Wise vs. Mercury: Which Payment Solution is Better?

The fintech industry has witnessed immense innovation, with global investment in fintech reaching $111.8 billion in 2018, a 120% increase from 2017.

Tools like Wise and Mercury are driving this innovation by providing accessible financial solutions for businesses and individuals alike.

They empower startups, small businesses, and individuals to manage finances efficiently, offering features like affordable international transfers (Wise) and tailored banking services (Mercury), thus democratizing financial services. So what’s the difference between this payment solutions?

The main difference is that Wise specializes in international money transfers and currency exchange, providing affordable cross-border payment solutions globally. Mercury is a business banking platform designed for startups and small businesses, offering domestic banking services tailored to US-based businesses. While Wise facilitates international transactions, Mercury focuses on providing comprehensive banking solutions for domestic operations.

Wise vs. Mercury: Overview of Key Features Comparison

Let’s place both payment solutions side-by-side and compare the seven key features using a table.

What is Wise and How Does it Work?

Wise, formerly known as TransferWise, is an online money transfer service that allows users to send money internationally at a low cost. It works by matching your transfer with someone else sending money in the opposite direction, thereby avoiding hefty international transfer fees.

Pros of Wise:

• Low transfer fees.
• Transparent exchange rates.
• Fast transfer times.
• Multi-currency account.
• Virtual debit card available.

Cons of Wise:

• Limited to personal and business transfers.
• Not suitable for large business transactions.
• Limited banking features.

What is Mercury and How Does it Work?

Mercury is a business banking platform designed for startups and small businesses. It provides FDIC-insured bank accounts, virtual cards, and integration with accounting software to streamline financial operations.

Pros of Mercury:

• Tailored for startups and small businesses.
• FDIC insurance on deposits.
• Virtual cards for online transactions.
• Seamless integration with accounting software.
• Free domestic and international wire transfers.

Cons of Mercury:

• Limited to US-based businesses.
• No physical branches.
• Limited lending options.

Complete Core Features Comparison: Wise vs. Mercury

If you’re still skeptical about these payment solutions, here’s an expanded comparison guide between Wise and Mercury.

1. International Transfers:

Wise excels in international money transfers, offering competitive exchange rates and low fees compared to traditional banks. With Wise, users can send money to over 80 countries worldwide, with transfers typically processed within 1-2 business days. The platform uses the mid-market exchange rate, providing transparency and ensuring that users get the best possible rate for their transfers.

Additionally, Wise offers multi-currency accounts, allowing businesses to hold and manage funds in multiple currencies without incurring additional fees. Overall, Wise is an excellent choice for businesses with international operations looking to streamline their cross-border payments.

On the other hand, Mercury does not offer international money transfer services, focusing solely on domestic banking for US-based businesses. While Mercury provides fast and free domestic wire transfers, it lacks the capability to facilitate international transfers. Therefore, businesses requiring international payment capabilities may find Wise to be the more suitable option.

Verdict: Wise is the clear winner for international transfers, offering competitive rates and a wide range of supported countries compared to Mercury’s US-centric focus.

2. Currency Exchange:

Wise provides efficient currency exchange services, allowing users to convert funds at the mid-market exchange rate with low fees.

The platform offers transparent pricing, showing users the exact exchange rate and fees before they make a transfer.

Additionally, Wise’s multi-currency accounts enable businesses to hold and manage funds in multiple currencies, avoiding currency conversion fees for frequent international transactions. Overall, Wise’s currency exchange services are user-friendly and cost-effective for businesses dealing with multiple currencies.

In contrast, Mercury does not offer currency exchange services, limiting its functionality to domestic banking for US-based businesses.

While Mercury provides FDIC-insured accounts and virtual cards, it lacks the capability to facilitate currency exchange transactions. Therefore, businesses requiring currency conversion services for international transactions may prefer Wise over Mercury.

Verdict: Wise emerges as the winner for currency exchange, offering transparent pricing and multi-currency accounts compared to Mercury’s lack of currency conversion services.

3. Business Banking:

Wise primarily focuses on international money transfer services and does not offer comprehensive business banking solutions. While Wise does provide business accounts with features like multi-currency support and integration options, its banking offerings are limited compared to dedicated business banking platforms.

On the other hand, Mercury is tailored specifically for startups and small businesses, offering a wide range of business banking services. These include FDIC-insured accounts, virtual cards, expense tracking, and seamless integration with accounting software like QuickBooks and Xero.

Mercury’s business banking platform is designed to streamline financial operations for businesses, providing essential banking services without the complexity of traditional banks.

Verdict: Mercury is the clear winner for business banking, providing comprehensive banking solutions tailored to the needs of startups and small businesses, while Wise primarily focuses on international money transfers.

4. FDIC Insurance:

Wise does not offer FDIC insurance, as it is not a bank. However, funds held in Wise accounts are safeguarded in segregated accounts, providing a level of security for users’ funds. While Wise takes measures to ensure the safety of funds, it does not provide the same level of protection as FDIC insurance.

In contrast, Mercury offers FDIC insurance on deposits, providing added security and peace of mind for users’ funds. With Mercury, users can rest assured that their deposits are protected up to the maximum limit allowed by the FDIC, reducing the risk of loss in the event of a bank failure.

Verdict: Mercury is the clear winner for FDIC insurance, providing an added layer of security and protection for users’ funds compared to Wise’s lack of FDIC insurance.

5. Virtual Cards:

Wise offers virtual debit cards as part of its service, allowing users to make secure online transactions and track expenses.

These virtual cards can be easily generated and managed within the Wise platform, providing users with a convenient and secure way to make online purchases. Additionally, Wise’s virtual cards can be linked to specific currencies, making them ideal for businesses with international transactions.

Similarly, Mercury also provides virtual cards for secure online payments. These virtual cards offer added security by allowing users to generate unique card numbers for each transaction, reducing the risk of fraud and unauthorized charges. With Mercury’s virtual cards, businesses can easily manage expenses and track transactions without the need for physical cards.

Verdict: It’s a tie between Wise and Mercury for virtual cards, as both platforms offer secure and convenient virtual card options for online transactions.

6. Expense Tracking:

Wise allows users to track expenses within the platform, providing visibility into their spending and helping them manage finances effectively.

Users can categorize transactions, set spending limits, and generate expense reports, making it easier to track and manage business expenses. Additionally, Wise’s integration with accounting software allows for seamless expense tracking and reconciliation.

Similarly, Mercury offers robust expense tracking features to help businesses manage finances effectively. Users can categorize transactions, track spending in real-time, and generate detailed expense reports within the Mercury platform.

With Mercury’s expense tracking capabilities, businesses can gain insight into their spending habits and make informed financial decisions.

Verdict: It’s a tie between Wise and Mercury for expense tracking, as both platforms offer robust features to help businesses manage finances effectively.

7. Integration Options:

Wise integrates with various accounting and financial management software, allowing for seamless operations and efficient financial management. Users can connect Wise to popular accounting platforms like Xero, QuickBooks, and Wave, enabling automatic synchronization of transactions and streamlined reconciliation processes.

Additionally, Wise offers APIs for custom integrations, providing flexibility for businesses with unique integration requirements.

Similarly, Mercury offers integrations with accounting software like QuickBooks and Xero, allowing for seamless integration of financial data and streamlined accounting processes. Users can connect Mercury to their preferred accounting platform and automatically sync transactions, invoices, and expenses, saving time and reducing manual data entry errors.

Additionally, Mercury offers APIs for custom integrations, enabling businesses to tailor their integration solutions to meet their specific needs.

Verdict: It’s a tie between Wise and Mercury for integration options, as both platforms offer seamless integration with popular accounting software and provide flexibility for custom integrations.

Use Cases for Wise:

1. Freelancers and Remote Workers: Wise is ideal for freelancers and remote workers who need to receive payments from clients abroad and convert currencies at competitive rates.
2. International Businesses: Companies with international operations can benefit from Wise’s low-cost international transfers and multi-currency accounts for managing finances across borders.

Use Cases for Mercury:

1. Startups and Small Businesses: Mercury caters specifically to startups and small businesses, offering essential banking services tailored to their needs.
2. US-based Companies: Since Mercury is limited to US-based businesses, it’s an excellent choice for companies operating solely within the United States.

Wise vs. Mercury: Pricing and Fees Overview

Here’s a summary of the pricing for Wise and Mercury in a table chart:

What to Consider When Choosing Between Wise and Mercury:

1. International vs Domestic Focus: Consider whether your business requires international money transfer capabilities (Wise) or focuses primarily on domestic banking services (Mercury).
2. Banking Needs: Evaluate your specific banking needs, such as FDIC insurance, virtual cards, and integration options, to determine which platform better suits your requirements.
3. Cost and Fees: Compare the fees associated with each platform, including transfer fees, exchange rates, and any additional charges for banking services.
4. User Experience: Assess the user interface, ease of use, and customer support provided by both Wise and Mercury to ensure a smooth banking experience for your business.
5. Scalability: Consider the scalability of each platform and whether it can accommodate the growth of your business in the long term.

FAQs

Here are answers to five common questions people ask about Wise and Mercury:

• Can I use Wise for business transactions? Yes, Wise offers business accounts with features tailored to the needs of businesses, including multi-currency support, integration options, and transparent pricing for international transfers.
• Is Mercury only for startups? While Mercury is popular among startups, it also caters to small businesses in various industries. Its suite of business banking services, including FDIC-insured accounts and virtual cards, makes it suitable for a wide range of businesses.
• Does Wise offer FDIC insurance? No, Wise does not offer FDIC insurance as it is not a bank. However, funds held in Wise accounts are safeguarded in segregated accounts, providing a level of security for users’ funds.
• Can I transfer money internationally with Mercury? No, Mercury does not offer international money transfer services. It focuses solely on domestic banking for US-based businesses, providing fast and free domestic wire transfers.
• What are the fees associated with using Wise and Mercury? Wise charges low fees for international transfers based on the amount being transferred and the currency exchange rate. Mercury, on the other hand, offers free domestic wire transfers but may have fees for certain services, such as expedited ACH transfers. Both platforms do not charge monthly fees for basic banking services.

Is Wise Better Than Mercury? Takeaway

Since the introduction of Wise and Mercury, the fintech industry has indeed improved, offering greater accessibility and efficiency in financial services.

Wise fills the loophole of affordable and transparent international money transfers, addressing the high fees and unfavorable exchange rates of traditional banks.

Mercury caters to startups and small businesses, filling the gap for comprehensive banking solutions tailored to their needs, which might not be adequately addressed by traditional banks.