OFX vs Wise (TransferWise)
We compare OFX and TransferWise to see which provider you should go with for your next transfer.
In the world of international money transfers, OFX and Wise have emerged as leading brands in Australia. They typically offer better exchange rates and lower fees than your local but cater to different audiences. OFX specialises in large money transfers and Wise is more suited for smaller amounts. Below we cover how their fees, exchange rates and transfer speeds differ to help you make the right choice.
Which has lower fees?
OFX charges a $15 flat fee unless your transfer is over $10,000, if you're a new customer they might waive the flat-fee to entice you. It's also worth noting, OFX have a minimum transfer amount of $250.
With Wise, fees depend on the payment method, the amount and the destination. Their fees normally range from 0.45% to 1.5% of your transaction. For example, sending $1,000 to Bangladesh will cost you $9.25, while sending $1,000 to Canada will cost you about $5.85.
For smaller transfers, Wise will be a better option for you in terms of the fees. But if you're making a larger transaction, OFX may end up being more cost-effective as you pay no fees above a certain limit and offer from forex tools. We're calling this one a tie.
Let's crunch the numbers: Sending $1,000 and $10,000 to the United States
To put this into the context of a real-world transaction, this is what two different transfers look like when sending money with Wise and OFX. Keep in mind that transferring to other currencies will have different fees involved and may take longer.
In our imaginary scenario, we'll be using a bank transfer.
Sending $1,000 to USA
|Exchange rate||$1 AUD = 0.6298 USD||$1 AUD = 0.6332 USD|
|Transfer speed||1 - 2 business days||1 business day|
|Total dollars received||620.95 USD||629.85 USD|
|Receiver gets||9.45 USD less||9.45 USD more|
Sending $10,000 to USA
|Exchange rate||$1 AUD = 0.6304 USD||$1 AUD = 0.6335 USD|
|Transfer speed||2 business days||1 business day|
|Total pesos received||6,304 USD||6,304.84 USD|
|Receiver gets||0.84 USD less||0.84 USD more|
The exchange rates were taken from each providers website on 1 November, 2023. In both scenarios Wise wins but as you transfer more money, the gap between OFX and Wise narrows.
Which offers better exchange rates?
A typical exchange rate at OFX is about 0.50% to 3% above the mid-market rate. For example, OFX charges a 1.84% markup on USD and a 2.09% markup on Euro transfers. So while OFX doesn't charge a fee for transfers over $10,000, it still makes money from this margin.
Exchange rates are where Wise shines. It's one of the few money transfer services that offer you the mid-market rate, the best available. So if you're sending $1,000 to the Philippines and the mid-market rate is $1 AUD = 37.09 PHP, that's the rate you're going to get.
There's no denying the power of paying the mid-market rate.
Which is faster?
Most currencies will take one to two business days. However, if you're sending money to the US, it often arrives within a day.
Depending on the currencies involved and your payment method, it could take up to four business days for your recipient to see your cash. Paying by card is by far the fastest method, with your money arriving there immediately in most cases.
Both providers can get your money there fast for certain payments or currencies, but Wise has the faster transfers overall.
|Payment methods||Receiving options||Minimum and maximum transfers||Transfer speeds||Currencies||Safety|
|24 hours||54 currencies||Regulated by: ASIC, FCA, FINTRAC, FinCEN, C&ED, MAS, FMA|
|Within minutes||52 currencies||Regulated by: ASIC, FCA, FINTRAC, FinCEN, C&ED, KLFB, DIA, MAS|
With OFX, you go to its site, enter how much money you're transferring and send your funds to an OFX account. OFX then converts your currency and sends it to your recipient, who collects it via bank transfer.
For Wise, you go to its site, select the currencies you are exchanging and indicate how much you want to send. After reviewing your rate and fee, you're given Wise's bank details and PayID to send the money to. Wise sends the money once it's received.
When it comes to money transfers, OFX and Wise are forces to be reckoned with but serve different types of customers. Wise is suited for small, regular transfers while OFX is built for large, one-off transfers and provides better customer support. OFX can't compete with Wise's exchange rate but has tools such as forwards contracts that can give you competitive rates if your transfer isn't urgent.
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