There is no shortage of options when it comes to international currency transfer platforms. For one, new players keep joining the field. Besides, existing players keep extending their services throughout different regions.
What sets apart these different platforms is the way they operate. Here comes CurrencyFair, which specialises in international fund transactions by offering the best rates. Although there is nothing unique in the way CurrencyFair works, it still has a lot to offer. Read on.
What’s CurrencyFair?
Currency Fair is an online peer-to-peer platform that specializes in currency exchange services. It has its main headquarters in Ireland and offices in Australia, the UK, Singapore, New South Wales, and Hong Kong.
The company allows international transfers in 20 global currency options. Since the company relies on a peer-to-peer approach, money never really crosses borders. This approach eliminates bank conversion fees, which is perhaps CurrencyFair’s biggest foredeal.
You are probably asking how then the transfer happens. Well, we shall get to that in a minute.
Started in April 2009 by a group of financial experts, Brett Meyers, Jonathan Potter, Sean Barrett, and David Christian, the company became first to come up with a peer to peer marketplace.
Five years later, the company became the first platform to break the $1 billion barrier in the money-matching transfer sphere. A mobile app was developed and made official in September 2015. In 2017, CurrencyFair enabled SMEs to use its service. As of the end of 2017, CurrencyFair had traded over €5 billion. This figure increased up to €7 billion in July 2018.
CurrencyFair has won several awards over the years. It has also been listed in several top rankings in the fintech arena. The company claims its customers have saved a sum of €230 million over the 9 years it has been in operation.
As mentioned before, its leading service is fast and secure transactions at better exchange rates compared to bank fees.
Offerings
CurrencyFair takes a different and complex approach compared to standard currency exchange platforms such as TransferWise. It offers QuickTrade services as well as a marketplace for people looking to get the best rates.
Marketplace
By capitalizing on the marketplace, users that need to exchange their currency hold onto their funds until a user with the best rate is available. Some users have revealed that through CurrencyFair, they got better exchange rates than the standard market rates.
The best part about CurrencyFair is that it is swift and easy to use. The exchange process only takes a few days. However, if you want the best rate through the marketplace, it may take a little while longer, but it’ll be worth it.
How CurrencyFair work?
CurrencyFair works by eliminating the need to use banks to make transfers. This means that users avoid bank transfer charges as well. Commonly known as P2P, CurrencyFair sets users to trade with each other directly.
Think of it as a match-making service in that users who need a particular currency are paired with other users who not only have the currency the first user needs but also need the currency that the user is offering. In simpler terms, users moving currencies in opposite directions are matched.
For instance, CurrencyFair will match a user moving money from Australia to the UK with another user moving money in the opposite direction, i.e., the UK to Australia.
CurrencyFair provides its customers with a real-time marketplace to trade currencies at user-specified rates. This way, the rates are agreed upon by the customers. If satisfied with the rate, the users can then proceed with the transaction.
It does create some parallelism to online dating platforms, right? From this perspective, CurrencyFair defines its services as ‘an online dating bureau for people who want to swap money but avoid hefty fees. ’ In line with that, CurrencyFair charges a very low fee for its services.
How to use CurrencyFair
Just like any other platform, you need to register first before using CurrencyFair’s services. The sign-up process is simple and takes only a few minutes.
CurrencyFair has integrated electronic verification on its platform. If you fail the verification, you will be asked to provide additional documentation. Generally, it takes about 1-2 days, and you will be set.
The transfer time is dependent on the recipient of the funds but typically takes a day or two. Morning hours (before the bank’s cut-off times in the afternoon) are the best hours to transfer money
How much its cost
CurrencyFair charges only two fees- a standard transfer fee and an exchange rate margin.
Transfer Fee
In Australia, a $4.00 transfer fee is charged on transactions. Compared to many other options, this fee is exceptionally competitive.
Exchange Rate
You can either choose the marketplace or go with the straightaway exchange option. About 40% of CurrencyFair customers prefer the former. With the peer-to-peer marketplace option, you set an order to trade currency at your rate.
CurrencyFair’s marketplace will match your set price at a specific margin to interbank with a peer moving currency in the opposite direction at 0.15%. If no peer matches your order, CurrencyFair will step in and match your order at a wider spread of 0.35%. Note that these rates are applied where possible.
CurrencyFair gives you an option to call off your marketplace order and instead exchange at the market price. However, the market price might be lower at a spread of 0.5%. Even so, this is still cheap compared to bank transfers.
The platform allows major currencies using EFT and BPAY to transfer money to CurrencyFair. EURO deposits from debit cards are also allowed. On the downside, credit cards, cheques, and bank drafts are not accepted.
The currency options allowed include Euro, UAE Dirham, Australian Dollar, Canadian Dollar, Swiss Franc, Czech Koruna, Danish Krone, Pound Sterling, Hungarian Forint, Norwegian Krone, New Zealand Dollar, Polish Zloty, Swedish Krona, US Dollar and the South African Rand.
Pros & Cons
| PROS | CONS |
| For a small sum of money, CurrencyFair is ideal | Your funds have to be transferred to your account before making an exchange. If it takes a while before you get a match, your money won’t earn any interest as it would in a bank |
| Has regulatory oversight by the relevant bodies, so your funds are safe | |
| Charges very low transfer fees | Credit cards, cheques, and cash forms are not accepted |
| The exchange rates when using peer-to-peer are low (0.15%) | There is no guarantee of getting a match in the marketplace |
| Saves you the trouble and additional expenses involved when using traditional bank services | Lacks a physical storefront
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Is CurrencyFair safe?
In Australia, CurrencyFair holds regulatory approvals from the Australian Securities and Investment Commission. As such, it is subject to Australia’s tight financial regulatory system. It is licensed by the Australian Financial Service- license number 402709.
Transactions made by CurrencyFair customers are fulfilled through a client trust account that offers the vantage of being cheap compared to using the SWIFT network.
Besides, customer’s funds are stored in separate accounts from CurrencyFair’s own operating accounts. This way, the company guarantees financial integrity. On TrustPilot has an excellent rating (4.8 out of 5 by over 3000 customers)
Since the platform is entirely internet-based, website security is prioritized. The customer’s personal information is safeguarded using 256-bit encryption via SSL from VeriSign.
Customer support
CurrencyFair has a great customer support team that offers excellent customer services. Should you have any inquiries, CurrencyFair encourages that you get in touch to sort out the issue.
Verdict – Worth it?
CurrencyFair is an ideal choice if you want to enjoy low transfer rates and avoid the whole inconvenience by bank transfers.
Exchanging funds via the CurrencyFair gives you good value for your money. However, the limited money transfer options can be an impediment to many.