Wise Receiving Global Payments Questions and Answers 1 — Questions and Answers
Question 1: A US-based freelancer provides their Wise USD account details to a client in New York. The client needs to pay an invoice of $2,500. To ensure the freelancer receives the full amount with no deductions from Wise, which payment method should the client use?
- International SWIFT transfer
- Domestic wire transfer
- ACH (Automated Clearing House) transfer (Correct answer)
- Sending a physical check to a Wise processing center
Correct answer: ACH (Automated Clearing House) transfer
Wise does not charge a fee to receive a domestic ACH transfer into a user's USD account details. In contrast, receiving a domestic USD wire transfer incurs a fixed fee, and international SWIFT transfers also have receiving fees. Wise does not accept physical check payments.
Question 2: A business in Canada wants to pay a supplier in Germany. The supplier provides their Wise EUR account details (an IBAN). The Canadian business sends the payment in Canadian Dollars (CAD) directly to the supplier's EUR account details. What is the most likely outcome of this transaction?
- The payment will be received and automatically converted to EUR with a small fee.
- The payment will be held by Wise pending currency confirmation from the recipient.
- The payment will be rejected and returned to the sender because only EUR can be sent to EUR account details. (Correct answer)
- The payment will be processed successfully with no fees for either party.
Correct answer: The payment will be rejected and returned to the sender because only EUR can be sent to EUR account details.
Wise account details are specific to the currency they are issued for. For example, EUR account details (IBAN) can only receive payments sent in EUR via the SEPA network or specific SWIFT payments. Sending a different currency, like CAD, directly to these details will result in the payment being rejected and sent back to the originator.
Question 3: Which of the following statements is true regarding receiving fees for international (SWIFT) payments into a Wise account?
- Wise waives all receiving fees for SWIFT payments under $1,000.
- The sender's bank is solely responsible for all fees associated with a SWIFT transfer.
- Wise charges a fixed fee for receiving SWIFT payments, and intermediary correspondent banks may also deduct their own fees. (Correct answer)
- Receiving SWIFT payments is free for all currencies, as the cost is covered by the sender's Wise subscription.
Correct answer: Wise charges a fixed fee for receiving SWIFT payments, and intermediary correspondent banks may also deduct their own fees.
Wise charges its own fixed fee for receiving an incoming SWIFT payment, which varies by currency. Additionally, SWIFT transfers often pass through intermediary (or correspondent) banks before reaching Wise, and these banks may deduct their own processing fees from the transacted amount, which is outside of Wise's control.
Question 4: A user is expecting a large payment of over $100,000 USD from a foreign client. What action might Wise be required to take upon receiving these funds to comply with financial regulations?
- Automatically convert 10% of the funds into the user's local currency.
- Place a permanent hold on the funds until the user upgrades to a premium account.
- Request additional information about the user's relationship with the sender and the purpose of the payment.
- Report the user to tax authorities for receiving a large international payment. (Correct answer)
Correct answer: Report the user to tax authorities for receiving a large international payment.
As a regulated financial institution, Wise is required to understand the nature of large transactions to prevent money laundering and other financial crimes. For a large incoming payment, they may ask the recipient to provide documentation or an explanation regarding the source and purpose of the funds. This is a standard compliance procedure.
Question 5: A freelance graphic designer living in Australia wants to receive payments from clients in the UK (GBP), the Eurozone (EUR), and the United States (USD) as if they were a local in each region. What feature of the Wise account makes this possible with zero receiving fees for local bank transfers?
- The Wise international debit card.
- The ability to hold balances in over 40 currencies.
- The issuance of local bank account details for multiple currencies. (Correct answer)
- The 'Request a Payment' link feature.
Correct answer: The issuance of local bank account details for multiple currencies.
Wise provides users with unique, local bank account details (e.g., a UK sort code and account number for GBP, a European IBAN for EUR, and a US routing and account number for USD). By giving these details to clients in the respective countries, the clients can make a local bank transfer, which is free to receive into the Wise account.
Question 6: A Wise user in Canada has provided their CAD account details to a client within Canada. The client can pay via EFT (direct deposit) or domestic wire transfer. Which of the following is true regarding how Wise handles these incoming CAD payments?
- Both EFT and domestic wire transfers are received free of charge.
- EFT transfers are accepted, but domestic wire transfers will be rejected and returned to the sender. (Correct answer)
- Domestic wire transfers are preferred and processed faster for a small fee.
- Only payments sent via Interac are accepted to CAD account details.
Correct answer: EFT transfers are accepted, but domestic wire transfers will be rejected and returned to the sender.
Wise's local CAD account details are set up to receive EFT credits (direct deposits) and Interac payments. They are not configured to receive domestic wire transfers. If a domestic wire is sent to these details, the payment will be rejected and returned, often with a fee deducted to cover processing.
Wise Receiving Global Payments Questions and Answers 1
A US-based freelancer provides their Wise USD account details to a client in New York.
The client needs to pay an invoice of $2,500.
To ensure the freelancer receives the full amount with no deductions from Wise, which payment method should the client use?