Wise provides Hong Kong entrepreneurs with a low-cost, efficient way to manage international payments, offering transparent fees, real exchange rates, and a multi-currency account that supports over 50 currencies. It's an ideal solution for businesses looking to streamline cross-border transactions.
A common question we get asked when clients open a company in Hong Kong is recommendations to a cost-effective solutions to manage their international payments. Whether you’re paying suppliers, receiving payments from clients, or managing payroll for remote teams, the ability to handle cross-border transactions seamlessly is essential.
One of the most popular solutions in this space is Wise (formerly known as TransferWise), a global fintech company that has gained significant traction for its transparent fees and real exchange rates.
But is Wise the best option for Hong Kong entrepreneurs? Let’s take a comprehensive look at its features, benefits, and potential drawbacks.
What is Wise?
Wise is a financial technology company founded in 2011 with the mission to make international money transfers more affordable and transparent. Unlike traditional banks, which often charge high fees and offer poor exchange rates, Wise uses the mid-market exchange rate—the rate you see on Google or Reuters—without any hidden markups.
This makes Wise particularly appealing for businesses that frequently deal with cross-border payments.
For Hong Kong entrepreneurs, Wise offers a range of services that could simplify international transactions, reduce costs, and streamline financial management. But let’s dive deeper into the specifics.
Key Features & Services for Entrepreneurs in Hong Kong
1. Multi-Currency Account
One of Wise’s standout features is its multi-currency account, which allows businesses ( and many of our clients at ATHENASIA ) to hold, send, and receive money in over 50 currencies.
This is particularly useful for Hong Kong entrepreneurs who work with international clients or suppliers.
Here’s how it works:
Hold Multiple Currencies: You can hold balances in different currencies, such as USD, EUR, GBP, AUD, and more. This allows you to avoid unnecessary conversion fees when making payments or receiving funds.
Local Account Details: Wise provides local bank account details in 9 different currencies, including USD, EUR, GBP, and AUD. This means you can receive payments like a local in these currencies, without incurring conversion fees. For example, if you have clients in the United States, you can provide them with a USD bank account number, and they can pay you as if you were based in the U.S.
Low Fees: Wise is known for its low, transparent fees. Unlike traditional banks, which often charge a percentage of the transfer amount plus a markup on the exchange rate, Wise charges a small percentage fee based on the currency pair. The exact fee is clearly displayed before you make the transfer, so there are no surprises.
2. Global Reach for Businesses
For businesses that operate internationally, Wise offers a range of features designed to make cross-border payments easier:
Pay Suppliers and Contractors: With Wise, you can easily send payments to suppliers, contractors, or employees in different countries. Whether you’re paying a manufacturer in China or a freelancer in Europe, Wise allows you to send money quickly and at a lower cost than traditional banks.
Mass Payments: If your business needs to make multiple payments in different currencies, Wise’s mass payment feature can save you time and effort. This is particularly useful for businesses that have a large number of international transactions, such as e-commerce companies or service providers with global clients.
3. Integration with Accounting Software
Wise integrates seamlessly with popular accounting software like Xero and QuickBooks, making it easier to manage your finances. This integration allows you to automatically sync your Wise transactions with your accounting software, reducing the need for manual data entry and helping you keep track of your cross-border payments more efficiently.
4. Wise API for Automation
For tech-savvy entrepreneurs, Wise offers an API that allows you to automate payments directly from your platform. This can be particularly useful for businesses that need to make repetitive payments, such as payroll or supplier payments. By integrating Wise’s API into your system, you can streamline your payment processes and reduce the risk of human error.
The Process of Using Wise in Hong Kong
1. Account Setup
Setting up a Wise business account is relatively straightforward. Entrepreneurs need to sign up on the Wise platform and complete the Know Your Customer (KYC) verification process.
This involves submitting business documents, such as your company registration certificate, and identification for the business owners. Once your account is verified, you can start using Wise to send and receive money.
2. Transferring Money
When making a transfer, Wise allows you to specify the currency you want to convert and the recipient’s details. The platform will show you the exact amount being transferred and the fees involved, all using the real exchange rate. Payments can be made using various methods, including bank transfers, credit cards, or local payment systems like FPS (Faster Payment System) in Hong Kong.
3. Receiving Money
With Wise’s multi-currency account, you can receive payments in major currencies like USD, EUR, and GBP without incurring conversion fees. This is particularly beneficial for businesses that have international clients, as it allows you to avoid the high fees typically associated with receiving foreign payments.
Security & Compliance
One of the most important considerations for any business handling international payments is security. Wise is regulated by multiple financial authorities worldwide, including Hong Kong’s Customs and Excise Department for money services.
The company complies with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, ensuring that your transactions are secure and compliant with local laws.
Security Features:
Two-Factor Authentication (2FA): Wise uses 2FA to add an extra layer of security to your account.
Encryption: All transactions are encrypted, ensuring that your financial data is protected.
Reputable Financial Institutions: Wise stores your funds in reputable financial institutions, giving you peace of mind that your money is safe.
Reviews & Reputation
Wise has built a strong reputation for transparency and reliability. With over 4 million reviews on Trustpilot and an average rating of around 4.5 stars, Wise is highly regarded by users worldwide.
Customers appreciate the platform’s low fees, real exchange rates, and user-friendly interface.
Pros:
Lower Fees: Wise offers much lower fees compared to traditional banks, making it a cost-effective option for businesses.
Real Exchange Rates: Wise uses the mid-market exchange rate, so you don’t have to worry about hidden markups.
Quick Transfers: For major currencies, transfers are often completed within the same day or the next day.
Easy-to-Use Platform: The platform is intuitive and integrates seamlessly with accounting software.
Cons:
Not Always the Fastest: While Wise is generally fast, it may not be the quickest option for exotic currencies or during weekends and public holidays.
Limited Customer Support: Wise’s customer support is mostly online, which may be a drawback for businesses that prefer in-person assistance.
No Physical Branches: Unlike traditional banks, Wise does not have physical branches, which could be a disadvantage for businesses that prefer face-to-face interactions.
Benefits for Hong Kong Entrepreneurs
1. Cost Savings
For startups and small businesses, Wise’s low fees can make a significant difference. Traditional banks often charge high fees for international transfers, and services like PayPal can also be expensive.
Wise’s transparent fee structure and real exchange rates can help businesses save money on cross-border payments.
2. Efficiency
Wise’s mass payment feature, API integration, and accounting software compatibility make it easier for businesses to manage their international transactions. This can save time and reduce the administrative burden of handling cross-border payments.
3. Global Presence
For businesses that work with international clients or suppliers, Wise’s multi-currency account can reduce the friction of cross-border payments.
By providing local account details in multiple currencies, Wise allows businesses to receive payments without incurring conversion fees.
Negatives to Consider
1. No Credit Facility
One of the main drawbacks of Wise is that it does not offer credit cards or lending options for businesses. Entrepreneurs looking for business financing solutions will need to look elsewhere.
2. No Physical Branches
While Wise’s online platform is easy to use, some businesses may prefer the option of visiting a physical branch for customer support. Wise does not have any physical locations, so all customer service is handled online or through phone support.
3. Not Always the Fastest
While Wise is generally fast, it is not always the quickest option, particularly for exotic currencies or during weekends and public holidays. Businesses that need instant transfers may need to consider alternative solutions.
Conclusion: Is Wise the Best Option for Hong Kong Entrepreneurs?
For Hong Kong entrepreneurs who need to manage international payments, Wise offers a compelling solution. Its low fees, real exchange rates, and multi-currency account make it an attractive option for businesses that work with international clients or suppliers. The platform’s integration with accounting software and API capabilities also add to its appeal, particularly for tech-savvy entrepreneurs.
However, Wise may not be the best option for businesses that require credit facilities or prefer in-person customer support. Additionally, while Wise is generally fast, it may not be the quickest option for all currencies.
In conclusion, Wise is an excellent choice for Hong Kong entrepreneurs looking for a cost-effective, user-friendly solution for managing cross-border payments. However, it’s important to weigh the pros and cons and consider your specific business needs before making a decision.
