Is Wise a Bank? Short answer: no, it is not. The company does not hold a UK banking licence and balances are not protected by the Financial Services Compensation Scheme (FSCS).
Long answer: Wise is not a bank as it does not lend out customer deposits to third parties. It is primarily a low-cost international money transfer app that allows users to save money when sending money abroad.
However, Wise provides some of the features that banks also provide, such as holding and exchanging multiple currencies, sending and receiving payments, and a linked card.
Wise offers three main products: Wise Account, Wise Business, and Wise Platform.
Why do people ask “Is Wise a Bank?”
The firm is defined as a Money Services Business. With a Wise account it is possible to hold a balance of funds in more than 40 supported currencies. However, this money is not protected by the standard FSCS guarantee, which covers balances up to £85,000 per eligible person, per bank.
Wise lets customers send payments to more than 80 countries and spend internationally with the Wise card. Local bank details are provided for up to nine currencies including US dollars, pound sterling, euros,
Wise was launched as Transferwise in 2010 as a peer to peer currency network, helping to revolutionise money transfer services, which had formerly been dominated by Western Union.
The group has since grown to provide money transfers to over 15 million customers sending more than £9 billion a month.
Its transfers work by matching up buyers and sellers of currency in different countries, rather than moving money internationally.
The latest Good Money Guide review of the app in August found Wise to be “one of the cheapest and easiest ways to send money abroad”.
One criticism was that the firm does not have a telephone number and as such it is not possible for customers to contact the firm this way if there is a problem with a transfer.
If you are looking for a bank account in the UK, you can see a list of current bank account switching offers below:
| Bank Account | Switching Offer |
|---|---|
| Halifax | 0% overdraft interest for 6 months |
| Santander | £150 cash incentive (needs balance of at least £1,500) |
| Chase Bank | At the moment, Chase Bank isn’t offering customers any special deals or rewards to make the switch. Customers who switch over will gain access to 1% AER on their current Chase Bank account. |
| Monzo | £10 referral bonus for both individuals |
| Monese | Not part of the Current Account Switching Service. £5 for each referral to both individuals, up to £150 |
| Curve | 1% cashback up to £15 when you open an account with Curve. Each qualifying referral also gets 1% cashback for 30 days. |
| Revolut | £20 sign-up reward after qualifying first purchase |
| Barclays | 25,000 Avios when you switch to Barclays |
| Nationwide FlexDirect | £175 reward when £1,000 deposited and a qualifying payment is made |
| First Direct 1st Account | £175 reward |
| Lloyds Bank | 3 months 0% interest free overdraft |
| TSB Spend & Save | £5 per month cashback for six months if 20 debit card payments are made each calendar month |
| Co-Op Bank | No switching offer |
| Starling Bank | There are no switch deals currently available through Starling Bank, however their current account does offer 3.25% interest on balances of up to £5,000. |
| Metro Bank | There are currently no switch deals on offer at Metro Bank. Their current account has no monthly fees, but charges 34% interest on overdrafts. |
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
