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Transferwise - boarderless bank a/c

Transferwise - boarderless bank a/c

Old Jun 2nd 2017, 8:56 pm
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Default Transferwise - boarderless bank a/c

Typing one handed on phone while BFing and failed dismally with copying and pasting link.

An ad in my FB feed about transferwise starting a multi currency bank account caught my eye. For some of you consultants it might be useful. Maybe to lots of us? Anyone else heard about this?
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Old Jun 2nd 2017, 9:35 pm
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Default Re: Transferwise - boarderless bank a/c

Where is the bank? Running my money through Transferwise's computers while my money moves in and out of client accounts at other banks is one thing, but I am not so sure about parking my money in an account at Transferwise Banking Corporation.

I would need to know more about where the bank is and how my money is protected. When there is apparently no shortage of people prepared to hold their money in a digital currency such as Bitcoin, which objectively speaking doesn't actually "exist", there may be many other people without the same concerns as me.

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Old Jun 2nd 2017, 10:39 pm
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Default Re: Transferwise - boarderless bank a/c

If it's borderless does that mean it's not foreign so is not reportable on fbar or 8938?

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Old Jun 3rd 2017, 2:48 am
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by Pulaski View Post
Where is the bank? Running my money through Transferwise's computers while my money moves in and out of client accounts at other banks is one thing, but I am not so sure about parking my money in an account at Transferwise Banking Corporation.

I would need to know more about where the bank is and how my money is protected. When there is apparently no shortage of people prepared to hold their money in a digital currency such as Bitcoin, which objectively speaking doesn't actually "exist", there may be many other people without the same concerns as me.
Does "real" money actually exist? I've never been comfortable since we came off the gold standard.

Agree, I'd want to understand how this is protected, remembering the whole Iceland troubles and who was going to guarantee all that at the time which impacted lots of UK folks.
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Old Jun 3rd 2017, 2:55 am
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Default Re: Transferwise - boarderless bank a/c

This isn't the article I originally saw, and actually is dated a week or so ago, but offers a little more info


https://www.ft.com/content/29adbe9a-3efd-11e7-82b6-896b95f30f58.

Don't know if I've inserted it properly as a link
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Old Jun 6th 2017, 9:01 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by Pulaski View Post
Where is the bank? Running my money through Transferwise's computers while my money moves in and out of client accounts at other banks is one thing, but I am not so sure about parking my money in an account at Transferwise Banking Corporation.

I would need to know more about where the bank is and how my money is protected. When there is apparently no shortage of people prepared to hold their money in a digital currency such as Bitcoin, which objectively speaking doesn't actually "exist", there may be many other people without the same concerns as me.
This from their Borderless Bank T&C

Holding A Balance in your TransferWise Account TransferWise is not a bank and your TransferWise Account is not a bank account. The specified bank account details that we provide to you in order for you to receive funds from third parties are for accounts held by TransferWise and its affiliates (and we will credit your TransferWise Account, which is held on your books, upon receipt of such funds), and are not for a bank account held by you. Value held as a balance in your TransferWise Account represents an unsecured claim against TransferWise and is not insured by the Federal Deposit Insurance Corporation (FDIC) or any other deposit protection scheme.
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Old Jun 7th 2017, 1:15 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by lansbury View Post
This from their Borderless Bank T&C

Holding A Balance in your TransferWise Account TransferWise is not a bank and your TransferWise Account is not a bank account. The specified bank account details that we provide to you in order for you to receive funds from third parties are for accounts held by TransferWise and its affiliates (and we will credit your TransferWise Account, which is held on your books, upon receipt of such funds), and are not for a bank account held by you. Value held as a balance in your TransferWise Account represents an unsecured claim against TransferWise and is not insured by the Federal Deposit Insurance Corporation (FDIC) or any other deposit protection scheme.
So the money isn't even held in a client account, as it would be if your money was held by a stockbroker, lawyer, or accountant.

I rest my case!

Last edited by Pulaski; Jun 7th 2017 at 1:19 pm.
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Old Jun 7th 2017, 4:34 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by Pulaski View Post
So the money isn't even held in a client account, as it would be if your money was held by a stockbroker, lawyer, or accountant.

I rest my case!
Scary isn't it.
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Old Jun 7th 2017, 4:38 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by lansbury View Post
Scary isn't it.
Er, yeah! ..... Personally it makes me feel less comfortable about using the Transferwise FX broker-remitting service.
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Old Jun 7th 2017, 5:06 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by Pulaski View Post
Er, yeah! ..... Personally it makes me feel less comfortable about using the Transferwise FX broker-remitting service.
Seems the brokerage side is better protected than the borderless bank. With the brokerage you only lose your money if Barclays folds.

I actually did a transfer yesterday and from sending them pounds to dollars being sent to me was 18 hours. Not to great an exposure.

How is my money protected?

TransferWise is an Electronic Money Institution and is required by law to keep your money safe by storing it in a low-risk financial institution (e.g. bank account). For example, for UK and European customers, your money is stored and safeguarded securely in our Barclays accounts in the UK.

This means that in the event that TransferWise were to become insolvent, your money is unaffected and will be refunded to you within 10 working days.

The main difference with the protection offered by TransferWise in comparison with a bank is that, because TransferWise is an Electronic Money Institution and not an official deposit taking Banking Institution, your money is not guaranteed by Financial Services Compensation Scheme (FSCS).

This means that in the event that the bank itself where we store the funds were to become insolvent, you may not be guaranteed the return of your funds, whereas you are normally guaranteed up to a value of 75-85k GBP with FSCS.
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Old Jun 7th 2017, 5:14 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by lansbury View Post
Seems the brokerage side is better protected than the borderless bank. With the brokerage you only lose your money if Barclays folds.

I actually did a transfer yesterday and from sending them pounds to dollars being sent to me was 18 hours. Not to great an exposure.

How is my money protected?

TransferWise is an Electronic Money Institution and is required by law to keep your money safe by storing it in a low-risk financial institution (e.g. bank account). For example, for UK and European customers, your money is stored and safeguarded securely in our Barclays accounts in the UK.

This means that in the event that TransferWise were to become insolvent, your money is unaffected and will be refunded to you within 10 working days.

The main difference with the protection offered by TransferWise in comparison with a bank is that, because TransferWise is an Electronic Money Institution and not an official deposit taking Banking Institution, your money is not guaranteed by Financial Services Compensation Scheme (FSCS).

This means that in the event that the bank itself where we store the funds were to become insolvent, you may not be guaranteed the return of your funds, whereas you are normally guaranteed up to a value of 75-85k GBP with FSCS.
Right, that is what I always understood about Tfw and most if not all other FX brokers - they move the money around, but don't take ownership of it, not even briefly.

Given that fact, I am not sure why even Tfw management think that offering this quasi bank service is a good idea?
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Old Jun 7th 2017, 6:24 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by Pulaski View Post
Right, that is what I always understood about Tfw and most if not all other FX brokers - they move the money around, but don't take ownership of it, not even briefly.

Given that fact, I am not sure why even Tfw management think that offering this quasi bank service is a good idea?
The money that is in the quasi bank the T&C given them to right to invest as they see fit and keep 100% of the profits. So they have a pool of other peoples money to invest for their own advantage. Nice racket if you can get away with it.

I think World First put the money in a client account. Certainly if I was moving large sums I'd use them for that reason.

Last edited by lansbury; Jun 7th 2017 at 6:26 pm.
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Old Jun 7th 2017, 6:31 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by lansbury View Post
The money that is in the quasi bank the T&C given them to right to invest as they see fit and keep 100% of the profits. So they have a pool of other peoples money to invest for their own advantage. Nice racket if you can get away with it.

I think World First put the money in a client account. Certainly if I was moving large sums I'd use them for that reason.
I was reading a few days ago that Tfw already has pools of money in the countries it does business in, and the transfers are really only added to the pool in one country and tapped out of the pool in the other, so there isn't actually money moved between countries in most cases.

From time to time Tfw might need to make movements to rebalance the pools if money is tending to move in one direction.
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Old Jun 7th 2017, 6:35 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by lansbury View Post
I think World First put the money in a client account. Certainly if I was moving large sums I'd use them for that reason.
Transferwise keep transfer money in a client account as per your #10 above. The uncertainty is about this quasi-bank thing. I found their website to be hopeless for finding out what it is really all about. It is difficult to determine what info relates to transfers and what to the borderless account and/or both.
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Old Jun 7th 2017, 6:38 pm
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Default Re: Transferwise - boarderless bank a/c

Originally Posted by Pulaski View Post
I was reading a few days ago that Tfw already has pools of money in the countries it does business in, and the transfers are really only added to the pool in one country and tapped out of the pool in the other, so there isn't actually money moved between countries in most cases.
That's why their transfers are so quick.
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