Currencyfair is a peer to peer currency exchange service which matches customers looking to buy and sell foreign currencies. You can send money all over the world, using exchange rates set by other Currencyfair users. Before you decide if Currencyfair is the right service for you, you’ll want to know the rates and fees, including the upfront fees for sending money, and potential additional charges you might meet along the way.
This guide covers all you need to know, including how the marketplace system works, and how to estimate fees with Currencyfair. We also give a rundown of an alternative service for comparison - Wise. Check out the different services on offer to see which is cheaper, and better suited to your requirements.
Currencyfair is a peer to peer currency exchange service, which was launched over 9 years ago in Ireland. There are now currencyfair offices in Ireland, Australia and the UK, and the company has moved the equivalent of over 8 billion euros for their customers so far.
Currencyfair have services for individual and business customers, and allow payments to be sent to many different destination countries in a wide range of currencies.¹
To send money with Currencyfair you’ll need to first create an account. You can then decide how much to send and use the cost estimator to model the payment you want to make.
The Currencyfair system is based on a marketplace. This means the exchange rates offered are provided by other users. You can either choose an exchange rate which is immediately available, or set an alert to tell you when the rate you want is posted by another user. This allows you to pay in money, and leave it in your Currencyfair wallet until the exchange rate for your currency is at a level you’re happy with.
There are several costs involved in the process. There might be a fee to pay into Currencyfair, depending on how you fund the payment. There’s then a fixed fee from Currencyfair when you exchange your currency, and the exchange rate you choose will involve a markup on the mid-market rate, too. Finally, depending on the country and currency, there may be intermediary charges - more on those later. Here’s a summary of what to expect;²,³,⁴,⁵
|Currencyfair fee type||Cost|
|Paying money into Currencyfair||Bank transfer - no fee Express deposit fee - charge depends on the currency, from 0.25% of the transfer amount to 0.5% of the transfer amount|
|Exchange rates and costs||Currencyfair is a peer to peer marketplace, which means that the exchange rate is set by other users, and may be better or worse than the mid-market exchange rate. Currencyfair then take a fee in addition, which is called a currency exchange spread, usually around 0.15% of the transaction value. Typically the exchange costs will be between 0.1% and 0.6%, plus a fixed fee per transaction which is the currency equivalent of AUD4|
|Fees imposed by sending bank or intermediary||Depending on the currency and country you’re sending to, there may be additional fees. These charges are associated with the SWIFT network and can be around USD25 per transaction. More on this below.|
As well as understanding the possible pay in charge, the upfront fee, and exchange rate costs, you’ll also want to know about potential charges added as a result of the SWIFT network.
The SWIFT network is used by Currencyfair when sending money on some currency routes, and can result in additional charges in the region of USD25 per transfer. That’s because up to 3 banks - known as intermediaries or correspondent banks - can be involved in a SWIFT payment. They can all deduct their own charge from the amount being transferred as they handle it.
It’s worth checking if there are likely to be additional intermediary fees for the destination and currency you want to send. If there are, you might choose to find an alternative provider which can transfer the payment without the worry of extra costs.
Wise use a smart new approach which avoids the SWIFT network entirely for most transfers. And the Wise borderless account can make it easier than ever to send, spend and receive money in foreign currencies. There’s more about how the Wise service works, in the next section.
As we mentioned earlier, Currencyfair is a marketplace, which means that users can exchange currency at rates set by other customers. Currencyfair then deduct a fee, known as a currency spread, which is usually 0.15% of the transfer value.⁶
Let’s say I want to send dollars to my friend in France, and she needs to receive them in her bank account in euros. I look for another Currencyfair user who has euros they want to exchange, so I can pair up with them. I send my dollars to Currencyfair first, who hold the payment until the euros are also available. They’ll then release the euros into my friend’s account, at the agreed exchange rate which will include the currency spread set by Currencyfair.
If I don’t like the look of any of the exchange rates available I can set up a rate alert, so I am notified if the rate I want is posted by another user. I can then set up the transfer at a later date.
Exchange rates available on Currencyfair depend on both the rates which other users are willing to accept, and the fees which Currencyfair will deduct as a currency spread. So how do you know if you’re getting a good deal?
To make sure this marketplace works well for you, it’s crucial you know the mid-market exchange rate for the currency you want to buy. The mid-market rate is the best benchmark exchange rate because it’s the one banks use when trading currencies on the global markets. You can get it using a currency converter tool, or a simple google search. Compare this with the rate available on Currencyfair to see how much of a markup has been added.
It’s worth at this stage comparing the rates and charges available from Currencyfair with other providers, too. You can make international transfers using the mid-market rate with Wise, and even get yourself a Wise borderless account to hold money in multiple currencies, and send and receive currencies all over the world. Wise use the mid-market exchange rate for all transfers, and charge a low, upfront fee, which can work out cheaper - and be quicker and easier - than using other providers.
To see how much your transfer will cost with Currencyfair, you’ll need to register an account and check out the rates available for the currency and country you’re interested in. Don’t forget that a transfer will include the following fees:
- Possible exchange rate markup added by the paired Currencyfair user, plus a currency spread of 0.15% from Currencyfair
- Fixed Currencyfair fee of AUD4 for each transfer
- Possible intermediary costs, levied by correspondent banks or the recipient’s own bank
- Express deposit fee may apply if you choose to use this service
Selecting the right international transfer and currency exchange service for your needs can take a bit of research. Each bank and provider has a different fee structure, which can make it tricky to compare the options out there. Make sure you look at all the applicable fees before you decide, and look at a range of traditional banks and modern alternatives like Wise to see which might suit you. For many customers making frequent international payments, the Wise borderless account is a perfect match for convenient, cheap and quick currency exchange and transfers all over the world.
All sources accurate as of 22 April 2019
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