Being an international company is now the norm for startups, from remote working to international customers or suppliers, most startups need to send and receive money internationally, and manage any currency exchange.
Wise and Revolut both serve the same basic need of sending money internationally and exchanging currencies at the same time. Which one is right for your business?
Revolut - Helpful added features like subscription management, and good value if you regularly send £10k.
Wise - Great for one offs and low frequency, especially if you have simple business needs.
Wise is the slightly older of the pair, starting in 2010, and firmly establishing itself as a low-cost transfer service. In 2021 it rebranded to Wise, with the intention of moving away from just transfers.
Wise has very transparent pricing, with no monthly commitment, which makes it perfect for bootstrapped startups with intermittent needs. That being said, later-stage companies are still finding Wise to be suitable for them, as the known costs and virtual payment cards make setting up online payments straightforward.
Revolut started in 2015 but has gained popularity with individuals, which slowly trickles into business life. Unlike its consumer product though, the business plan gives very little for free.
It has worked to go beyond just international transfers, with a rewards area, dedicated app, and both virtual and physical payment cards. The ability to manage employees' virtual cards as well as canceling redundant subscriptions within the app make it an attractive option for start-ups who want a slick UX.
Revolut is known for giving the live rate, although at weekends, on the free plan or using more than your plan allows, means you get charged extra fees of between 0.4% and 2% plus any transaction fees (usually around £3 per transaction). On the positive side, because it offers tiered plans, with an FX allowance, if your monthly spend is around the top end of that allowance, it can prove to be the cheapest route for you.
One thing to remember is holding funds with either, comes with some points to be aware of. Holding over €70,000 incurs a daily charge (specifically EUR, not other currencies). Neither holds full banking licenses, so your funds are covered in segregated accounts. This means in the event of a default, you still have access to your funds.
As to which is right for you, the needs of your company will dictate which is better, or you may want to consider alternatives (yes, there may be a cheaper, slicker and faster route depending on what you need). Both offer lower costs for international transfers than you can expect to get from your bank, which is at least a starting point!
We have found from talking to hundreds of founders and their teams, that comparing these kind of costs falls down the to-do list pretty fast. Switching banks is usually met with a look of pain and horror. If you are switching, because it makes financial sense to do so, remember to consider the time and effort to do so, the 2 we compared have much faster onboarding than a bank, but it's still not a pain-free processes. The key here is not to just optimise for cost, but also for time saved in your day, and the freedom to get back to doing what you do best, running your business!
Important things to think about when making your revenue forecasts.
A five-step plan for startups looking to make their mark in the USA.