Is Wise Safe in 2024? How to Use Wise Safely for Money Transfers & More

Since hitting the digital finance scene in 2011, Wise has become one of the most accepted money-transferring services on the market.

Whether you are a retailer looking to build out your digital wallet or just want a Wise account to conduct transactions of your own, you probably have one major question in mind: “Is Wise safe?”

Although the Wise app falls under the umbrella of peer-to-peer (P2P) payment solutions, it is unique in that it focuses on transactions that transcend borders. Wise allows its users to conduct transactions encompassing 40 different currencies and across 160 countries.

On that note, join us below as we explore the Wise platform and its user safety using insights from entities like the Financial Crimes Enforcement Network (FinCEN) and the UK Financial Conduct Authority.

We’ll also discuss some alternatives that may be a good fit for your money transfer needs in case Wise isn’t the best choice for you.

What Is Wise, and How Does It Keep Your Money Safe?

Formerly known as TransferWise, Wise is a service that allows you to translate money from your native currency into another. You can then perform a Wise money transfer at a lower cost than doing so at a traditional bank.

Contrary to what you might think, though, that doesn’t mean that Wise accounts are less safe than those offered by traditional financial service providers. Wise keeps its customer funds and user accounts safe by holding them in dedicated bank accounts or as government bonds and other secure liquid assets.

When you conduct an electronic money transfer with Wise, the transactions will likely show up as “Community Federal Savings Bank” on your bank account statement, keeping things consistent and easy to recognize.

Is Wise Safe and ‘Legit’ in 2024?

With a basic understanding of the service under your belt, we now come to the main question: Is a Wise money transfer safe?

You’ll be happy to know that, as of 2024, Wise remains a safe and entirely legitimate financial service provider. The entity is registered as an electronic money institution with FinCEN as well, which helps keep money safe from domestic and international criminals.

However, it must be said that Wise did, in fact, experience some turbulence in both 2022 and 2023. Specifically, the brand’s Chief Financial Officer stepped down after its Chief Executive Officer took a leave of absence.

C-suite shake-ups like these are not unusual for a company as big as Wise, but losing both its CEO and CFO in such close proximity made some wonder about the organization’s short-term stability.

Despite these circumstances, Wise has come out strong in 2024. It remains a popular option among consumers who need a secure way of sending funds abroad and has also gained traction with business owners looking to get more sales. Regardless of which camp you fall into, you can rest easy knowing Wise is a safe option for your finances.

How to Set Up a Secure Wise Account

Creating a personal Wise account is relatively simple.

First and foremost, you must register online. And in order to do that, you’ll need a passport, national ID card, or driver’s license. You will also have to provide some personal information, such as your name and date of birth. Before you get there, you’ll have to decide whether you want to open a personal account or a business account. You can open another account later if you wish as well.

Next, you will have to complete a verification process. Wise uses two-factor authentication to help keep its accounts safe from outsiders. That means you’ll have to enter a code that they’ll send you via email or text.

In many cases, Wise will then bill one or two microtransactions to your bank account. Usually, both of these amounts are less than $1 each and feature random numbers. As part of the verification process, you will have to provide these transaction amounts.

After that, you are ready to set up and send payments. The first-time process should take around 15 minutes or less, and from there, you can send subsequent payments in just minutes. You can also receive payments and transfer the funds from your Wise app to your verified bank account.

Setting up a Wise business profile will involve similar steps. However, you will have to provide some details about your company. Once you get going, you’ll be able to integrate Wise with popular accounting tools like Intuit QuickBooks and top point-of-sale (POS) systems.

Is it Safe to Send Large Amounts of Money With Wise?

Users can safely send large amounts of money using the Wise app.

The platform offers low transfer fees, and its exchange rates are competitive, too, making it a good option when you need to make international payments or receive overseas payments from clients or trading partners.

Despite that, however, the Consumer Financial Protection Bureau (CFPB) has previously warned against storing large sums of money on services like CashApp and Venmo. While they didn’t specifically mention Wise in that warning, you should probably apply the same concept to all digital payment solutions. After you’ve received a large payment, go ahead and transfer the funds to your primary financial institution, just to be safe.

How Does Wise Protect Your Personal and Financial Data?

Wise takes data security seriously, being equipped with several layers of protection, including end-to-end encryption and secure servers. Additionally, the company conducts regular security audits, which help proactively mitigate the risks of cybersecurity threats.

The organization is also registered with FinCEN and the UK Financial Conduct Authority, as previously mentioned, as well as several other international organizations. Each of these entities has a track record of holding electronic financial institutions accountable for complying with strict regulatory guidelines.

Finally, Wise undergoes constant audits from independent auditors in both finance and IT to ensure that your data and funds are as safe as possible.

These external protections, alongside Wise’s internal efforts to protect your data, allow for peace of mind when using the platform for personal or business applications. Nevertheless, it’s always wise to monitor your digital payment accounts for suspicious activity and enable push notifications so that you receive immediate notice of any transactions.

Should I Give Wise My SSN?

Naturally, you may be a little skeptical any time a company asks for your Social Security Number (SSN). However, many entities, including Wise, are legally required to obtain your SSN for identity verification purposes, especially if you intend to use your account to send large amounts of money.

Remember, Wise is a federally regulated financial institution. Therefore, they are held to a higher standard for information security and consumer protection. The company is incentivized to keep your data safe, as failing to do so can result in fines, regulatory penalties, and long-term reputational damage.

Still, you should always ensure you are using a private internet connection before entering your SSN. Consider activating a trusted Virtual Private Network (VPN) as well. Even though Wise itself is secure, a compromised connection could expose your SSN to bad actors.

Common Wise Scams and How to Avoid Them

Keeping your digital wallet and Wise account safe means familiarizing yourself with the various threats lurking over the horizon.

To that end, some of the biggest dangers for Wise users include the following:

Phishing

Phishing attacks involve sending fraudulent communications (most often emails) in hopes of tricking recipients into revealing their personal information. Some phishing emails can be extremely convincing, as they are worded well and even have usernames that mimic official company email addresses.

As such, you must exercise caution when opening any emails that seem suspicious. Always check the full email address, not just the username that gets displayed. And if you receive an email asking for your Wise login credentials or other personal information, don’t click on any links. Instead, visit the Wise website (Wise.com) and log into your account. From there, contact the Wise support team to verify whether the email was legitimate.

There’s no harm in taking the extra few minutes to make sure you don’t get scammed.

Identity Theft

Phishing emails are one tool for committing identity theft, but they aren’t the only way that bad actors perpetrate such a crime. Other approaches involve stealing your information in a massive data breach and then using that data to open fraudulent lines of credit or accounts.

Identity theft has become increasingly common in the P2P payment space. According to a FinCEN analysis of identity-related suspicious activity in 2021, roughly $212B in peer-to-peer payments were flagged for suspicious activity related to identity.

To be clear, not all of these incidents were conducted on Wise alone, nor were they all confirmed identity theft cases. Nevertheless, that statistic still illustrates that solutions providers and regulators, both nationally and abroad, are struggling to keep pace with the rapidly evolving P2P payment ecosystem. Therefore, it’s important to be extremely mindful of identity-related threats when using any money-transferring platform.

Unauthorized Access

Incidents concerning unauthorized access may involve someone physically accessing your Wise app and conducting unauthorized activity on it. Alternatively, they may remotely access your account using stolen credentials or other illegal tactics. Either way, the results can be catastrophic, which is why we suggest moving any money you receive through Wise off of the platform as soon as you can.

Fake Customer Support

If you ever receive a suspicious call, email, or message claiming to be from Wise support, do some digging. Remember, real support staff aren’t going to ask you for your full SSN or complete bank account and routing numbers. They should already have access to such information and will only need you to verify your identity by providing a portion of the data in question (i.e., the last four digits of your SSN).

When in doubt, hang up and call the Wise support line directly. The company should have records of any outbound support calls, and the support team can also help you get to the bottom of any fraudulent activity. One common trick these scammers use is to spoof the official Wise customer support number, trying to convince you that they are the real customer support. Never trust this as anyone can spoof any number. Just go to Wise.com and contact customer support there to make sure you are in the right hands.

Tips for Using Wise Safely and Securely

Having gotten your Wise app set up, it’s important to follow a few established best practices to keep your money safe. For starters, always verify a recipient’s information before pressing Send. Transactions are almost instant, so if you have a typo in the account and routing information, you might send the money to a complete stranger.

Also, make sure you make use of the two-factor authentication feature on your account. Even if someone steals your login credentials, they won’t be able to log in and access your funds unless they also obtain the secondary verification code.

On the subject of credentials, the most important tip is to keep your login details private and complex. Never choose easy-to-guess passwords, and avoid using information like birthdays, anniversary dates, or your pet’s name as a password as well.

Wise Alternatives for International Money Transfers

If you don’t feel as though Wise is the platform for you, the good news is that there are plenty of online payment alternatives out there, such as:

PayPal

PayPal is one of the most well-known and widely-used online payment solutions in the world. The platform has multiple subsidiaries, including Venmo, and it also supports international payments.

Xoom

Xoom, another PayPal service, is a direct competitor to Wise. It offers many of the same features and a user-friendly interface, making it a good option for both personal use and business. If you are already familiar with PayPal and are happy with its capabilities, Xoom can be a great addition to your digital wallet.

CashApp

The CashApp platform offers some overseas functionality. And though it’s not a true alternative for international money transfers, you can still use your Cash Card in supported countries without incurring extra transaction fees. Just keep in mind that you can only use standard CashApp features in the United States and the United Kingdom.

Frequently Asked Questions About Wise and Its Safety

Below are a few FAQs about Wise and the level of protection it offers:

Are Wise Accounts FDIC Insured?

As discussed earlier, Wise is registered with FinCEN as an electronic money institution, which means it is regulated in many of the same ways as banks and credit unions. Nevertheless, it is not a bank, which means it’s not insured by the Federal Deposit Insurance Corporation.

Still, Wise is safe, largely because your funds are held in safe liquid assets (like treasuries) or deposited in highly-rated financial institutions. In any case, if you want to enjoy the benefits of FDIC insurance, simply transfer your Wise funds to your primary financial institution as soon as you receive a deposit. This is why it’s generally a good idea to move funds straight to your bank account once you receive them in Wise.

How Does Wise Keep Customers’ Money Safe?

Wise uses a combination of encryption, multi-factor authentication, and robust auditing protocols to help keep its users’ money safe. The former two assist with preventing fraud and other criminal activity, whereas the latter allows the company to detect potential vulnerabilities within its infrastructure.

However, it’s important to be diligent about protecting your assets yourself. Be careful about sharing your personal information, keep your device locked when not in reach, and log out of the Wise app in between uses.

What Happens if Wise Goes Bankrupt?

Since all of the money Wise accounts handle is protected in financial institutions or backed by secure assets, you should be able to recover most, if not all, of your funds in the event that the organization goes under. However, that process could take several weeks or months, depending on the nature of the bankruptcy filing and other variables. Again, this problem is essentially nullified if you just always move money straight to your bank account once you receive it (unless you get extremely unlucky and it goes under while a transfer is going through).

Is Wise Safer Than Traditional Banks for International Transfers?

Wise offers a comparable level of safety to traditional banks when conducting international transfers. However, a federally insured bank may provide some additional protections that aren’t available through Wise.

Fortunately, as touched upon earlier, the platform offsets some of these shortcomings by depositing your funds with top-tier financial institutions or backing them with liquid assets like government bonds.

Is Wise the Right Choice for Your Money Transfer Needs?

At the end of the day, Wise offers plenty of features, a user-friendly transfer process, and many other perks that make it an appealing option for international money transfers. If you are searching for a safe, secure, and cost-effective option to send and receive money across borders, you should explore the Wise app as a solution and then compare it to its alternatives to find the best fit for your intended use case.