international-money-transfer

Comparing currency exchange companies?

These 8 hints can save you money on your next international transfer.

8 April 2016: We compare international money companies you can use to exchange Australian dollars to a foreign currency so you can make a payment overseas. Not all international payment companies are created equal, especially when you compare your bank against what else is out there. Read these 8 hints so you can avoid the traps of currency exchange.

Don’t just use your bank

Banks are notorious for overcharging consumers, this applies to international payments as well as everyday banking services. Although international payments directly from your bank account are convenient – there’s no need to open a new account with a foreign exchange service. Banks charge a commission when you send money oversea and bank foreign exchange rates are usually 3% or more above the market rate. Compare international payment companies and spend a couple of minutes opening an account and you’ll be rewarded with a better deal.

$AUD to €EURBig Four BankInternational Money Transfer Service
Rate$1 = €0.6237*$1 = €0.6650*
Commission$20.00$6.96
Total€623.70€660.32
Difference+€36.62 / $68.09^

*Current 12.00pm GMT: 06/04/16

^Including the difference in commission

Sometimes it’s worth paying a commission to get a better rate

Don’t go for the first money transfer company you see just because they don’t charge a commission on your international payment. Often, these companies will include the commission by applying a margin to the exchange rate. Before you agree to a deal, make sure you compare at least two deals, one with a commission and one without.

$AUD to €EURWestern UnionHiFX
Rate$1 = €0.6337*$1 = €0.65545*
Commission$10$15
Total€633.66€655.50
Difference+€21.84 / $27.83^

*Current 12.00pm GMT: 06/04/16
^Including the difference in commission

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Don’t be fooled by the online calculator

A lot of the online calculators give an indicative rate only. You’re shown an example rate based on the market rate and it won’t be the rate you will actually get when you request a full quote to send money overseas.

You will be able to see an asterisk next to the company’s online currency calculator if an indicative rate is used as shown in the screenshot below when we used the WorldFirst currency converter  to send $1000 AUD in EUR to France.

image00

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If you have time you can save yourself a lot of money

You can send a cash payment to a person on the other side of the world in minutes with help from companies such as Western Union and MoneyGram. But you'll pay a premium for speed. If it's not urgent, its worth using a foreign exchange provider such as OFX, HiFX, Transferwise or CurrencyFair. These companies can send money to an overseas bank account in a couple of days, and you’ll pay a lower commission and get a better rate.

If you have time a limit order can save you money

A limit order lets you target a rate to trade at. If you have time to wait and watch foreign exchange markets before executing out your international money transfer, a limit order ensure you get the best rate you can. When you targeted rate becomes available, your currency exchange account manager (not available with banks for personal customers) will execute your trade.

Protect yourself from losing out with a stop loss order

A stop loss order works in the opposite way to a limit order. Instead of targeting a "best rate scenario", a stop loss order protects you from worst case scenarios. If the exchange rate drops to a certain level, your trade is executed to prevent further losses. You can use limit and stop loss orders at the same time.

Compare, compare and compare again

Don’t go for the first company you see if you want to exchange currency and make an international payment. make sure you compare deals side-by-side and make an informed decision when you accept a quote from a company and pay for a transfer.

What about asking for a better deal?

If you’re a corporate customer, and you deal in large transactions or recurring payments, you may want to see if any of the currency exchange companies can cut you a deal. Worst case scenario: they say no. Best case scenario: you save money.


There international money transfer market is opening up. Now more than ever you can get a good rate, pay next to no commission and send money overseas. If you have any questions about your currency exchange comparison, get in touch with us using the form at the bottom of this page and a member of the finder team will be in touch.

Jacob Joseph

Jacob is a writer and video journalist with finder.com.au. Credit cards, personal loans and savings accounts are his bread and butter, and he likes nothing more helping people understand the sometimes overly complex world of personal finance.

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