How You Can Use Peer-to-Peer Money Transfer Services to Your Advantage

Information verified correct on December 6th, 2016

Save money and enjoy fast processing times when you send money overseas using a peer-to-peer money transfer service.

Rates last updated December 6th, 2016
Description Min. Transfer Amount Transfer Speed Services Online Transfer Fee Rate Amount Received
Exclusive: CurrencyFair International Money Transfers
Exclusive: CurrencyFair International Money Transfers
CurrencyFair uses a peer-to-peer marketplace to offer you the best rates and low fees. Free one transfer if you apply via finder.com.au. EUR 8 2 days Online Go to site More
TransferWise International Money Transfers
TransferWise International Money Transfers
A peer-to-peer transfer service from the people who built Skype. AUD 1 1 day Online Go to site More

Rates last updated December 6th, 2016
Description Min. Transfer Amount Transfer Speed Services Online Transfer Fee Rate Amount Received
TorFX International Money Transfers
TorFX International Money Transfers
TorFX can assist your business with forward contracts, different order types, currency analysis and competitive exchange rates. AUD 200 1 day Online, Phone, Agent Go to site More
Exclusive: World First Foreign Exchange
Exclusive: World First Foreign Exchange
Cheaper and faster international money transfers for your business. AUD 500 2 days Online, Phone Go to site More
Exclusive: OFX (Ozforex) International Money Transfers
Exclusive: OFX (Ozforex) International Money Transfers
OzForex offers their business clients with competitive exchange rates, fee-free transactions with 24/7 customer service. AUD 250 1 day Online, Phone, Agent Go to site More
Currency Online International Money Transfers
Currency Online International Money Transfers
Protect your business against market fluctuations. AUD 0 2 days Online, Phone Go to site More
Compass Global Markets International Money Transfers
Compass Global Markets International Money Transfers
Hedge your foreign exchange risks by becoming a client. AUD 1,000 2 days Online, Phone Go to site More
Currency Solutions International Money Transfers
Currency Solutions International Money Transfers
You can increase your profit margins and mitigate currency risk with Currency Solutions. AUD 3,000 2 days Online, Phone, Bank Account to Bank Account Go to site More
World First Foreign Exchange for Online Sellers
World First Foreign Exchange for Online Sellers
Open bank accounts in the UK, US, Canada and Eurozone and sell on more marketplaces while reducing the cost of repatriating earnings. Buy goods from China and sell them in the USA. AUD 250 2 days Online, Phone, Agent Go to site More

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Optimized-How peer-to-peer international money transfers work

Although international money transfers were traditionally conducted via banks, it’s now possible to take advantage of peer-to-peer banking services for money transfers. These services provide networks where people can share access to currencies without the need of a central server, allowing you to cut out the middle man. As a result, the money transfer process is simplified and you can save money.

You can use the table below to compare peer-to-peer money transfer services based on fees, minimum transfer amounts and transfer speed. If you're interested in finding out more about a transfer service click 'More', or if you'd like to open an account click 'Go to Site'.

How do peer-to-peer money transfers work?

The process of a peer-to-peer money transfers (also known as a P2P money transfer) is simple. First, you need to select how much money you wish to transfer and where you’re sending it. You can then upload your funds to your money transfer provider, which will then convert your money at the mid-market rate and match you up with a person sending funds in the opposite direction. So if you’re sending money from Australia to the United States, you’ll be matched with someone sending funds from the United States to Australia.

This allows customers to cut out the middlemen in the exchange—the banks—and enjoy better exchange rates and lower transaction fees.

Peer-to-Peer vs Bank

Lauren wants to send $1000 to her mother in the UK. In order to find the best possible money transfer deal, she compares the services offered by her ‘big four’ bank with a peer-to-peer money transfer service like TransferWise or CurrencyFair. The results can be seen in the table below.

BankPeer-to-peer money transfer service
Amount transferred$1000$1000
Exchange rate£0.52£0.55
Fee charged$25$2
Amount received£507£548.90

As can be seen in the example above, if Lauren sent her funds using a peer-to-peer service she would be sending an extra £41.90.

How do I compare peer to peer-to-peer money transfer services?

You’ll need to take the following features into account when comparing peer-to-peer money transfer services.

  • Exchange rates. The exchange rate is a very important factor when determining how much money you can save, so look for the company that offers the best rates. However, keep an eye out for companies that suck you in with great rates but then slug you with high fees.
  • Fees. Make sure you’re aware of all the fees attached to your transaction. Does the company charge a flat fee or is it a percentage based on the amount you’re transferring? Is the fee waived entirely if you transfer more than a certain amount?
  • Minimum and maximum transfer amounts. You’ll need to check how much a company will allow you to transfer, as minimum limits might be too high for some and maximum limits may be too little for others.
  • Transfer methods. Compare whether your transfer can be lodged only online, or whether there are phone and in-person options available as well.
  • Other extras. Compare whether providers allow you to lodge forward contracts—where you lock in an exchange rate for a transaction that will occur at a later date— or limit orders, which is where you lock in a minimum exchange rate and the transaction is not completed until the market fluctuates and your chosen rate is available.
  • Customer service. Is the company known for providing excellent customer assistance? Is there an online help centre and live chat available? Can you email or phone for support, and during what hours is each provider’s support centre open?
  • What currencies are available? You’ll need to compare which currencies each provider offers and which destinations you can send money to.

What are the pros and cons of using a peer-to-peer money transfer service over a regular service?

Pros

  • Better rates. Peer-to-peer money transfer services usually offer better exchange rates than banks.
  • Lower fees. You’ll typically pay less to transfer money via one of these providers than you would through a bank.
  • Fast. Peer-to-peer money transfer services regularly offer faster processing times than banks, with transfers often able to be completed within one business day.

Cons

  • Supported currencies. While more supported currencies are added all the time, as peer-to-peer money transfer providers are relatively new, they do not yet offer the same number of exotic currencies and transfer destinations as major money transfer services.

Are there any risks?

When you’re making an international money transfer, it’s important to keep an eye out for exchange rates and fees. Poor exchange rates can eat up a big chunk of your money if you’re not careful, while hidden fees can be a nasty surprise if you don’t read the fine print before lodging a transfer.

It’s also essential that you ensure you are dealing with a reputable company. Do your research before you commit yourself so that you don’t end up the victim of a dishonest provider.

Frequently asked questions

Do these companies charge a commission?

The fees charged vary between providers. While some charge a low flat fee, others will charge a fee which is a percentage of the funds you are transferring.

What currencies are available?

Major world currencies like the United States Dollar, the Euro, the Great British Pound, the Japanese Yen and plenty more are available. For a full list of supported currencies, contact a provider.

Can I use these services for business transactions?

Yes, you can use a peer-to-peer money transfer service for a legitimate business transaction.

Who provides this service?

You can find more information about peer-to-peer services you can compare in the table above.

Marc Terrano

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at finder.com.au. Talk to him to find out more about home loans.

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Exclusive offer: $0 transfer fee
Transfer money into a range of currencies online and over the phone.

Exclusive: CurrencyFair International Money Transfers

Exclusive offer: 3 Free transfers (after your first transfer).
A peer-to-peer transfer service with a large range of currencies on offer.

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6 Responses to How You Can Use Peer-to-Peer Money Transfer Services to Your Advantage

  1. Default Gravatar
    | April 12, 2016

    I am going to Europe in February 2017 which is 9 months away and I want to buy euros when the AUD is at its highest. If this were to happen in 4 weeks time and I entered into a peer to peer transaction then,

    1. how and where do I collect my funds?
    2. is it possible to have a forward contract like this or not?

    If this sort of transaction requires a bank account then it would be possible to use a low cost forex company and park the funds. The real issue is that it is nigh well impossible to open a banking account in Europe unless you reside there. I have tried. Hence the interest in peer to peer transactions.

    If all else fails meeting the counterpart when one half or the other arrives overseas seems like an option, where a physical exchange of funds is possible.

    Getting rather messy!

    • Default Gravatar
      Harry | April 13, 2016

      Hi Mick,

      Thanks for your question.

      Unfortunately you cannot use a peer-to-peer currency exchange service to pick up money in Europe unless you have a bank account there.

      Peer-to-peer international money transfer services like Transferwise and Currency Fair don’t offer limit orders as well, so it’s generally not possible to conduct these.

      Alternatively, you may want to consider bringing a debit card overseas for your travel. You can compare your options here.

      I hope this helps,

      Harry

  2. Default Gravatar
    Neville | December 12, 2015

    My recipient in Chiang Rai Thailand does not have a bank account, is there any other provider besides Western Union that will be able to facilitate a cash transfer?
    Thanks

    • Staff
      Shirley | December 14, 2015

      Hi Neville,

      Thanks for your question.

      Moneygram and Worldremit also offer cash pick up options.

      Cheers,
      Shirley

  3. Default Gravatar
    Cyprien | February 10, 2015

    I am in Rwanda,I would like to use World Remit and i realise that rwanda is not eligible in your list.how to do?

    • Staff
      Shirley | February 11, 2015

      Hi Cyprien,

      Thanks for your question.

      There are number of organisations that may be able to assist: MTN Mobile Money Online, Ria Financial Services and I&M Bank.

      Your local bank may also be able to assist with this transaction.

      Cheers,
      Shirley

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