The last couple of years has seen a few new players launch into the world of international currency transfers. They all have a slightly different take on nudging out the big banks from what is traditionally a very lucrative business.
CurrencyFair steps up to the plate as a white knight, offering its customers an inexpensive way to send money overseas; for both individuals and businesses. There is nothing fancy about their methodology; they get their customers the best exchange rates possible. It’s as simple as that.
While I make it no secret that I’m a big fan of services like TransferWise, in this review I take CurrencyFair for a test drive to see what it’s all about.
CurrencyFair, an excellent TransferWise alternative
CurrencyFair has actually been around for quite a while now, established in 2009 by three entrepreneurial Australians living in Ireland; Brett Meyers, Sean Barrett and Jonathan Potter.
Since its modest beginning, CurrencyFair has grown from its headquarters in Dublin to now include offices in the United Kingdom and Australia; employing 75 people across all areas of the company’s operations.
Each of the founders has experience working in finance. And as expats have a first-hand account of how expensive transferring money overseas can be. Eventually, they sat down and decided they could do it better if they put their minds to it, and CurrencyFair was born.
Over the past five or so years, they’ve had a lot of success. CurrencyFair has raised over $15 million of venture capital and has won multiple awards including the Best of Show at the FinovateAsia conference in Singapore, as well as the award for Most Insightful and Intriguing Internet Innovation at the IIA Die IE Visionary Awards.
CurrencyFair has also received a lot of support from its home base in Ireland, with assistance provided early on by Enterprise Ireland. The service itself even received personal praise from the Prime Minster of Ireland, An Taoiseach Edna Kenny TD.
How does it work?
CurrencyFair works through the newest phenomenon in currency exchange services; peer-to-peer transfers. Peer-to-peer services allow people to trade currency directly with each other, instead of making these transfers through a bank.
What CurrencyFair provides is a match-making service, pairing people together who are moving currencies in opposite directions. Think of it like this. While someone is moving money from India to the UK, there is probably someone else someone moving money from the UK from India. CurrencyFair gets the two to fulfil each other’s needs.
CurrencyFair takes a bit more of a sophisticated approach than TransferWise. It offers its customers a real-time marketplace in which to place bids to buy and sell currencies at user-defined prices. This puts the ball in the customer’s court, allowing them to set the specific price that they are happy to proceed with a transaction.
Instead of these parties having to each individually exchange money with the bank, CurrencyFair pairs them together. Funnily enough, in this respect, CurrencyFair describe themselves as ‘an online dating bureau for people who want to swap money but avoid hefty fees’.
And you know what? It works! CurrencyFair has processed over €2.3 billion in foreign exchange transactions to date. Saving its customers something in the vicinity of €130 million, that would have otherwise been spent on bank fees.
How do they do this? By charging super low fees. Compared with the bank which charges approximately 5%, CurrencyFair only charges 0.45% of the amount transferred and 3 Euro fee for their QuickTrade service. If you’d like to enter their MarketPlace and wait for a suitable counter-party, this rate is lowered to 0.15%. Now that’s a bargain!
An exciting and productive service
CurrencyFair offers its customers a service which has many benefits, which is great news for people like myself sending money home from abroad. Here are a few things which I think CurrencyFair do well:
Safe and secure
CurrencyFair is highly regulated, and as a leader of the fintech space, they take online security very seriously. In addition to being regulated in both Ireland and Australia, CurrencyFair offers its customers the highest level of website security, with two-factor payment authentication and all information stored in a secure data centre, complete with biometric systems.
Great customer service
CurrencyFair operates a transparent customer service model. In fact, if you’re ever confused by the exchange process, they encourage you to pick up the phone and give them a call. Because they have offices in both the northern and southern hemispheres, you can get a hold of them practically any time of day, most days of the week, including Sundays
CurrencyFair offers its customers a slightly more complex method of obtaining their desired exchange rate than that offered by services like TransferWise. In addition to the standard QuickTrade service, which CurrencyFair performs on behalf its customers, a MarketPlace exists for people who want to get the very best rate available.
By using the CurrencyFair MarketPlace users can wait until another account holder provides them with a “better requested” rate, allowing them to take advantage of an exchange rate that this more competitive than is offered by the QuickTrade service. Some people have even reported that they were able to get a better rate than the LIBOR mid-market rate!
Fast and simple
The best thing about CurrencyFair is that it’s fast and simple. Once your funds have been sent directly to CurrencyFair, and your destination account has been specified, the complete process only takes a couple of days. If you wish to obtain the best possible rate by using the MarketPlace it might take slightly longer, but is still a very efficient process.
As with most things in life, you need to take the good with the bad. Here are a few things that you should know about TransferWise’s service before getting started:
Your money is held by CurrencyFair
Unlike services like TransferWise, who only hold your money for a short amount of time, CurrencyFair allocates its customers their own account of sorts. Your money must be transferred into your CurrencyFair account before it can be exchanged out into your currency of choice. Having money sitting in CurrencyFair’s system means that it’s not generating interest like it would in a traditional bank account.
No service for USA residents
Despite CurrencyFair permitting its customers to send money from over 30 countries, the United States, unfortunately, is not one of them. At this stage CurrencyFair does not have the licences required to receive money from people located in the U.S. While sending money to the USA is absolutely fine, You may like to read my TransferWise review.
No physical storefronts
For those new to online exchange services, you may be disappointed to hear there is no physical storefront like you’d find at your local bank branch or Western Union. Instead, all transactions are completed 100% online. This means that if you need help, you’re going to have to call them. Also, this means that you can’t actually exchange cash, you need to deposit funds into a foreign bank account, either owned by you or a third party.
Is CurrencyFair safe to use?
Is CurrencyFair safe? A very important question that you’d be silly not to ask. You’ll be happy to hear the answer is yes. CurrencyFair has been operating successfully since 2009 and has amassed a dynamic and growing customer base. As their customer base grows, CurrencyFair users have access to an increasing pot of users money, providing liquidity which ensures that currency exchange orders can be fulfilled.
Holding a lot of customer’s money means that it’s in CurrencyFair’s best interest to keep everyone’s money safe. Security is essential to their reputation and ongoing business success, so they certainly don’t to mess around. To ensure that they maintain a safe and efficient service, CurrencyFair maintains competency in a few key areas:
As CurrencyFair is predominantly based in Ireland, it is registered with the regulated as an Authorised Payment Institution by the Central Bank of Ireland, under the European Communities (Payment Services) Regulations 2009. Additionally, as CurrencyFair operates in Australia it is subject to Australia’s tight financial regulatory system enforced by the Australian Securities and Investments Commission (ASIC). CurrencyFair and their partner companies are also registered in each jurisdiction of their company’s operations.
Segregated customer accounts
To maintain financial integrity CurrencyFair keeps its customer’s money separate from their own operating accounts. Customer funds are held in trust by one of the world’s largest financial institutions, which itself has over 57 million customers worldwide and annual revenues of $90 billion. By doing this, the funds used to run their business are independent of monies received by customers for trading between currencies, which are kept in special trust accounts.
Because CurrencyFair is 100% internet based, website security is of utmost importance, especially when dealing with potentially large financial transactions. You don’t need to worry, as with CurrencyFair’s website, your personal information is protected with the highest level of security; 256-bit encryption via SSL from VeriSign!
The personal information of customers is stored within a secure facility that this safeguarded 24 hours a day. CurrencyFair services are protected with biometric security. Additionally, CurrencyFair uses a range of systematic procedure, checks, and maintains continuous auditing, logging, backups and safeguarding of data; including securing their software and systems from malicious attacks.
Does CurrencyFair offer good value for money? A comparison
To see how CurrencyFair stacks up against the competition, let’s compare it with exchanging money through the bank. Say I’d like to exchange 2,500 Euros (EUR) into Australian Dollars (AUD), and that the current market rate is 1.56. That means each one of my Euros is technically worth $1.56 Australian Dollars. In theory, all things being perfect (which of course they are not), my EUR 2,500 is worth approximately AUD 3,901.10.
The bank review
Because I live in Germany, I jump into the online system of my bank (Sparkasse) and set up a transfer request of EUR 2,500 into Australian Dollars. I place my Australian bank details into the required fields and hit enter. A few days later AUD 3,747.00 arrives into my Australian bank account, at an actual exchange rate of 1.5097. Upon review of the fees, it appears that I have been charged EUR – comprising of a transaction fee of EUR 15 and commission of EUR 139.10 (approximately 5.56% of the transfer value).
Now for today’s special guest, CurrencyFair. I deposit EUR 2,500 into my CurrencyFair account and go through the QuickTrade process. As soon as the trade is completed my Euros have now been exchanged to AUD 3,897.35 and sit on my account, waiting to be transferred to my Australian bank. Two days later my funds hit my home account, at an actual exchange rate of 1.5608. CurrencyFair advise me that they have changed a fee of AUD 4 and that’s it!
And the winner is…
CurrencyFair by a country mile! With their small fee and no additional deductions for commission/exchange rate spread, CurrencyFair put me ahead by an additional $150.35 (or 4.02%), compared to the service provided by the bank. After numerous trials, I’ve found that this trend also holds true for much smaller and larger amounts, as well as other popular currency combinations.
Sure, and other online exchanges?
So far I’ve demonstrated that CurrencyFair produces a far better result than using the bank. But how does it compare with other online currency services? Below I’ve listed today’s CurrencyFair QuickTrade exchange rate alongside some of the internet’s most popular alternatives. You be the judge.[easytable sort=”desc,asc”] Company,Exchange Rate, “EUR 2,500 = AUD ?”
Western Union, 1.5440,”3,860.05″
In my experience, CurrencyFair is the most competitive service for amounts over EUR 1,000. For values smaller than that, I suggest taking a look at TransferWise.
Ready to get started? A step-by-step guide
If you’re ready to send money abroad and you think that CurrencyFair is right for you, that’s great to hear, you won’t be disappointed! CurrencyFair has developed their service in a simple and easy manner, allowing just about anyone to use their interface. Below, I’ll show you how to get started in 4 simple steps:
1. Sign up
Go to currencyfair.com and sign up for an account. It only takes 5 minutes or so, and you can get started straight away. If you would like to send amounts greater than EUR 1,000 you may need to verify your identity with a driver’s licence or passport.
Login to your CurrencyFair account and add the bank account that you will be sending money from, and advise CurrencyFair of the amount. Then jump into your online banking and wire the promised funds to CurrencyFair.
Once your funds arrive into your CurrencyFair account, they will notify you by email that the funds have been received. Once this occurs everything is set for you to make an exchange into a different currency by using either the QuickTrade or MarketPlace service.
When you have exchanged your funds, you can add the bank details of the account you wish to send the money to. CurrencyFair will withdraw your funds from your account with them, and send the money to the specified recipient.
CurrencyFair on your mobile phone and tablet
CurrencyFair understands that not everyone has time to jump onto the computer every time they need to transfer money. As as result, they have developed a mobile friendly interface for mobile phones and tablets.
The mobile site is thoughtfully designed, with a simple and functional interface, making it perfect for payments on the run. It will work wherever you have access to the internet, either through Wifi or 3G. It supports payments by bank transfer and debit card, and displays every detail you need to keep track of its process. During any payment, you can also monitor its status and if needed, cancel it.
Within the CurrencyFair mobile site, you can still complete many of the tasks offered by its desktop counterpart, such as:
- Invite friends to CurrencyFair by SMS, email, Facebook & Twitter
- Send-in and verify identification documents
- Set up fixed target amount payments to your recipient
- Set up transfers with new and previously used recipients
Refer friends and EARN money!
If you’ve had a good experience with CurrencyFair, you can tell your friends about it and get paid in the process. CurrencyFair has joined the crowd in providing referral programs to its loyal customers, providing each person with their own unique affiliate link. For every friend you refer you’ll be paid EUR 15 – provided that they transfer over EUR 400 in any single transaction.
The best bit is that it’s not only you who will benefit. Any friend referred to CurrencyFair by you will get EUR 15 too, as well their first transfer free of charge. Everyone’s a winner!
I hope this review has provided you with an insight into the CurrencyFair operation and its many benefits. If you’d like more opinions on the quality of service, be sure to check out their 780+ positive reviews over at Trustpilot.co.uk, where it has an average score of 9.5 out of 10. That’s a lot of happy customers if you ask me!
As for me, I’ll continue to use TransferWise for my smaller transfers home. While CurrencyFair looks like a no-brainer for transactions over EUR 1,000. It certainly makes my life a lot easier knowing that I’m getting an honest and competitive deal.
Over to you
Have you used CurrencyFair? How was your experience compared to using other services? Let us know your thoughts in the comments below, we’d love to hear what you have to say.