Ben Todd | Jun 2, 2017 | 0
TransferWise vs. CurrencyFair: Which is Better (in 2017)?
Both TransferWise and CurrencyFair are very good companies and both worth looking into if you want to send money abroad. Some of the criticisms listed on this article are a little cutting, but none of them are deal breakers.
Note, this article has been updated for 2017
There are criticisms that may push you to do a little more research before you use one or either of the companies, but at the end of the day, there very few reasons why you shouldn’t use these companies to convert and transfer your money if you want to get the cheapest deal possible.
Simple put, you won’t likely find another solution that will allow you to transfer money abroad for so cheap — even now at the end of 2016. So if you don’t mind waiting a little extra time and / or you live in an area where these companies operate (they don’t operate in some of the bigger markets as of yet, which means it can be a pain trying to deposit money to the company), then we recommend you use either service.
What’s a Peer-to-Peer Currency Exchange?
Both TransferWise and CurrencyFair are able to convert and move money for you from one country to another, and both are peer-to-peer transfer services. TransferWise was established in 2011, and CurrencyFair in 2009. TransferWise is the bigger company and has currently transferred more money than CurrencyFair.
Both are peer-to-peer transfer services, which is why they are able to offer such low rates. It is highly recommended that you do a little research into each company before you consider alternatives, because there is a good chance they may offer you the best deal.
These methods are actually a fantastic way to move money from one country to another whilst paying tiny fees. Imagine you were working and getting paid in the US and you wanted to transfer money to your daughter in the UK. You could have your US dollars converted by a bank or transfer service and have it sent over with a bunch of fees and deductions. Or, you could call a friend in the UK and ask them to put money in your daughters account, on the condition that you put money in their account in the US.
Peer-to-peer transfers happen in a very similar fashion. Your money doesn’t move across to another country, you put your money into another person’s account, and they do the same in the destination country of your choice. They pay as much money as you pay in to their account according to the exchange rate.
Obviously, the whole process is not as personal as the examples make it sound. The transfer services act as an intermediate that takes care of getting money from one so that it may be placed in another account.
A Quick Run Down of What Each Service Offers
- Both TransferWise and CurrencyFair have online capabilities, but CurrencyFair has phone assistance too.
- They are both primarily based online, which is one of the reasons they are able to offer such great deals. Both are able to transfer money within one to two day, both accept regular payments and both have a mobile app.
- They both have very low minimum transfer limits
- And both are very highly rated by the online community.
With TransferWise, sending and converting $1000 to Euros will get you 870.99 Euros, and with CurrencyFair, you get 874.88 Euros, which means CurrencyFair has the best deal. This appears to be the case even with larger amounts. For example, if you use TransferWise to send $25,000, you get 21,826 Euros, but with CurrencyFair you get 21,956, which means you would get 130 Euros more with CurrencyFair. Despite this small discrepancy between them both, you still save between 80% and 90% compared to if you use the big banks.
Why Would People Choose Banks?
There are many banks and larger companies that offer discounts and fee-free periods that adequately compete with CurrencyFair and TransferWise. Plus, if the user at the other end has a bank account with a same bank, then there are less likely to be receipt charges applied at the other end. There are ways to avoid receipt/retrieval charges at the other end; it is usually a case of picking the right account to transfer it into. The banks are also more trusted (believe it or not) because they invest more in security and so forth.
Niggling Concerns About TransferWise and CurrencyFair
These are the things that do not matter to their service, but may be annoying.
Transferwise Cons: TransferWise is also known for reputation management, such as posting their own positive reviews online and pointing people to their positive reviews as a way of helping people ignore their bad reviews. TransferWise have even set up websites that review transfer services, just so they can appear at the top. This sort of ‘self marketing’ is not a good way to build brand and really does hurt their reputation online. HOWEVER, that doesn’t change the fact that their service is reliable and delivers on what it promises. Transfer-wise is also a little more expensive than CurrencyFair. It’s possible with CurrencyFair to get a better than market rate, with TransferWise, you can’t get as cheap as that, but you still can get 90% cheaper than other non-peer to peer transfers will allow you.
CurrencyFair Cons: This comapny has fewer annoying traits, but one of them is the fact they rarely update their website, but it doesn’t affect the user experience. Another con is that it can take a few days to a week for the transfer to finish — this is especially the case if you try and get a better than market rate for your exchange. If this is the case, expect to wait — so CurrencyFair may not be the solution you need if you want INSTANT transfers.
How Are The Two Companies Different?
TransferWise offer rates that are very close to the market rate. This means they are not skimming very much from the exchange rate in an industry where such a practice is very common. With CurrencyFair, you have an opportunity to beat the market rate because it is a peer-to-peer transfer service where you have a little more control, so you can wait for a person at the other end to offer a rate that suits you. Make sure you read my comprehensive review of Transferwise (I’ve been using it personally to send money abroad).
CurrencyFair has a fixed-fee rate that is currently set so that no matter how much you transfer with TransferWise, you will still pay less with CurrencyFair. TransferWise seem to run more promotions and have more coupons, so it may be worth watching their offers to see if any catch your eye. There are not many differences between these two companies, but they are different compared to banks and credit unions that offer transfer abroad. Their prices are far cheaper because they are a peer-to-peer transfer group, plus working mostly online helps the companies save money on overheads, which means they can pass those savings on to the customers.
CurrencyFair charges you 3 Euros per transfer (no matter the amount) and the percentage rate you are charged is given depends on how many people are trying to transfer. The rate can range between 0 percent to half a percent. In comparison, Transferwise charges you half a percent (.005) of your transfer amount. If you say transfer 10,000, that will add up to $50. CurrencyFair would charge you 3 Euros AND you might be able to get less than the .005 rate if you are lucky, which could save you an additional $20 to $50.
Reasons Not To Use TransferWise
As mentioned, they are manipulating their online reputation to the point that when a real review is posted and is negative, the reviewer expresses disbelief at all the positive reviews as he or she opens.
One of the most common complaints for this company is the fact they claim such a fast transfer, and yet many transactions take the standard three to five working days. The odd thing is that this doesn’t apply to everybody. Some people get their money moved within 24 hours for their fist and subsequent transactions, then some have a speedy first transaction and slow subsequent transactions, and some people have a very slow first transaction and then fast ones after that.
TransferWise seems to work with the same reputation management firm that owns TrustPilot. If you do not believe such a thing could be possible, then post a negative review about TransferWise without using foul language, but make it cutting, and within a week your review will be suspended for further review by TrustPilot before being removed. Then, use a different profile and copy-and-paste the same review for CurrencyFair–and it will remain.
TransferWise also has a somewhat shaky relationship with larger financial institutions because they either do not accept certain forms of payment, or it takes longer than it should. For example, you may have your credit card payments declined or greatly delayed without any real reason from the staff.
Reasons Not To Use CurrencyFair
CurrencyFair can make it more difficult to avoid fees at the other end. As previously mentioned, sometimes it is a case of picking the right account to receive the money in order to avoid receipt or withdrawal fees, and CurrencyFair makes that more difficult.
The CurrencyFair Company has also skimped on customer support. Their staff are sometimes rude and they clearly have a high staff turnover at their company because they appear to hire anyone.
There are some people that have to pay a pay-to-withdraw fee, and if you or your recipients are eligible for this fee, then it can feel like a betrayal and a hidden fee. The people affected are usually unaware of this extra fee for withdrawing their money, so it often comes as a nasty surprise–which is no way to do business.
And the biggest reason not to use CurrencyFair in my opinion, is because they don’t support many countries. If you are in the US or Canada, for example, you can’t use CurrencyFair!
Reasons Not To Use Both
If you transfer a small amount (under $1500 – $2000), it may be nearly as cheap and far quicker to transfer via your bank.
Since both require you to send money to the home bank branch, this may involve an international WIRE transfer from your home bank, especially if you are in the US or Canada. This incurs a $25 to $35 dollar fee from your bank. So you will need to add this ‘fee’ onto your total cost. For Europe, you might be able to avoid this wire transfer fee (especially if you bank in the same country in Europe (Estonia or the UK) and with the same bank that Transferwise uses).
For example: $1000 dollars transferred
- wire transfer cost: $30
- .005 fee conversion charge from Transferwise: $5 + $30 = $35
- .035 average conversion fee charged by CurrencyFair: $3.50 + 3Euros +$30 = $36 (roughly).
So regardless of what service you choose, you are going to pay $35 to transfer 1000 usd into another currency. This may or may not be cheaper than your bank doing it.
Which is Cheaper: CurrencyFair or Transferwise
CurrencyFair is cheaper, if you manage to get less than the .005 rate for conversion. This can happen, especially if you are willing to wait a bit longer for the transfer service to match you up with someone.
CurrencyFair, if you get the 0% rate (not usual), you pay about 3 USD for 10,000 dollars. If you get the .0035 average rate, you pay $35 on 10,000. If you get the .005 rate, you pay $50 on $10,000. With Transferwise, you always pay $50 on $10,000.
However, Transferwise is nearly the same. For most transfers, they will cost roughly the same. For ease of use, Transferwise wins hands down and is supported in far more countries than CurrencyFair.
TransferWise vs CurrencyFair Conclusion
Do not always believe what you read on the Internet about TransferWise because they are great at manipulating their online reputation to the point where even we are expecting a cease and desist notification for our review (ok, joking here). Still, the company is pretty great – they just need to tighten up their act when it comes to advertised transfer times.
If a first transfer may take five business days, and the subsequent may only take two days, then they shouldn’t advertise a 1-2 days transfer time. They should be a little more honest for the people that need to send the money fast and have to wait.
For people who do NOT want to play a game of dice and wait, TransferWise is a better choice than CurrencyFair.
Between the two, I do use Transferwise, mainly due to the convenience and the fact that it’s available for me as a Canadian to use between Canada and Thailand (I can’t do the same with CurrencyFair which is not offered to Canadians at time of writing).
You simply accept the slightly higher fee and you initiate a transfer. CurrencyFair can give you a slightly better exchange rate and even a better one than you can find on the market, but you may have to wait a while before you get it. The wait being a couple days to a week or more.
Additionally, both companies operate in different countries and have different methods of payment. This really does mean there is room for both companies.
Note that I’ve personally used them to transfer over 23,000 USD to Thailand a few months ago and it went smooth as silk and I saved nearly 1,000 USD vs if I sent the money via my bank. It took about 5-6 days.
Overall, I feel CurrencyFair is a better company that doesn’t work so hard to engineer its online, and it costs less to transfer money using them. However, Transferwise is a more funded company (backed by the likes of Richard Branson), has a better interface, more staff, and converts to MORE currencies and countries than CurrencyFair. On that note, Transferwise is better. For example, I was unable to use CurrencyFair to transfer from Canada to Thailand, because they don’t do transfers into Thai Baht. Transferwise, does.
And you’ll find Transferwise supports a LOT more countries and currencies.
So here’s what I feel:
- For speed of transfers, ease of use, and more currency conversion options (many which CurrencyFair do not support yet), Transferwise is the better choice
- For the absolute cheapest transfer rate at cost of additional transfer waits, CurrencyFair is the better choice. However, CurrencyFair still does not support some currencies and (many) countries. For example, if you are in North America, you can’t use CurrencyFair!
As such, for most people and for most uses, Transferwise wins by virtue of being offered in far more countries (you can use it in Europe, Australia, UK, Canada, the US, and many more countries). CurrencyFair is only available in Europe and Australia. If I was sending large, large sums abroad, I would opt for CurrencyFair though, just to save a bit more with a slightly better conversion.
What do I use? Well, I use Transferwise right now and it’s what I recommend unless you live in a country where CurrencyFair is supported and you want to squeeze out the very cheapest rate and are willing to wait longer for transfer times.
You can sign up for Transferwise here. Use the widget below to see what your conversion will be: