RationalFX provides a broad selection of currencies, competitive rates, and helpful customer service, despite its online platform lacking advanced features.
|Transfer speed:||2–4 days|
|Trustpilot score:||4 stars|
|Our score:||3 stars|
What we like
- Simple user interface
- Rates are generally competitive
- Helpful customer service
What we don’t
- Online platform has basic features
- Only available for residents of the UK and greater EU
- Unexpected charges from the SWIFT network
RationalFX has a inspirational founding story; two young entrepreneurs in London looking for a way bring foreign exchange in the digital era. The best part of the story is that 15 years and 100,000 customers later, the company is going stronger than ever.
From humble beginnings, the company has since expanded into three divisions to cover the diverse requirements of its customers. From low-value everyday remittances to discreet large-value transfers, RationalFX is a truly boutique firm for international payments.
With a diverse selection of currencies and hundreds of payment destinations available, the company is well positioned for success in UK and European market. To learn more about their capability and to see if their service is right for you, read on for my in-depth review of RationalFX.
RationalFX was established in 2005 by two founders, Rjesh Agrawal and Paresh Davdra. They started out with just a laptop and few thousand pounds in an apartment just outside of London. Despite their modest position, they both saw an opportunity for providing an internet based foreign exchange service. They were aided by the fact that Paresh’s father had been involved in the industry for many years, and that Paresh had obtained initial experience as a dealer at his father’s firm.
Since the company’s initial founding, RationalFX has processed over £10 billion in payments on behalf of its customers. In 2014, RationalFX Premier was established to focus on providing a white-glove service for its high-net-worth private clients. Then in 2015, the company went the other way, founding Xendpay (review), an online platform specifically focused on low-value remittances. Xendpay’s point of difference was its low fee model, allowing its customers to “pay what you want” for using the service.
For many years RationalFX was led somewhat jointly by its founders, Rjesh and Paresh. It appears that they are both still involved with the company varying degrees; Rjesh in non-executive capacity as Chairman, and Paresh in a executive capacity. The responsibility for day to day operations has been handed to Chris Humphrey, who is CEO. Chris, who spent a decade with OFX (review), is supported by Renzo Giannini, who is Head of Compliance. The executive team is rounded out with Head of Operations, Simon Allen, and Head of Technology, Giuseppe Naccarato.
Rational Foreign Exchange Ltd
Level 42, One Canada Square
London E14 5AB
RationalFX supports the exchange of 48 currencies, leading to a total servicing of approximately 173 countries. For the most part, the company facilitates its transfers using the SWIFT banking network, which allows it to deliver funds to all corners of the globe. The downside to this network is that there may be charges incurred by the recipient, of which RationalFX has no control of.
The RationalFX online platform has no minimum or maximum transfer value. This is an exciting feature for high-net-worth and commercial customers, who may have run into the limitations of other online currency transfer services in the past.
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 RationalFX 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 RationalFX against traditional banks, the company fares pretty well. Banks typically charge a large transaction fee and a 5% margin on the total value of the transfer. RationalFX, on the other hand, charges a small flat fee of £4. The exchange rates are also much more competitive, averaging between 1.42% of the total amount transferred for small values (£1,000), and 1.03% for larger values (£100,000).
When comparing RationalFX to other specialised currency transfer services, it doesn’t fare too badly. While companies such as TransferWise (review) and CurrencyFair (review) don’t take a margin on the value of the transfer, and rather they provide their customers with the mid-market rate, they do charge a larger fee to compensate; amounting to approximately 0.50% of the transfer value. Although RationalFX could tighten up their rates a little, they remain in the ballpark of a competitive service.
As an example, let’s compare RationalFX against its competitors when exchanging British Pounds (GBP) into Australian Dollars (AUD):
|wdt_ID||Service||£ 1,000||£ 10,000||£ 100,000||Ave. cost||Review|
|1||Mid-market rate||1,787||17,872||178,727||0.00 %|
|2||Typical bank||1,452||14,748||147,709||5.52 %|
|3||RationalFX||1,761||17,684||176,902||1.16 %||Read review|
|4||TransferWise||1,777||17,795||177,963||0.47 %||Read review|
|5||CurrencyFair||1,779||17,790||177,900||0.46 %||Read review|
|6||WorldFirst||1,760||17,690||177,265||1.12 %||Read review|
As you can see, there are certainly many benefits to using RationalFX. With its ability to provide payments to hundreds of countries, it does provide good value but may not always be the cheapest option. In addition, it should be noted that any transfer conducted via SWIFT can possibly incur additional hidden charges by correspondent banks; the amount depending on the amount of the transfer and the recipient’s bank.
The transfer speed of an average transfer with RationalFX depends on a couple of things, including the currency you’re sending, the size of the transaction, and the banks involved. For the majority of currency pairings, you should allow between 2 – 4 days for the transferred funds to reach the recipient’s account.
What are the key features of RationalFX’s online platform? Let’s take a look at the various payment services offered by the company.
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 RationalFX website and with a couple of clicks a transfer can be arranged.
If you need to transfer funds on a regular basis, a single payment can be scheduled as a recurring payment. This allows any future payments to be direct debited automatically, providing a convenient solution to make better use of your time.
If you would like to lock in an exchange rate but aren’t quite ready to transfer, you can use a currency forward contract. This allows you to confirm a specific rate for up to 12 months in the future, protecting you from unfavourable rate movements.
A market order allows 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, RationalFX will notify you via email so you can initiate a transfer at your convenience.
In addition to the RationalFX headquarters in the United Kingdom, the company also has regional offices in France and Spain. Their customer service team can be contacted by phone or email.
+44 20 7220 8181 (UK)
In my experience, I found the RationalFX 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 RationalFX safe? Let’s take a look at the various initiatives adopted by the company to ensure the security of its customers.
As RationalFX is headquartered in the United Kingdom, the company is regulated by the Financial Conduct Authority (FCA) and is licensed as an Electronic Money Institution under reference 507958.
Customer funds held on trust
In accordance with the standards imposed by government regulators, the funds of RationalFX’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 RationalFX encounter financial difficulties.
The RationalFX 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.
Can you trust RationalFX? Let’s take a look at look at some of the key factors which affect the company’s reputation.
As of publication, RationalFX has received 610 reviews on Trustpilot with an average rating of 4 out of 5 stars; representing a positive experience in 85 percent of interactions with its customers.
Here are some of my observations on the feedback posted:
- Website is quick and easy to use
- Competitive rates
- Many happy long-term customers
- Staff do not have the knowledge required to assist in all situations
- Funds received later than expected
- Unexpected SWIFT fees incurred
Upon viewing the Facebook and Twitter feeds of RationalFX, we do not see many interactions between the company and its customers. It’s hard to tell why exactly this is the case, however, I would suggest that customers may prefer to deal directly with RationalFX’s customer support representatives. Aside from that, the company’s social media accounts provide a regular selection of general interest news and foreign exchange related content.
As for the mainstream media, there is not too much coverage on RationalFX other than the occasional vanity piece on the success story of company’s two founders.
Business Leader Interview: Paresh Davdra CEO, RationalFX.Enterprise Times
How a laptop and a phone changed the world: RationalFX.growthbusiness.co.uk
The RationalFX website has been designed thoughtfully, with special attention being paid to user experience and simplicity. It is available in 5 languages; English, French, German, Polish, and Spanish.
The sign-up process is relatively straight-forward. You begin by entering your email, a password and electing the type of account that you would like, before providing essential contact information such as name, address and phone number. The entire process takes around 10 minutes.
Before you are able to commence transferring funds, you first need to provide proof of identification so RationalFX can verify your account. Two documents are required; one proving your identity, such as a passport or drivers licence, and one proving your address, such as a bank or utility statement.
How does RationalFX work?
To familiarise you with the RationalFX service, I’ll take you through a transaction I completed with them recently. If you need some guidance in navigating your own account, you can follow along below.
Visit rationalfx.com and log in. Once you have entered the RationalFX website, you are greeted with a basic dashboard. To begin a transaction, click Send Money.
Select the originating and destination countries, as well as the amount that you wish to send. You can elect this amount in either currency denomination. The transfer fee will be added on top of your designated amount.
Add the information of your intended recipient, including their bank details.
An additional menu is squeezed into the process, asking for the purpose of your payment and the source of your funds.
Now is the time to elect your method of payment. If you wish to pay by debit or credit card, this is the fastest way of transferring funds to RationalFX. I chose to proceed with bank transfer. A summary of the quoted transaction is provided for your review. Once you are sure you want to confirm and proceed with the transaction, click Finalise Transaction.
Once your transaction is confirmed, you are provided with instructions to proceed with your part of the payment. Before RationalFX can complete the transfer, you will first need to send your funds to their local account from your country of origin.
Once your funds have been received by RationalFX, they will finalise the transfer to your recipient. You can track your transfer online and you will be provided with email updates as the payment moves through the system.
Finally, once the transfer has been completed, its status will be updated accordingly and the payment will be reflected in your recipient’s account shortly.
In my experience, the RationalFX online platform was simple to use and I was satisfied with the updates provided to me along the way. The entire process took 3 business days, and the funds arrived into my recipient’s account as requested.
RationalFX provides a professional and effective currency exchange service. Their online platform is easy to use and suitable for completing single transfers of almost any amount. While the company does offer advanced services such as regular payments and forward contracts, you will need to arrange these capabilities over the phone. If you’d prefer to manage these online, you might need to look at alternatives such as HiFX (review) and WorldFirst (review).
Despite claiming to be a technology-first operation, RationalFX still relies on delivery funds via the SWIFT network. While their exchange rates are generally competitive, they are still are not quite in the same league as market leaders, TransferWise and CurrencyFair. That being said, RationalFX provides a valuable service overall. And despite the limitations of its online platform, it is a solid performer for both personal and commercial transfers.
If you have any questions or feedback, let me know in the comments below.