Ben Todd | Jun 3, 2017 | 2
CurrencyFair Review: The Cheapest Way To Transfer Money Abroad
CurrencyFair was established in 2010. They offer a money transfer and conversion methods that you may do face-to-face, online or over the telephone. They have offices in Australia, the UK and Ireland, and despite the fact that they transfer money all over the world, they only accept customers from EEA countries or Australia.
This may kill the service for you if you are outside of these areas, which frankly, most of the world is. If this is the case, you are best of looking at Transferwise, which can be used in North America and other countries besides the EU and Australia.
Their fees include a flat rate of three Euros, followed by whatever further transaction fees apply. The fees and their special P2P marketplace are explained later, suffice it to say that getting a clear view of how much you will receive back is tricky.
Overall, CurrencyFair is an interesting and arguably, revolutionary money transfer / currency exchange platform.
But it’s not perfect.
Only a Few Countries Can Use CurrencyFair
The main issue I have with CurrencyFair is that’s it’s still a small player and not yet the global force that it should be
That is not to say that the company is poorly established, it is just that it has undertaken very conservative growth strategies that has left it behind other transfer and conversion companies. However, in defense of CurrencyFair, they have fewer complaints online than most other transfer companies do, so perhaps they are only expanding at a rate that allows them to safeguard their reputation.
CurrencyFair is not a global company, and it only deals with a small number of countries when compared with its competitors (some of which are younger) with the main being Transferwise (see our Transferwise Review). CurrencyFair only accepts clients in Europe, in the UK and in Australia. CurrencyFair also handles fewer currency pairs than all of its main (larger) competitors.
There are no dedicated dealers, which mean that people who are looking to make money are left to their own devices. On the plus side, CurrencyFair has the best online reputation of all its competitors if you consider its compliment to complaint ratio online. CurrencyFair still have their share of complainers, but there are far fewer per positive review than any of its competitors.
The app is rather good. It is overly complex, especially for people that do not want to spend time learning how to use its every function. Nevertheless, it allows users to log into their accounts, perform most of the actions they can perform online, which includes being able to exchange and transfer money. The platform is not intuitive, but it is secure as far as modern standards go.
Longer Transfer Times
Most of the major complaints, i.e. the ones where people are really steamed, are where they have transferred a large sum of money, it has been delayed, and then the customer service department hasn’t answered their questions. Make it easy on yourself by conducting your transfers as soon as possible, especially if you are planning to use the money for something important because there may be delays with your transaction.
In addition, expect the worst from the customer service department. They are not terrible, but they are very slow and almost non-committal. Lower your expectations and ask any questions well in advance of you trying something you are not sure about.
They are wise to all the scams, which makes life difficult for fraudsters and honest citizens alike. For example, using an address such as a dorm in a university will not suffice. Ideally, you need to be able to prove your addresses for the last three to seven years. If you have not lived at your current address for the last three years, then CurrencyFair will rightfully treat you with skepticism. Overcoming the first set of security hurdles is frustrating, but it has to be done if you want to use the service.
Confusing Fee Structure (when you really look into it)
One of my biggest complaints is that there is no clear fee breakdown on the website. The transaction fee information you have seen on this website is as close to an explanation as you are going to get, but when you dig a bit deeper, things are more complex.
If you factor in their exchange marketplace and their variable fee rate, you are going to have a hard time figuring out how much you are going to get. Your best bet is to assume the worst and hope for the best. There are times when you will get a world beating return, and there are other times where you may wish you had used Transferwise.
CurrencyFair can be excessively complex
It is not that CurrencyFair is excessively confusing or complex; it is that the system could be streamlined in a massive way to make it easier and more intuitive. The Internet has forums full of people that point out areas where CurrencyFair could have improved their process.
For example, you need three account references for deposits, and the CurrencyFair customer reference number could easily replace the CurrencyFair account number.
Due to the complex nature of the CurrencyFair system, it may be better if you only conduct personal transactions and/or moneymaking transactions with CurrencyFair, and maybe conduct your third-party transactions with another moneychanger.
CurrencyFair Pricing List As Of 2016
The company is very proud of their exchange rates, which is why you will find an exchange price calculator on the main homepage. It shows you how much you may send, how much you would get if you did it with your bank’s exchange rate, and how much you would get if you used CurrencyFair.
The cost is a flat rate, which is advertised as three Euros. There is then a transaction fee of 0.35%, which is taken out of your transfer amount. This may sound very transparent and clear, but it is not because their fee examples often show skewered prices that are lower than what you may pay. Therefore, you simply need to remember there is a flat rate fee of three Euros, along with a 0.35% fee on the amount you send.
Here Is Where The Prices Get Complicated
When you use CurrencyFair, you will always have to pay the three Euros flat fee, which is fairly easy to understand. However, there are times when you will pay a 0.15% fee on your money, and other times when you will pay a 0.5% fee.
Why does the percentage rate vary?
CurrencyFair goes by the current activity in the marketplace and the way you are exchanging. It is possible, albeit unlikely, that you will pay 0% on your transfer if you happen to be transferring a certain currency at a certain time.
Here Is Where It Gets Even Trickier
On the CurrencyFair website, you will see sections where it says things such as, “You may pay less than nothing,” and you may see reviews of their service where people say the same. Here is an example that highlights what they mean and why.
Let’s say you wish to convert 100 USD to GBP. Let’s assume the following exchange rate:
- The bank rate is 0.77 GBP for every 1 USD. So, 100 x 0.77 = £77
- The CurrencyFair rate is 0.83 GPB for every 1 USD. So, 100 x 0.83 = £83
Now, for the sake of argument, let’s assume that the bank’s fees are exactly the same as CurrencyFair. Let’s also say that three Euros is £2.50 (GBP), and let’s take CurrencyFair’s average percentage rate, which is 0.35%.
- The Bank Fee = £2.50 flat rate + ((0.35% of 100) x 0.77) = £2.77
- CurrencyFair Fee = £2.50 flat rate + ((0.35% of 100) x 0.83) = £2.79
As you can see, your CurrencyFair fee is higher, but now let’s total up the end results after taking out the fees.
Bank Transfer = £77 – £2.77 fee = £74.23
CurrencyFair Transfer = £83 – £2.79 fee = £80.21
As you can see, you get more money back using CurrencyFair because you get a better exchange rate than you do with a bank and/or one of their competitors. Given the above calculation, you save nearly £6 per every 100 USD transferred over to GBP. If you transfer 1000 USD, that’s £60 more in your pocket vs using the bank!
That is why you will see sections on their website saying, “You may pay less than nothing.” It is because even though you have paid a fee, you are still getting more back than you would with a bank and/or one of their competitors.
A Deeper Look into CurrencyFair
There’s a lot to CurrencyFair when you start digging into the service. Here are a few things I’ve found when looking deeper.
How Do They Provide Better Rates Than Banks?
They have set up a P2P marketplace where they are able to offer a lower rate and still make a profit themselves. Plus, the more people that use CurrencyFair, then the lower your transaction fee is and the bigger the chances are that you will find a good exchange rate. In essence, CurrencyFair brings buyers and sellers together in a way that allows CurrencyFair to control the sale/purchase and the rates that apply (to a certain degree).
CurrencyFair holds the funds for you, so they are not floating around in cyberspace. You make your exchange and get a great rate if many others are trying to buy the currency you are selling. You can choose to make a quick trade and get the best rate that is available at that moment, or you can post your funds on their marketplace and set your required rate to see if you can get a better rate from another person. If you are still not sure how it works, watch their CurrencyFair Market Video.
The Trend Tool Is Pretty Good
It can be tough getting a clear view of the current currency trends without paying. The CurrencyFair website offers a currency trend tool that you can use for free without having to sign up. With their historic currency trend tool, you are able to see how currencies have moved in the last thirty days. If you are a trader and you feel that change is afoot, then this handy little chart may be helpful.
How Long Do Transfers Take?
It takes one to two days so long as the money reaches CurrencyFair okay. If you use the Auto-transaction function, then your exchange will happen more quickly, and you will receive the best rate they have available at the time. If you put your money on the market and specify a rate, your transfer will take longer, but you may get a lower rate.
You Can Affect the Outcome of the Transfer Amount
The P2P marketplace means you may exert an influence on how much money you get back from your transfer. If you are trading/changing money in order to accumulate wealth, then CurrencyFair is a good place to try buying and selling currency.
The fact you have an impact on what you get back is rather appealing. If you are in no rush to change your money, you may get a better rate, and that is something that few (if any) other moneychangers offer. The fees are okay, but the P2P marketplace is revolutionary.
If you are sending more exotic currencies, then you may suffer a little. If you are sending smaller amounts fewer than twenty thousand, and you are converting with popular currencies, then you will do well. You will probably get better rates and have a better all-round experience. If you are transferring to other people and you are transferring larger amounts, you may not have as much fun. However, with that said, a great many people use the service without bother or hindrance, so it is not a bad choice if you have money you want to send/convert.
CurrencyFair vs Transferwise
This is a question that often comes up. The truth is that neither is better and both companies offer a sufficient set of differences that there is room for both.
Transferwise Currency Conversion – View How Much You Get
In fact, CurrencyFair is not a global company and only offers service for the EU, the UK, and Australia. Transferwise offers service to these countries, North America, and many other countries. So CurrencyFair is only directly competing with Transferwise in Europe and the UK.
- For larger sums of money and if you don’t mind waiting longer for transfers, CurrencyFair is a better choice. You can get more money because you can get a potentially better rate than the .05% transferwise offers.
- For quicker transfers, smaller amounts, and am ore streamlined process, Transferwise is a better choice.
Pros And Cons
Most of the positive points people make about CurrencyFair revolve around their transfer times and exchange rates, both of which beat much of their competition. The most commonly criticized elements revolve around user experience, where people find the CurrencyFair website and app unintuitive to the point of being overly complicated.
[+] Offers the best currency conversion rates in the world with the cheapest fees
[+] The online platform is very secure
[+] They have some of the best exchange rates in the world
[+] The support staff members are courteous
[+] Their exchange rates often beat the market average
[+] All the fees are listed online
[+] The app makes use a little easier
[+] Faster service than many of its competitors
[+] Cheaper than commonwealth bank’s travel money services
[+] Suits people that wish to convert/transfer larger sums of money
[+] A secure method of sending and converting money
[-] No service for North Americans
[-] Not the cheapest if you only transfer smaller amounts
[-] Slow customer service
[-] The user interfaces tend to be overly complicated
[-] Getting answers from the customer service department is difficult
[-] The platform is cumbersome and unintuitive
[-] Fees are not transparently laid out beforehand
[-] Service from some countries is more expensive than others
The Final Word
CurrencyFair is an interesting company and they offer a far superior currency exchange over that of using your bank to wire money abroad. It’s also better than using a local currency exchange service — quite a bit in fact.
The problem is that if you are in North America or countries outside of Australia and Europe, you can’t use CurrencyFair. And, there is a wire transfer fee you may incur to transfer the money from your bank to the CurrencyFair bank account, depending in what country you live. This means you will pay $25-$35 before you EVEN begin the transfer process just to get the money to CurrencyFair to begin the transfer/conversion. As such, for smaller sums less than $700-1000, you may just be better off using your bank to wire the money, especially if it’s far more convenient. For larger sums, you will certainly save a lot of money.
In fact, CurrencyFair offers perhaps the cheapest method for the average person to convert from one currency to another out of any available service.