Any savvy person who is used to making transfers abroad knows that the banks rip you off on the currency exchange , typically around 5% of your transfer goes into their trousers and bureau de change are even worse. Far better are currency brokers like IFX.com or Currenciesdirect.com that will shave more like 1% or even less for larger amounts. The trouble with these guys though is they are still on the make and you have to have a rather robust conversation with their salesmen who wont offer you the best deal unless you tell them you’ve done your research and you know the best deals out there. They will then change from being your best friend into finding you tiresome particularly if you are not bringing them loads of business and will want to get off the phone to talk to someone more important and profitable. If like me you dont like these kind of conversations then you will like the following websites where you get shown the price , you know the deal is market leading and you can just get on with it. Simples.
CurrencyFair is basically peer to peer currency trading and the video below explains the principle well so I’ll let it do the talking
I’ve just changed some money successfully and its possible to even beat the mid market price if theres someone on the other side whose desperate enough to get hold of the cash enough. At the time of writing CurrencyFair were not taking a commission but in a few days time they will be adding a 0.15% commission within the price. I think we should stomach that and congratulate them for creating another bank busting service.
TransferWise is a neat bank busting solution , they allow you to make currency transfers (currently only Pounds and Euros) at the mid range exchange rate for a fixed fee of £1 for amounts up to £300. They charge higher fees above that and the maximum at the moment is £5000 for which my online quote at time of writing was £24.50 , still not bad compared to say Barclays at a cost of nearly £350! Plus of course the banks wont explain to you what they charge it will be all hidden in mumbo jumbo and the usual deep voiced, red braces twanging sniffy tones that make you feel embarrassed to have asked.
There are of course much better alternatives to the banks in the shape of specialist currency brokers but they typically charge 1% compared to TransfersWise’s 0.5% as in the illustrated quote above and they would only become more competitive for larger amounts.
Hopefully in time TransferWise will have a wider selection of currency swaps and be able to handle larger sums and hopefully maintain their competitive edge, time will tell.