How to Save on Overseas Transactions with Wise in New Zealand

New Zealanders often pay steep hidden fees when making overseas transactions through traditional banks or cards. Whether you’re sending money abroad or spending in a foreign currency, banks like ANZ, BNZ, and Westpac often charge multiple fees – from international transfer fees to foreign currency conversion charges – that add up quickly. Fortunately, there’s a smarter way. In this guide, we’ll explore how Wise (formerly TransferWise) can help Kiwi consumers save money on overseas transactions, and provide a step-by-step walkthrough to get you started.

The Hidden Costs of Overseas Transactions

Bank fees for international payments: Most New Zealand banks charge an international transfer fee (often around $5–$20 per payment) plus “OUR” or correspondent fees in some cases. For example, ANZ charges a $5 fee for online transfers and up to $28 if you initiate a transfer in-branch. Even banks that advertise low or no upfront fees still make money on the exchange rate – by giving you a poorer rate than the real market rate. In fact, many providers lure customers with “0% commission” or “fee-free” transfers but then offer an unfavorable exchange rate, so you end up paying the difference without realizing it. MoneyHub notes that many NZ banks traditionally charged ~$20 per transfer, whereas online services like Wise charge only a fraction of that – and deliver better exchange rates.

Foreign currency transaction fees on cards: Using your NZ debit or credit card for purchases in a foreign currency can trigger overseas transaction fees around 1%–3% of the purchase amount. For instance, many NZ credit cards apply ~1.3%–2.5% currency conversion fee on each transaction (ANZ’s Visa debit fee is 1.3%, while some other cards charge closer to 2.5%). These fees may not sound huge, but they apply to every overseas purchase or ATM withdrawal, and they add up over a trip or months of online shopping. In addition, the exchange rates used by banks and credit card networks often include a hidden markup. Essentially, you lose on two fronts – an explicit percentage fee plus an implicit exchange rate margin.

Scenario: You buy an item online for USD $500 using your NZ bank credit card. If the bank’s forex fee is 2.5%, you pay an extra NZD $12.50 on top of any exchange rate markup. If the bank’s USD/NZD rate is 3% worse than the real rate, that’s another ~$15 lost in the conversion. In total, you might pay over NZD $25 extra for this one transaction, without any clear notification.

Why these costs matter: These hidden fees mean your money doesn’t go as far. Whether you’re sending $1,000 to family overseas or paying for a hotel in London, banks often take a cut of around 3–5% through fees and poor rates. Over time, that could be hundreds or thousands of dollars that stay with the bank instead of in your pocket or your recipient’s. Clearly, minimizing these costs is crucial for anyone making regular international transactions.

Why Wise Is Cheaper for International Payments

Mid-market exchange rate: Wise is known for using the real mid-market exchange rate, with no markup. This is the fairest rate you can get – the same rate you’d see on Google or XE.com. In contrast, banks, PayPal, and traditional money exchangers often conceal a markup in the rate they offer. That markup might be a few cents off the true rate (e.g. giving you NZD/GBP 0.47 instead of 0.50), but it means losing money on every dollar exchanged. Wise doesn’t do that – you get the real rate, so more of your NZD is converted to the foreign currency you need.

Lower and transparent fees: Instead of hefty percentages or surprise deductions, Wise charges a small, upfront fee that’s clearly shown before you send. In many cases, Wise’s fee is around 0.4%–0.6% (depending on currency), a fraction of what a bank might effectively charge. MoneyHub’s research found that banks charge around 1.8% to 2.8% on currency conversions for card transactions, whereas Wise’s conversion fee is about 0.5% for major currencies. In other words, Wise can be 3–5 times cheaper than using a typical bank card overseas. Likewise for transfers, instead of paying $15–$20 plus a poor rate, you might pay NZD $5–$10 total with Wise and get the real exchange rate – saving a huge amount on a sizable transfer.

No hidden surprises: With Wise, what you see is what you get. All fees are broken down for you before you confirm a transaction. If you’re sending money abroad, Wise’s interface will show the exact amount the recipient will receive in their currency, guaranteed. There are no “intermediary bank” charges siphoning off a chunk en route, because Wise uses a local-to-local transfer system (more on that next). This transparency is a key reason Wise consistently comes out as the cheapest option for international money transfers in independent comparisons.

How Wise works: Wise built a smart system where your money never actually crosses borders in the traditional sense. Say you’re sending NZD to the UK – you pay into Wise’s NZ bank account locally, and Wise pays your recipient from their local UK account in GBP. Because of this network of local accounts, Wise avoids the SWIFT network’s fees and delays. Essentially, it’s a domestic transfer at both ends, so it’s faster and cheaper. As a result, recipients often get more money and get it faster. (Over 50% of Wise transfers are completed instantly, and 90% arrive within a day, far quicker than the 2–5 day norm for many bank wires.)

Real-world savings example: Imagine you need to send NZ$1,000 to Australia to pay for a holiday booking. A major NZ bank might charge a $10 transfer fee, and use an exchange rate that is, say, 3% worse than the mid-market rate (a hidden cost of ~$30). Your Australian recipient could end up with significantly fewer AUD. With Wise, you’d pay maybe NZ$5 in fees and get the true mid-market rate. According to Wise’s data, a NZ$1,000 transfer to AUD was about 7× cheaper with Wise than with the average bank once you account for fees and exchange rates. Similar trends hold for other currencies: sending NZ$1,000 to the UK or US was 4× cheaper via Wise than via a bank on average. Those savings mean your recipient receives more money, and less is lost to fees.

Step-by-Step: Getting Started with Wise

One of Wise’s strengths is how easy it is to set up and use. Follow these simple steps to start saving on your overseas transactions:

1. Create your Wise account: Visit the Wise website (or download the Wise app) and sign up for a free account. You can register with an email address, or log in via Google/Apple. The process only takes a few minutes.
2. Verify your identity: Because Wise is a regulated financial service, you’ll need to complete a one-time identity verification (e.g. uploading a photo of your passport or driver’s license). This is to comply with NZ regulations and keep your account secure. Wise’s verification is usually pretty quick – once done, you’re ready to use all features.
3. Set up your transfer or account funding: To send money overseas, log in to Wise and start a “Send Money” transfer. Enter the amount in NZD and select the target currency (e.g. GBP for the UK). Wise will immediately show you the current exchange rate, their fee, and the amount the recipient will get, so you can compare and be confident in the value. Add your recipient’s bank details (for the UK, you’d need a name, their IBAN or account number & sort code). If you’re loading your Wise multi-currency account for future use (say, to get a good rate now or to spend later), you can simply add money to Wise and hold it in NZD or convert to other currencies within the account.
4. Pay for your transfer: Wise offers multiple ways to pay. The cheapest is usually a direct bank transfer or POLi payment from your NZ bank account to Wise (the app will guide you through this). You can also pay via debit/credit card for convenience – Wise will show any small extra fee for card payment up front. For example, using a credit card might incur a ~0.3–0.5% additional fee (to cover card processing), but you’ll see this before confirming.
5. Wise processes and converts your money: Once you’ve sent NZD to Wise, they handle the rest. Wise converts your money at the mid-market rate (locking in the rate if you chose a guaranteed rate period) and pays out locally to your recipient. If you’re sending to the UK, Wise will transfer GBP from their UK account to your recipient’s bank account – often this is done within seconds or a few hours of your payment clearing, meaning your recipient could get the money the same day.
6. Optional – Get a Wise debit card for spending: If you also travel or shop online in other currencies, consider ordering the Wise debit card. It’s a MasterCard that links to your Wise multi-currency account. The card lets you spend in 150+ countries with no foreign transaction markup – you’ll always get the mid-market rate, and just pay Wise’s low conversion fee when you spend or withdraw cash. The one-off issuance fee in NZ is about $14 NZD. You can order the card from your Wise account, and it will be mailed to you. Once activated, you can tap or swipe globally and save ~1.5–2.5% on each purchase compared to using a typical bank card.
7. Track and manage: Wise provides instant notifications and detailed tracking. You can see exactly where your money is, or what exchange rate you received on a transaction. The transparency and convenience (like being able to freeze your card in-app if lost, or convert NZD to e.g. GBP ahead of time if you want to “lock in” a rate) give you full control over your international finances.

By following these steps, you’ll set yourself up to handle overseas transactions with ease and confidence – and avoid the common fees that Kiwi travelers and senders have begrudgingly accepted for years.

Putting It Into Practice: Examples of Saving

To really see the difference, let’s look at a couple of typical scenarios where Kiwis can save using Wise:

• Sending money to family overseas: Suppose you need to send NZ$2,000 to the UK to help a family member. At the time of transfer, the mid-market rate is 1 NZD = £0.50. With Wise, you’d pay a small fee (around NZ$10 in this case), and your recipient would get roughly £990 (since NZ$2,000 minus fees converted at 0.50). If you went through a bank, you might encounter a $5–$15 fee plus a weaker exchange rate. Many banks might offer around NZD 1 = £0.47 once their margin is applied. That would net your recipient only about £940 – a £50–£60 difference in what your loved one receives, purely due to fees and rate markups. It’s clear why more New Zealanders are opting for Wise’s better exchange rates so their money goes further.
• Travel spending: You’re on holiday in Europe and spend €1,000 across hotels, food, and shopping using your cards. If you use your NZ bank credit card, and it charges ~2% foreign transaction fee, that’s about €20 (≈ NZ$36) in fees, plus the exchange rate might be 1–2% worse than market, adding perhaps another NZ$30+ lost. With the Wise debit card, you would pay no percentage fee – just Wise’s tiny conversion fee (around 0.5%). On €1,000, 0.5% is only €5 (≈ NZ$9). In this example, Wise would save you around NZ$ fifty or more on your trip’s spending compared to a typical card. And if you stay under NZ$350 equivalent per month in ATM withdrawals, you wouldn’t pay ATM fees either (whereas NZ banks often charge $5–$6 per overseas ATM withdrawal).

These examples underscore how Wise can significantly cut the cost of overseas transactions – both in money transfers and day-to-day spending.

Final Tips for Saving Money on International Transactions

Always compare the total cost: Before sending money or paying abroad, compare providers. Don’t just look at advertised “no fees” – check the exchange rate offered. Use Google to find the real exchange rate and see how much markup a bank or service is adding. Wise makes this easy by using the mid-market rate and showing you any fee upfront. If you do compare, you’ll often find that even with occasional promotions from banks or Western Union, Wise still gives a better deal overall because it doesn’t hide charges in the rate.

Leverage Wise’s multi-currency features: If you frequently transact in certain currencies (AUD, USD, GBP, etc.), you can hold balances in those currencies in your Wise account. This lets you wait for a favorable rate to convert or avoid converting at all if, for example, you receive some income in GBP and can spend it directly from your GBP balance. This flexibility can protect you from unfavorable exchange swings and fees.

Watch out for “fee-free” traps: Providers like banks or PayPal might advertise “no transfer fee” or a first transfer free. Always remember, if there’s no explicit fee, the cost is likely hidden in a worse exchange rate. There’s no such thing as a completely free international transfer – someone is always taking a cut. Wise’s approach is honest: a small fee and a fair rate. That transparency means you can trust what you’re paying and not worry about surprises.

Keep an eye on bank policy changes: NZ banks have been reacting to competition. For instance, BNZ recently removed its $5 fee for online international payments and now covers overseas bank charges for those transfers. This is great for customers, but exchange rate markups still remain. Even if your bank drops fees, always check how their exchange rate compares to Wise. In many cases, banks still take around a 2% margin on the rate. Wise’s low fee plus real rate often beats a “no fee” bank transfer when you do the math.

By staying informed and using modern services like Wise, Kiwis can save a lot on overseas transactions – keeping more money in their own pockets (or delivering more to loved ones abroad). Next, we’ll address a few common questions to solidify your understanding of using Wise in New Zealand.

Frequently Asked Questions (FAQ)

Q: What are the fees for international transactions with NZ banks vs. Wise?
A: Traditional NZ banks often charge a combination of upfront fees and hidden exchange rate margins. You might pay a flat fee between $5 and $20 per transfer with a bank, plus the recipient or intermediary bank may deduct additional fees. On top of that, banks usually use an exchange rate that’s 2-4% worse than the mid-market rate (this difference is how they make extra profit). Wise, on the other hand, charges one low transparent fee (for example, about 0.5% of the amount) and always converts money at the mid-market exchange rate with no markup. In practice, this means sending money with Wise often costs significantly less than with a bank, and you can see the exact fee and rate before you send.

Q: How do I use Wise to send money overseas from New Zealand?
A: Using Wise is straightforward. First, sign up for a Wise account online or via the Wise app. After verifying your identity (a quick, one-time process), you can initiate a transfer by entering the amount in NZD and the destination country/currency. Wise will show you the fee and the precise amount the recipient will get. You then pay Wise locally (e.g. via bank transfer, POLi, or card). Wise converts your NZD at the real exchange rate and sends the money from their account in the destination country to your recipient – often within minutes or hours. You can also hold balances in various currencies and even order a Wise debit card for convenient spending.

Q: Is Wise safe to use for international money transfers in NZ?
A: Yes – Wise is regulated in New Zealand (and in every country it operates in) and employs bank-grade security to protect your funds. In NZ, Wise is registered with the Financial Markets Authority as a remittance provider. Globally, Wise serves over 17 million customers and moves billions of dollars safely, so it’s a trusted platform. When you send money with Wise, your funds are held in established financial institutions and safeguarded. Additionally, Wise’s transparency (showing you all fees and rates upfront) gives users extra peace of mind. Thousands of Kiwis use Wise regularly for overseas transfers and have had excellent experiences with its reliability and support. As always, practice standard online safety (secure passwords, two-factor authentication) and you can be confident in Wise’s service.

Start Saving on Your International Transfers Today with Wise!

Don’t let hidden bank fees eat into your transfers. Take control of your overseas transactions with Wise — the smarter, cheaper way to send money and spend internationally. Whether you're sending money abroad, paying for overseas purchases, or transferring funds to family, Wise guarantees the real exchange rate, low transparent fees, and fast, secure service.

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