Wise (Formerly TransferWise) vs Monzo – Fees, Exchange Rates & Comparison Guide For 2024
Updated February 4, 2024
- Wise vs Monzo: The Fees
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- Wise vs Monzo: The Money Transfer Options
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- Monzo vs Wise: The Exchange Rates
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- Monzo vs Wise: Getting Started With the Platforms
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- Wise aka TransferWise vs Monzo
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- Frequently Asked Questions
- Final Thoughts
There are several financial companies that can provide alternatives to the brick-and-mortar banks – and two of these are Monzo and Wise.
Wise was launched in 2011 to offer a way for customers to make cheap international bank transfers.
You can open a multi-currency account through the Wise app, and use it to transfer money internationally, transfer between currencies and use it for spending at home and abroad.
Monzo is a relative newcomer to the challenger bank world. Created in 2016 by several ex-Starling Bank employees, Monzo started as a prepaid Mastercard that you could top up via the app and use for spending and withdrawals abroad.
Monzo became licensed by the FCA in 2017 and began offering typical banking features, in a “bank that lives in your smartphone”.
In this article, we will look at the different features of an account with Wise and with Monzo (aka TransferWise vs Monzo), including things like fees, account opening and exchange rates so that you can decide which is best for you.
Wise vs Monzo: The Fees
Wise
You can open a Wise account for free, and there are no ongoing monthly fees or subscriptions. When it comes to the Wise card vs Monzo, if you want a contactless card for your Wise account, you will need to pay £5.
Although you can make two free withdrawals every month (up to the value of £200), any withdrawals after that will be subject to a 1.75% charge as well as fixed fee of £0.50.
Wise charges a varying fee for currency exchange – depending on the currency and amount, this can be between 0.35% and 2.00% of the exchanged amount. If you want to transfer money in the same currency, there is a fixed fee of £0.32.
You can mitigate some of these fees by transferring funds into one of the 10 currencies that you can hold in your Wise account, and when you spend abroad there are no more charges (other than the exchange rate, which doesn’t have a markup).
Wise makes its fee structure transparent, and there is a calculator available so you can see how much each transaction is going to cost you before you start.
Monzo
You can open a Monzo account online for free.
There are three different types of personal account at Monzo. The Monzo Basic account is free with no ongoing costs, while the Plus account costs £5 per month (with a three-month minimum subscription) and the Premium account costs £15 per month (with a six-month minimum subscription).
There are no fees for spending money abroad in the European Economic Area (EEA). The first £200 you spend outside of the EEA is free on the Basic account, and after that you will need to pay a 3.00% fee.
When it comes to international payments, Monzo uses Wise – so the fee structure is the same as Wise, with the same calculator available.
You can top up your Monzo account using the app for free, but if you want to make a cash deposit (using a PayPoint service), you will be charged a £1 fee.
Withdrawals are free, but if you withdraw more than £250 within 30 days in the UK or EEA, there is a 3% fee.
In terms of the Wise card vs Monzo, with Monzo you’ll get a card for free as part of the account opening process, but if you lose your card you will have to pay £5 for a replacement.
Wise vs Monzo: The Money Transfer Options
Wise
With Wise, you can transfer money within the same country and to more than 140 other countries – and you have access to 10 base currencies within the account, which makes it much easier to send money in that currency and to spend when you are in the country.
You can exchange money into 54 currencies, and top up your account in 19 currencies, using bank transfer, card and Apple or Google Pay.
Transfer speeds can vary; you can pay for faster service and get the money delivered in as little as three hours, while a cheaper service is available which takes up to five working days.
Monzo
As a licensed bank, money transfers are usually fast and free – which means that you can send money to UK accounts immediately without any costs.
International transfers are managed by Wise and follow the same rules and timeframes – but Monzo only allows you to hold money in GBP – so you will have to use the currency exchange service to send money abroad.
You can top up your account using another bank account, but if you want to pay in cash you will have to pay the standard fee – and as there are no physical branches, you will need to use a PayPoint service to do so.
Monzo vs Wise: The Exchange Rates
Wise
Wise uses the exact mid-market price at the time of the exchange as its currency exchange rate, and it does not add a markup to this – so you can make exchanges through the week and the weekend without incurring extra fees (apart from its percentage, which is clearly explained).
When you are making an exchange, you will be able to see the exchange rate that is being used.
Monzo
Monzo uses the standard Mastercard exchange rate for purchases made abroad. This ranges from 0.35% to 2.00% and can be between 0.1% and 0.7% cheaper than the exchange rates offered by Visa.
Monzo vs Wise: Getting Started With the Platforms
Wise
Opening an account with Wise is simple and straightforward – and it all takes place within the app.
You can get through the whole process in a matter of minutes, although it can take a few days for your card to arrive if you decide to order one. There is no cost to opening an account with Wise.
The Wise app is available on iOS and Android, and it is a simple and easy-to-use system.
Although Wise is known to be a money exchange service rather than a bank (it does not have an FCA banking licence), it does offer certain benefits aside from its international currency exchange.
You can categorise your spending in the app. You can also make use of savings jars to help you manage your money – just be aware that your funds are not FSCS protected.
Another service that is offered by Wise is the ability to set up direct debits, which could make it more useful for those who want to use it more like a normal banking app.
Monzo
Monzo offers free and fast account opening that takes place completely online. You will have to provide photographic ID and proof of address, but its algorithms and facial recognition systems take much of the time out of opening an account.
All the banking functions you need take place in the Monzo app – and you can download it to your smartphone. Apps are available for both Android and iOS.
Monzo offers many of the same features that you would find in a brick-and-mortar bank, including an overdraft facility and loan options (subject to status).
Some other benefits of Monzo include:
- Salary sorter
- Spending budgets and notifications
- Monzo Flex which allows you to spread payments for big expenditures
There are four savings pots available with reasonable interest rates, and there are business accounts as well as an account aimed at 16 to 17-year-olds too.
Wise aka TransferWise vs Monzo
Wise
Wise has a total score of 4.1 stars on Trustpilot from a total of 198,357 customers. 83% of customers have given five-star reviews, while 7% have given one-star reviews.
Customers list the following as pros of Wise:
- Smooth transactions
- Fast execution and exchanges
- Easy to use
The customers who had a negative view of Wise described the following issues:
- ID verification was too lengthy and in-depth
- Some customer service issues relating to slower than expected payments
Monzo
Monzo has a score of 4.1 stars from 29,695 reviews on Trustpilot. 78% of users gave the company five stars, while 13% gave one star.
The positives about Monzo from customers include:
- Easy account setup
- App is easy to use
- Easy payments when you travel
Some of the negative reviews have mentioned:
- Problems with ID verification process
- Unhelpful customer support
Frequently Asked Questions
In terms of Wise vs Monzo, if you just want to make international transfers or spend abroad, then Wise might be the better option. If you are looking for an online challenger bank account, then Monzo might work better – and it is partnered with Wise for international transactions anyway.
For many people, the simple currency exchange and international funds transfer service that Wise offers is better than Monzo – especially if you already have a UK bank account that provides the same services as Monzo.
Monzo was launched by ex-Starling Bank employees. The company is partnered with Wise to allow customers to make simple international payments and currency exchanges.
Choosing which bank to use is a personal decision, so it is important to do your research to see if there are any banks that you feel would suit you better than Monzo. Some similar options include Revolut and Starling Bank.
Monzo is popular because it is a challenger bank that operates entirely online using an app, but it is FCA licensed and FSCS protected, which makes it a safer option than some of the other digital payment services that are available.
Monzo operates in much the same way as a standard UK bank, just completely online. One of the biggest downsides to Monzo is if you want to pay cash in, you need to do it at a PayPoint machine and a £1 flat fee is charged on every cash deposit.
The Monzo card should work anywhere that Mastercard is accepted – which means most merchants should accept it. However, some merchants do not update their payment systems often enough, which can lead to cards being declined.
Final Thoughts
New banking and money handling services have come onto the scene in the last decade or so, challenging the high street banks and giving customers more choice in their finances.
When considering Monzo vs Wise, both Wise and Monzo have a lot to offer customers, and the real difference comes down to what you want from your account.
If you are looking for simple international transfers and multiple currency options, then Wise is your best choice – but if you want a bank account with an FCA-licensed company and FSCS protection, as well as the usual banking services like an overdraft, then you might want to consider Monzo.
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