TransferWise is an online money transfer fintech company. What’s great about them is they try to be transparent with their fees for transferring money internationally. They promise the best exchange rate possible, but they do charge fees for ACH bank transfers that are otherwise free for regular banks. In most cases they are cheaper than using wire transfer through your bank or services like Western Union or MoneyGram. They also offer a product called the Borderless account which allows you to have multiple currencies in your account. It also comes with an ATM/debit card you can use internationally. This service seems to be popular with so-called digital nomads. I guess this is also a good account for getting cash when you are travelling internationally.

Now, an ATM/debit card from Charles Schwab is one of the most highly recommended cards for international travelers, primarily because Schwab refunds ATM fees worldwide. These are fees that the ATM machine charges you on top of your withdrawal even if your bank itself does not charge any other fee.

In the Philippines, ATM fees for foreign bank cards are at least PHP 200 or about $4. Needless to say, this amount is pretty exorbitant. If you’re making multiple withdrawals, the fees will easily add up to a significant amount.

In terms of ATM fees, the Charles Schwab ATM card beats TransferWise hands-down. TransferWise also limits you to $250 USD withdrawal every 30-day rolling period before they charge you a 2% fee. Again, Charles Schwab comes out as the winner in this regard.

Now, if you have access to a fee-free ATM and if you do not need to withdraw more than $250 every 30 days, the relevant point of comparison between TransferWise and Charles Schwab would be the effective exchange rate you receive. One day last week, I withdrew from both accounts minutes apart to compare. At that time, TransferWise was quoting a PHP 51.19 to USD 1 rate, while xe.com had 51.2182 PHP.

I withdrew PHP 15000 from Schwab. This deducted $293.04 from my account for an effective rate of PHP 51.18755 to USD 1. On the other hand I withdrew PHP 1000 from TransferWise and while they indeed used the quoted PHP 51.19 rate, they applied a currency  conversion fee of USD 0.11, since I don’t have PHP balance in my account. Ultimately, USD 19.65 was withdrawn from my account for an effective rate of PHP 50.89 to USD 1. Had I withdrawn the same PHP 15000 the fee would have been USD 1.72, with the same effective rate of PHP 50.89 to USD 1. The currency conversion fee appears to be about 0.577%. Again, Charles Schwab beats TransferWise.  In both cases I used an HSBC ATM which does not charge any extra fee.

ACCOUNT	PHP WITHDRAWN	USD DEDUCTED	EXCHANGE RATE
TransferWise	1,000	19.65 (includes 0.11 conversion fee)	51.19 Effective 50.89 with conversion fee
Charles Schwab	15,000	293.04	51.18755

If your main use for such an ATM card is to withdraw cash with the best exchange rate, I think Schwab is the best choice. If you’re an American, you can open a Schwab account with no minimum balance. You are able to transfer to to the account using ACH transfers fee-free, unlike with TransferWise. Note that Schwab may have a problem if it starts to think that you’re permanently living abroad and may require you to open a proper Schwab International account.

On the other hand TransferWise may have features that you may find useful, so it’s still worth checking out. In terms of international money transfer fees, I think they are very competitive. But  I think the Charles Schwab ATM is superior as a travelers ATM card. Other alternatives to Charles Schwab that offer competitive exchange rates and zero foreign transaction fees for ATM withdrawals include Capital One 360 checking and Fidelity Cash Management accounts. The latter also refunds ATM fees.