In today’s rapidly changing economic landscape, managing personal finances wisely is more important than ever. For many, the challenge lies in navigating the complexities of foreign currencies and the opportunities they present. 

As someone who has actively sought to optimize my financial strategy, I’ve found that holding cash in USD and GBP through Wise (formerly TransferWise) offers not only security but also a smart way to hedge against local economic fluctuations.

In this blog post, I’ll share my journey of using Wise in Malaysia, detailing how I leverage its multi-currency account and convenient debit card to store and manage my cash in USD and GBP. 

What is Wise?

Wise (formerly known as TransferWise) is a financial technology company that specializes in international money transfers and multi-currency accounts. 

Founded in 2011, Wise aims to make cross-border payments cheaper, faster, and more transparent compared to traditional banks. 

Wise provides a convenient and cost-effective solution for individuals and businesses needing to handle money across borders, making international finance more accessible and manageable.

Why Choose USD and GBP?

When it comes to holding cash in foreign currencies, two standout options are the US Dollar (USD) and the British Pound (GBP). 

Here’s why these currencies can be particularly advantageous for Malaysians looking to diversify their financial portfolios:

1. Stability and Trust

The USD is often regarded as the world’s primary reserve currency, widely accepted across the globe. Its stability is bolstered by the strength of the US economy and the backing of the Federal Reserve. 

Similarly, the GBP has a long history of being a reliable currency, supported by the robust UK economy. 

This trust in these currencies can provide peace of mind, especially during times of economic uncertainty.

2. Hedging Against Local Economic Risks

By holding funds in USD and GBP, you create a buffer against potential devaluation of the Malaysian Ringgit (MYR) or local economic downturns. 

In Malaysia, the ringgit can be susceptible to fluctuations based on global market trends and domestic factors. Keeping cash in more stable currencies can help preserve your purchasing power.

3. Opportunities for Growth

Investing in USD and GBP can open doors to various investment opportunities in their respective markets. 

For instance, many global investments and assets are denominated in USD, including stocks, bonds, and commodities. Similarly, GBP-denominated assets can offer unique investment avenues, particularly in the real estate and equity markets of the UK. 

By holding these currencies, you can capitalize on growth opportunities that might not be as accessible with local currency investments.

4. Ease of Transactions

With platforms like Wise, transferring money in and out of USD and GBP accounts is seamless. 

Whether you’re making international payments, purchasing goods, or investing, the ease of handling these currencies can simplify your financial transactions. 

Additionally, holding a Wise multi-currency account means you can quickly convert MYR to USD or GBP at competitive exchange rates, reducing the friction often associated with currency exchange.

5. Global Purchasing Power

Having funds in USD or GBP enhances your purchasing power internationally. Whether you’re traveling, shopping online, or investing abroad, these currencies are recognized and accepted globally, making transactions smoother and often more cost-effective.

How to Use Wise in Malaysia

Using Wise (formerly TransferWise) in Malaysia is a straightforward process that allows you to send money, hold multiple currencies, and spend internationally with ease. 

Here’s a step-by-step guide on how to make the most of Wise:

1. Creating Your Wise Account

• Download the App or Visit the Website: Start by downloading the Wise app on your smartphone or visit the Wise desktop site.
• Sign Up: Register with your email address, or use your Facebook, Apple, or Google ID. The registration process is quick and user-friendly.
• Verify Your Identity: Complete the verification process by uploading a valid identification document, such as your passport or MyKad. This step is essential for compliance with regulatory requirements.

2. Adding Money to Your Wise Account

• Open Your Account: Once logged in, navigate to your Wise account.
• Select the Currency Account: Choose which currency you want to add money to (e.g., MYR, USD, GBP).
• Add Funds: Click on the “Add” button, enter the amount you want to add, and select your payment method (bank transfer, FPX, or other options).
• Complete the Payment: Follow the on-screen instructions to finalize the payment.
• Convert Currency: If you wish to convert funds from MYR to USD or GBP, select the “Convert” option, enter the amount you want to convert, choose the target currency, and confirm the transaction.

3. Sending Money Internationally

• Initiate a Transfer: Select “Send” in the app or “Send Money” on the website.
• Choose Funding Source: Decide whether to send from your Wise balance or add money directly from your bank account.
• Select Currencies: Choose the currency you want to send from and to.
• Enter Transfer Details: Specify the amount, recipient’s details (bank account or email address), and confirm the payment type (personal transfer, service payment, etc.).
• Review and Confirm: Check the details, add a message for the recipient if desired, and confirm the transfer. Your money will be on its way!

4. Receiving Money

• Get Account Details: To receive funds, go to the currency account you wish to receive money in (e.g., USD) and click on “Get account details.”
• Provide Your Details: Share these account details with the sender, allowing them to transfer money directly to your Wise account.

5. Using the Wise Card

• Order Your Wise Card: You can order a Wise Visa card through the app or website for convenient spending. There’s a one-time fee (currently RM13.70).
• Activate the Card: After receiving your physical card, activate it by making a chip and PIN purchase or cash withdrawal.
• Spend and Withdraw: Use your Wise card for purchases in over 150 currencies, with the advantage of automatic currency conversion at the best rates. Withdraw cash from ATMs (first two withdrawals per month up to RM1,000 are free).

6. Monitoring Your Transactions

• Track Spending: Keep an eye on your transactions through the app, which provides instant notifications for every spending activity.
• Manage Your Balances: Easily view and manage your currency balances, ensuring you stay within the holding limits set by Wise for Malaysian customers (maximum of RM20,000).

7. Safety and Security

• Regulated Provider: Wise is fully licensed and regulated under Malaysian law, ensuring that your money is safe.
• Fraud Protection: The platform employs advanced security measures, including 2-step verification and transaction notifications, to keep your account secure.

Potential Drawbacks and Considerations

While Wise offers numerous advantages for managing international finances, it’s essential to be aware of some potential drawbacks and considerations before fully committing to the platform. 

1. Transfer Limits and Fees

• Daily and Monthly Limits: Wise limits are set according to the currencies involved. If you’re sending a payment from MYR to another currency, you’ll usually find the following limits in place:
  • Malaysian citizens and expats – RM30,000 per day
  • Foreign workers – RM5,000 per month
• Fees on Transfers: Although Wise generally provides competitive fees compared to traditional banks, there are still charges for certain types of transfers and currency exchanges. Wise always uses the mid-market exchange rate, which is the one you’ll find on Google. In addition there are 2 other fees which are split out clearly:
  • Fixed fee: This covers the base costs associated with the transaction, like transfer processing fees. The fixed fee varies depending on the currency and payment method but is typically a low, flat amount (e.g., a few cents or MYR for Malaysian ringgit transfers). It’s not a percentage, but rather a fixed amount for each transfer.
  • Variable fee: This covers the cost of the currency exchange. For major currencies this can be in the region of 0.4% to 0.6% of the transfer value.

2. Limited Availability of Some Currencies

• Currency Options: While Wise supports a wide range of currencies, it does not offer every currency available globally. If you need to transact in a less common currency, you may have to look for alternative solutions. Examples would include Argentine Peso (ARS) and Bermudan Dollar.
• Withdrawal Options: Certain currencies might have restrictions on withdrawals, impacting your ability to access funds when needed.

3. Dependency on Internet Access

• Online-Only Access: Wise operates primarily through its website and app, which means you need a stable internet connection to access your funds or conduct transactions. In areas with limited connectivity, this could pose challenges.
• Digital Literacy: Users must be comfortable navigating online platforms, which could be a barrier for those who prefer traditional banking methods.

4. Not a Full Banking Service

• Limited Banking Features: Wise is not a full-fledged bank; it does not offer features such as credit or loans. If you require comprehensive banking services, you may need to complement Wise with a traditional bank account.
• No Interest on Balances: Funds held in your Wise account do not accrue interest, which can be a consideration if you’re looking for ways to grow your savings.

5. Potential Delays in Transactions

• Transfer Times: Although Wise aims to facilitate quick transfers, delays can still occur due to various factors such as currency conversion processes or regulatory checks. It’s important to plan your transactions with enough time to accommodate possible delays.
• Payment Methods: Some payment methods may lead to longer processing times, impacting how quickly you can access your funds.

6. Regulatory Considerations

• Compliance and Regulations: Wise is subject to financial regulations in the countries it operates in, which can affect the availability of services or transaction limits. Changes in regulations may impact your ability to use the platform as you currently do.

Conclusion

In an increasingly globalized world, Wise offers an innovative and efficient way for Malaysians to manage their money across currencies. 

With its competitive fees, user-friendly interface, and ability to hold and exchange multiple currencies, Wise is an excellent choice for anyone looking to simplify their international transactions. 

Share your experiences with Wise in the comments below—how has it changed the way you handle your finances?

Drop a comment below to share your thoughts, or feel free to reach out directly to me via email [email protected] 

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