Wise, formerly known as Transferwise, is a London-based fintech company that offers multi-currency accounts capable of sending and receiving money.
Wise accounts can hold and convert money in 54 currencies, allowing the account holder to create “artificial” bank accounts for various countries. Imagine the flexibility of having a US, Euro, Canadian, and countless regional bank details in one account.
Wise is regulated by FINTRAC which is an agency that is responsible for facilitating the detection, prevention, and deterrence of money laundering, terrorist activity financing, and other threats.
However, Wise is not a bank, therefore your money is not financially protected by schemes such as the CDIC, FDIC, and FSCS, that insure your money if something happens to Wise. Without this protection, there is a possibility that you won’t get your money back if Wise closes. (Although there is a very low chance of this happening).
On the other hand, Wise safeguards your money by depositing funds at banking institutions. Overall, Wise is a trusted company that has been around for 11 years. The company is transparent and serves a large customer base. Here is a quote from their website regarding this issue.
What would happen if Wise became insolvent? The protections afforded by safeguarding stay in place even in the unlikely event that Wise were to become insolvent. However, if this happens, some of this money might be used by an insolvency administrator to pay for their own costs. This means the money returned to you could be lower than the total amount you had in your account. It might also take some time for that insolvency administrator to return the rest of your money back to you.
Wise is a great financial tool for anyone looking to send, receive, and convert money at affordable rates. Bundled with a multicurrency account, Wise comes in handy for a frequent traveler, contractor, seasonal employee, or anyone looking to have international bank accounts. It’s genius.
Kenyon Ndezi is a recent graduate, writer, creator of vividbay.com, and the owner of Neonbuild.com, which is a company focused on building apps for small businesses and individuals. Follow along and get inspired!
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