laundering (AML), and know-your-customer (KYC) procedures. AML regulations prevent exploitation of the financial system for illicit activities like money laundering and terrorism financing. KYC procedures involve verifying customer identity through documentation like government-issued IDs and proof of address, alongside risk assessments to prevent identity theft and fraud. Wise has faced scrutiny and fines from state regulators regarding its AML compliance, leading to remediation efforts to address identified deficiencies.

Security Measures and Data Protection

Wise employs a multi-layered approach to secure user data and transactions, integrating technical and operational safeguards. Communications between users and Wise systems are encrypted using strong asymmetric encryption, making data unreadable during transmission. This includes standard protocols like Transport Layer Security (TLS) and Secure Sockets Layer (SSL).

Account access is protected by multi-factor authentication (MFA). This requires users to provide a second form of verification beyond a password, such as a code from an authenticator app, an in-app notification, or a code via text message or phone call. Wise also utilizes advanced fraud prevention technologies, including machine learning models that monitor transactions and detect suspicious activities in real-time. Dedicated anti-fraud teams work around the clock, performing millions of daily checks to identify and prevent fraudulent transactions.

Safeguarding Customer Funds

Wise protects customer funds through a practice known as “safeguarding” or “segregation,” which differs from traditional bank deposit insurance. This means that customer money is held separately from Wise’s operational funds in dedicated accounts at reputable financial institutions. This segregation ensures that even if Wise were to face financial difficulties or insolvency, customer funds would not be treated as company assets and would remain protected and accessible.

A significant portion of safeguarded funds, approximately 60%, is invested in secure, liquid assets like government bonds, including those from the EU, UK, and US, which can be easily converted to cash. The remaining funds are held as cash with several well-known banks that have strong liquidity. This approach aims to diversify risk and ensure the availability of customer funds, even though Wise is not a bank and its services are not subject to deposit insurance schemes like the FDIC in the U.S. or the FSCS in the UK.

Transparency and Support

Wise prioritizes transparency in its operations, particularly regarding fees and exchange rates. Before initiating a transaction, users are shown a clear breakdown of all associated costs, including any flat fees and percentage-based charges, ensuring no hidden surprises. Wise uses the mid-market exchange rate without adding a markup, contributing to cost-effectiveness for users. This commitment to clear pricing aims to build trust and empower users to understand the true cost of their transfers.

For customer assistance, Wise provides various support channels. Users can access a comprehensive online help center to find answers to common questions. If further assistance is needed, direct support is available through phone, email, and an online contact form. While live chat support may not always be available, phone support is offered 24/7, and email responses occur within 24 hours.