Is Wise safe? Taking a closer look at the leading transfer app

Those transitioning from traditional banking to newer fintech services can surely appreciate the latter’s numerous advantages, first of all, their speed, cost, and convenience. However, some users might (and do) question if they provide adequate security. While taking one’s online safety seriously is necessary, properly licensed and regulated fintech providers offer bank-level protection. Let’s have a look at Wise, one of the largest international remittance service providers globally. What kind of security policies does it implement? Is a Wise money transfer safe? What is Wise’s user rating? With Wise as a case study, in this article we highlight the points one should pay attention to when choosing a safe remittance service.

Choosing a trusted service

Among the major worries for online fintech service users are whether this provider can be trusted and who is responsible if something goes wrong. After all, an online experience seems much more ‘ephemeral’ than a visit to a brick-and-mortar bank. Still, there are several important indicators that show if the provider is legitimate, including but not limited to:

• Officially licenced and supervised by a national financial authority
• Timely certified by the industry standards
• Employs up-to-date IT security protocols and systems
• Collaborates with trusted financial institutions and systems
• Has a high rating on user review platforms.

If this information is easy to find and it can be cross-checked, then in most cases the provider is safe. So, is Wise safe?

What is Wise?

Wise is a fintech company offering a range of products with a focus on international money transfers. Based in the UK, it was founded in 2011 as TransferWise and rebranded as Wise ten years later. From a fast-growing startup offering remittance services it has transformed to a large public entity (and the largest tech listing in the UK) serving individuals, businesses, and enterprises. Available in more than 160 countries, Wise works with 40 or so currencies and offers various payment options such as direct debits, wire transfers, debit/credit cards and Google/Apple Pay (availability depends on the country). According to Wise, it is not a bank since it does not lend money to its clients, but one can open an account with Wise, including a business one, exchange currency, and even invest for profit (although without Wise’s protection and at their own risk).

It operates both as the Wise banking app and web-based service. Wise claims its major advantage is its network of local bank accounts which helps it to bypass many intermediaries for international transfer of funds. Thanks to that, it is able to offer comparatively lower fees for its services with the same level of insurance. Wise’s charges are indeed much lower than those of the traditional banks and remittance services, but that is typical for the majority of fintech alternatives. At the same time, some competitors manage to operate with even lower margins than Wise, as pointed out by multiple industry-related sources including Forbes.

Products

Wise offers three basic levels of products:

• Wise Account for individuals
• Wise Business for business payments
• Wise Platform for financial enterprises

There are also some additional investment-related services such as Wise Interest.

What is free with Wise:

• Signing up and opening an account
• Same-currency transfers between Wise accounts
• Two ATM withdrawals of up to €100 each per month
• Getting Wise account details
• Receiving money (depending on the currency and locations)

Examples of paid services provided by Wise

*The exact number depends on the currency

Signing up with Wise

One can register either in the Wise banking app or on the website and do it with an email address, Apple or Google ID, or Facebook details. To make Wise secure, after providing some personal information such as their full name, date of birth, email, and mailing address, the new user must verify their identity before they can proceed to adding funds to their account or setting up a money transfer.

The standard procedure is to submit scans/photos of an ID and a selfie complemented, if needed, by a proof of address and banking documents in case of large transfers as per the Wise safety protocols. The verification is usually completed within 2 working days, which is considered rather long in the fintech world. Once done, the user can send, receive, and exchange money in their Wise account.

Safety and security

Verifying the user’s identity before any transaction is made is the first condition for Wise being secure. But is Wise safe as a service provider? Below some relevant features are listed.

Regulation. To ensure its clients’ safety, Wise is subject to bank-level regulations across the globe. For example, it is licensed and supervised by the Financial Conduct Authority (FCA) in the UK, the Financial Crimes Enforcement Network (FinCEN) in the US, and by the National Bank of Belgium and the Estonian Financial Supervision Authority in Europe.

Safeguarding money. As a regulated financial service provider, Wise is obliged to ‘safeguard’ its clients’ money in dedicated accounts in top-tier banks, such as JP Morgan Chase in the US or Deutsche Bank in Europe, and separately from its own capital. This serves as an insurance that Wise is not using customers’ money for their own operations.

Real-time notifications. The Wise banking app immediately notifies the user about any transaction that takes place. Anti-fraud and security teams are at the core of the Wise safety system. They monitor all transactions in real time for untypical and/or suspicious activities.

Two-step verification for transactions. This measure requires the user to provide not only their password but also an additional code, which can be delivered as a text message, a phone call, or a notification in the app. There is also an option to link the Wise account with a third-party authentication app, such as Google or Microsoft Authenticator, and get the code from there. So, as a Wise account protection, even if one of these factors is compromised, no transaction is possible without the other, ensuring the Wise app is safe even if the password has been leaked or the device is lost.

3DS for card payments. Under the so-called 3D security protocol, to complete a transaction involving a card payment, the user must additionally prove their identity by providing a password, a code, or a PIN, to ensure their safety with Wise.

SOC 1 type 2, SOC 2 type 2 audit. The ‘System and organisation control’ is a special kind of audit for organisations that hold, store, or process information of their clients and may impact their clients’ financial position. SOC 1 evaluates the organisation's financial reporting, SOC 2 the security and protection of customer data. While this audit is not a requirement, it contributes to making Wise more secure.

PCI DSS certification. The implementation of the Payment Card Industry Data Security Standard is a requirement for any organisation that deals with cardholder data and thus, is part of customer insurance by Wise. It is aimed at reducing payment card fraud by increasing respective security controls.

ISO 27001 certification. This is an international standard to manage information security, and, as the name suggests, it regulates the operation of an information security management system within the Wise safety framework.

GDPR compliance. For its customers in Europe, Wise protection includes full compliance with the EU General Data Protection Regulation focused on individuals' control over their personal information.

Industry and user reviews

A major booster to Wise’s rating is a price comparison page on its own website, where it favourably compares its fees to those of major traditional banks and ‘old-school’ providers such as Western Union and MoneyGram. Notably, Wise is also reported to be behind such ‘independent’ comparison sites as Exiap and Currencyshop.

More objectively, on Trustpilot, a popular European customer review platform, Wise’s rating is 4.3 out of 5. Of the reviews, around 80% are five stars out of five. Most commonly, the users are happy with how fast they can transfer money and how user-friendly the Wise banking app is, with some praising Wise’s safety. At the same time, around 10% of Wise rating reviews are one or two stars. The complaints include those on the impossibility to recover funds if lost, and unhelpful customer support (also noted by Forbes in its review).

Alternatives

Wise may be secure and fast, but it is not the only one like that on the market. Profee is an EU-licensed Electronic Money Institution regulated by the Central Bank of the Republic of Cyprus. A user-friendly solution for international online money transfer services, Profee rigorously and timely implements all industry standards and regulations including the GDPR, PCI DSS, 3DS, and so on.

The service is available as an iOS/Android app and through a web-based interface on www.profee.com. The registration only takes a couple of minutes, and the first transfer can be sent immediately after, without the identity verification (it is needed only after certain transfer limits are reached). Covering over 60 destinations globally, Profee offers one of the most competitive foreign exchange rates thanks to its in-house monitoring system. Profee is always transparent about its fees and displays the final amount the recipient gets before any money is sent. Moreover, to destinations such as Brazil and Nigeria there are currently no transfer fees plus a special conversion rate on the first transfer (the latter is also valid for India, Mexico, and Vietnam among others).

Profee also scores 4.4 out of 5 on Trustpilot which is higher than the Wise’s rating of 4.3. Sign up with Profee to see why an overwhelming majority of the reviewers, 84%, have awarded it with five stars, securing it an ‘Excellent’ grade.