While not always the cheapest option for low-value transfers, OFX provides competitive rates, a broad selection of currencies, and an excellent service overall.
- Simple user interface
- Competitive exchange rates
- No maximum transfer value
- Friendly customer service staff
- Rates not as competitive for smaller values
OFX is one of the most influential players on the currency transfer market. It has certainly come a long way from its humble start-up beginnings; having listed on the Australian Stock Exchange and completed over $100 billion in transactions to date.
The company sees itself as something closer to a full-service broker than a simple retail dealer and has more than a million individual and corporate clients to back up that claim. In fact, servicing the needs of small and medium business has become so important for OFX, that commercial transactions now make up over 45% of the company’s turnover.
With that in mind, it is hard to not to be impressed with OFX’s banking network, spanning 55 currencies and over 190 countries. To learn more about their capability, and to see if their service is right for you, read on for my in-depth review of OFX.
Company history and founding story
OFX was established in 1998 by Matt Gilmore and Gary Lord, two foreign exchange professionals from Sydney, Australia. Matt is credited with developing the first version of the website from his apartment in the early days of the internet boom, while Gary came on as joint managing director in 2005. As far as I am aware, both remain as minority shareholders of the company today.
OFX operated for many years under the trading name OzForex and eventually expanded into markets outside Australia; including New Zealand in 2001, the United Kingdom in 2005, Canada in 2007, Hong Kong in 2011, and eventually the United States in 2012. In 2013, the company took on the additional responsibility of listing as a publicly-traded company on the Australian Stock Exchange (ASX), and in 2015 the company consolidated its various trading entities under the single OFX brand.
Since February 2017, the company has been overseen by Skander Malcolm as CEO, Selena Verth as Chief Financial Officer, and Adam Smith as Chief Operating Officer. Each of these senior executives has extensive experience in banking and financial services from firms such as ANZ, Deutsche Bank, and General Electric. They are complemented by the impressive credentials of Wendy Glasgow, serving as Chief Technology Officer.
OFX supports the transfer of funds to over 200 countries across the world. To support this extensive reach, the company has established a network of over 150 bank accounts worldwide, using a combination of international banking partners, as well as its own locally based subsidiaries. This allows OFX to facilitate trades in both directions of many currency pairings.
OFX has a minimum transfer value of £100 in the United Kingdom, or as specified by your local OFX subsidiary. As for maximum transfer values, there aren’t any. The OFX platform has been developed to handle large payments of almost any amount, or as their website states: “from $2,000 to $2 billion”. This is an exciting feature for commercial and high-net-worth customers, who may have previously run into limitations imposed by other online currency transfer services.
Exchange rates and fees
Before committing to using a currency transfer service, it’s important to understand its business model. Put simply, a company like OFX typically generates revenue in two ways. Firstly, it may charge a transaction fee for executing each transfer. Secondly, it may also take a margin on the exchange rate provided to its customers, also known as the “spread”; which is the difference between the exchange rate of the wholesale market (i.e. the interbank rate), and the exchange rate offered to the customer.
When comparing the pricing of OFX against traditional banks, the company fares extremely well. Banks typically charge a large transaction fee and a 5% margin on the total value of the transfer. OFX, on the other hand, may charge a flat fee of up to $15 for transfers up to $10,000 in Australia and Canada. Transfers from the United Kingdom and the United States do not incur a fee. The exchange rates provided by OFX are much more competitive than traditional banks, averaging between 1.72% of the total amount transferred for small values ($1,000), and 0.70% for larger values ($100,000).
When comparing OFX to other specialised currency transfer services, it also holds up very well, particularly for larger amounts. While currency services such as TransferWise and CurrencyFair don’t take a margin on the value of the transfer, and rather they provide their customers with the “mid-market” exchange rate, they do charge a larger fee to compensate; amounting to approximately 0.65% of the transfer value. What OFX does have going for it, is its large selection of currencies and its ability to facilitate higher transfer values than more consumer-focused services.
Here is how OFX compares against its competitors when transferring Euro (EUR) into Australian Dollars (AUD):
|wdt_ID||Service||€ 1,000||€ 10,000||€ 100,000||Ave. cost||Review|
|1||Mid-market rate||1,590||15,900||159,000||0.00 %|
|2||Typical bank||1,485||15,080||151,025||5.02 %|
|4||TransferWise||1,576||15,777||157,950||0.76 %||Read review|
|5||CurrencyFair||1,577||15,813||158,166||0.62 %||Read review|
When using OFX, the time required to complete an average transfer is between 3–5 days, from start to finish. This timeframe allows 1–2 days for you to transfer funds into the accounts of OFX. Once received by OFX, payment is typically processed within 1–2 days, leaving an additional 1–2 days for the deposit to be delivered to your recipient’s account.
Transfers involving more heavily transacted currency pairing may be completed even quicker. For example, GBP/EUR payments are completed by the next working day, and AUD/USD are paid on the same day.
What are the key features of OFX’s online platform? Let’s take a look at the various payment services offered by the company.
Spot contract. A spot contract consists of a single payment from one currency to another at the currently available exchange rate. If you need to send money right away, simply login to the OFX website or app, and with a couple of clicks, a transfer can be arranged.
Recurring payment. By speaking with OFX’s customer service, a single payment can be scheduled as a regular recurring transaction. This allows any future payments to be automated, providing a convenient solution to make better use of your time.
Currency forward contract. If you would like to lock in an exchange rate but aren’t quite ready to transfer, you can use a forward exchange contract. This allows you to confirm a specific rate for up to 12 months in the future, protecting you from unfavourable rate movements. The minimum transfer amount for this service is £20,000.
Foreign currency options. For customers located in Australia, foreign exchange options are also available. An option gives you the right, not the obligation, to make a money transfer at a specific exchange rate and time, for payment of an up-front premium. The minimum transfer amount for these services is $50,000.
Market order. Limit orders allow you to set a target exchange rate that you would like to transact at in the near future. If and when your target rate is reached, OFX will contact you to finalise your transfer. The minimum transfer amount for this service is £20,000, and the order is valid for up to 6 months.
In addition to the OFX’s Australian headquarters, the company also has regional offices in Canada, Hong Kong, New Zealand, the United Kingdom, and the United States. This global footprint allows OFX to provide customer service 24 hours a day, 7 days a week. The company can be contacted by phone, email, or through the use of a form on their website.
In my experience, I found the OFX customer service staff to be friendly and helpful. I did not have to wait too long to speak with someone on the phone, and my queries by email have been answered in a prompt and professional manner.
Security and regulation
Is OFX safe? Let’s take a look at the various initiatives adopted by the company to ensure the security of its customers.
Government regulation. As OFX is headquartered in Australia, the company is regulated by ASIC under Australian Financial Services Licence number 226 484. OFX’s subsidiaries are also regulated by the relevant authorities in the jurisdiction of their operations, such as FCA in the United Kingdom and FinCEN in the United States. Furthermore, as a publicly listed company in Australia, OFX is required to adhere to additional corporate reporting standards.
Customer funds held on trust. In accordance with the standards imposed by government regulators, the funds of OFX’s customers are held in segregated accounts and are therefore kept completely separate from the company’s own operating accounts. This ensures the security of customer funds, should OFX encounter financial difficulties.
Website security. The OFX website is protected with TLS encryption, which prevents sensitive data from being intercepted during your visit. You can confirm that this is in place by recognising a green padlock next to the website’s URL on your browser. Additionally, OFX has implemented a range of security features such as secret questions and automatic time-outs.
Can you trust OFX? Let’s take a look at look at the company’s reputation.
Trustpilot. As of publication, OFX has received 3,062 reviews on Trustpilot with an average rating of 4 out of 5 stars; representing a positive experience in 91 percent of interactions with its customers. Here are my observations of the feedback posted:
- Helpful phone support
- Longtime customers continue to use the service
- Excellent exchange rates
- Occasional delays in transfer times
- Maintaining account compliance can be tedious
- Recent reports have noted varying levels of customer service
Social media. Upon viewing the Twitter and Facebook feed of OFX, we can see that its customer service staff reply quickly to any query raised on these platforms. There are not many complaints, rather most interactions involve clarifying the company’s services and capabilities. Due to the size of the OFX, the social media team is quite active in publishing news and market updates, which could be very useful for those making regular payments.
Mainstream media. As for the mainstream media, OFX does not have too much vanity coverage, as they are already a well-established company. Much of the reporting completed by large media outlets relate to its status as a publicly listed company.
An Australian startup company to watch. The Next Web
Showing businesses the forex light. pymnts.com
OFX has been around for 17 years and has processed £50 billion worth of transactions since inception. Business Insider Australia
Design. The OFX website has been designed thoughtfully, with special attention being paid to user experience and functionality. As far as I am aware, the website is only available in English. In addition to its online platform, OFX has also developed mobile apps for both Apple and Android devices.
Registration process. The registration process is relatively straightforward, taking only a couple of minutes longer than a typical consumer-grade service. You begin by entering your location and your email, before providing essential contact information such as name, address and phone number. The entire process takes around 10 minutes.
Identification. Before you are able to commence transferring funds, you first need to provide proof of identification so OFX can verify your account. Two documents are required; one proving your identities, such as a passport or drivers licence, and one proving your address, such as a bank or utility statement.
How does OFX work?
To familiarise you with the OFX service, I’ll take you through a transaction I completed recently. If you need some guidance in navigating your own account, you can follow along.
Step 1. Visit ofx.com and log in. Once you have entered the OFX online platform, you are greeted with a relatively minimalistic interface. The dashboard provides a summary of current transactions in process, and a range of menu items to select from. To begin a transfer, click New Quote. Alternatively, you can enter some basic information into the quick quote widget and click Go.
Step 2. To formalise the exchange rate for your quote, select the currencies involved, the amount, and click Get Quote. The rate offered will vary depending on the size of your transfer. Larger transfers will generally be offered better rates. Once you are happy with the quote presented click Continue.
Step 3. The specific terms of your quote are clearly outlined, including the exchange rate and fees applicable. Select your intended recipient(s) – the details of which are entered in a separate menu – and provide the reasons for your transfer. Once you are sure you want to confirm and proceed, click Finalise Transfer.
Step 4. Once your transaction is confirmed, you are provided with instructions to proceed with your part of the payment. Before OFX can complete the transfer, you will first need to send your funds to OFX’s local account. At this stage, the company can accept electronic funds transfer, direct debit, or BPAY in Australia.
Step 5. Once your funds have been received by OFX in their local account, they will finalise the transfer to your recipient. You can track your transfer online or with their mobile app. Additionally, throughout the process, you will be provided with email updates as the payment moves within the system.
All done! Finally, once the transfer has been completed, you will receive an email confirming that payment will soon be reflected in your recipient’s account. In my experience, the OFX online platform was simple to use and I was satisfied with the instructions provided to me along the way. The email updates were informative, and I even received additional updates via text message. The entire process took 2 working days, and the funds arrived into my recipient account as requested.
Conclusion and final thoughts
OFX has built an effective online platform and partner banking network over the past 20 years. Now that their various corporate entities have been united under one brand, OFX is providing a consistent experience to their users, combining competitive exchange rates and friendly customer support. While not really optimised for smaller transactions, which are probably better suited to more consumer-orientated services such as TransferWise or CurrencyFair, OFX is an excellent consideration for individuals and businesses moving larger values in multiple currency denominations.
If you have any questions, queries or feedback, let me know in the comments below.