With so many providers all competing, it can be an overwhelming process choosing who to go through for your international money transfer. Luckily for you, we’ve condensed two of the biggest UK providers into a comparative article. Although both UK-based, these providers are big names in the global money transfer industry so offer simple and easy transfers from AUD to multiple currencies around the world.
This article will cover:
- General summary of TransferWise
- General summary of Currencies Direct
- Available currencies to transfer
- Exchange rates and fees
- Payment methods/Types of payments
- Time to transfer
- Pros and Cons
Summary of TransferWise
Where did it first start?
Established in London in 2011, TransferWise has rapidly risen to the top of the international money transfer providers. It has now grown into a multi-national company, with a particularly strong presence in Australia.
It was started by two Estonian men working in the UK, Taavet Hinrikus and Kristo Käärmann. They wanted a more affordable way of converting their earnings in GBP to EUR, so they were able to send money back home to their families.
How does it work?
Arguably, TransferWise bats away its competitors with ease, based on two factors:
- It’s easy-to-use, simple and fast app
- It’s unique system of internationally transferring money
Focusing on the latter point, TransferWise has created a way of transferring money outside of the conventional process. Instead of sending money across international borders and incurring conversion costs, TransferWise reroutes its payments and finds a similar payment going in the opposite direction. The recipient of the payment will therefore receive the equivalent sender in the same country, not from the actual sender in another country. What this means is that the money transferred never leaves the border, thus avoiding currency conversion fees.
E.g. Peter is wanting to send $2000 AUD to his sister in New Zealand. At the same time however, we have Penny who wants to send $2000 NZD to her mum in Australia. Instead of arranging two conventional, international money transfers, TransferWise will automatically reroute Peter’s payment of $2000 AUD to Penny’s mum, and Penny’s transfer of $2000 NZD to Peter’s sister. No payment is therefore costed as international, saving both customer and TransferWise money on conversion and any other additional fees.
Security of TransferWise
TransferWise is fully regulated by the Australian Securities and Investments Commission (ASIC) and are registered with the Australian Financial Intelligence Unit (AUSTRAC). The registration numbers are:
- ASIC: 456295
- AUSTRAC: 168331191
Summary of Currencies Direct
Where did it first start?
Established in 1996, it has its headquarters in Canary Wharf, London with various other global offices. These offices include France, the US, India, China and South Africa. It was founded by two individuals, Mayank Patel and Peter Ellis and turned over £12 million in its first year. In comparison to today, it now has over 150,000 active clients and turns over £4.5 billion annually.
How does it work?
You’ll have to open an account with Currencies Direct and fill in an application form, which will take up to 48 hours to be approved. You can complete your transfer online or over the telephone (note, they do not have an Australian office or number so you will have to pay international phone charges), and you’ll get assigned a dedicated account manager for your transfer. Currencies Direct's website boasts saving up to 75% on marketplace foreign exchange.
TIP: Research the document you will need for registration, so you have them at the ready.
Security of Currencies Direct
Currencies Direct Ltd is authorised by the Financial Conduct Authority as an Electronic Money Institution under the Electronic Money Regulations 2011.
- FCA Firm Reference number is 900669.
Currencies Direct Ltd is registered in England & Wales at One Canada Square, Canary Wharf, London, E14 5AA, No. 03041197.
Available currencies to transfer
All money transfer companies give you the ability to transfer in any main currency, such as GBP, AUD or USD. If you think you might need a company that allows you to transfer in a less popular currency, then you will need to do your research.
Can support 41 currencies:
- send and receive in 19 currencies, including the following: EUR, GBP, USD, AUD, CHF, CAD, NZD, JPY, SGD.
- send only in 21 currencies, including the following: INR, HKD, THB, AED, IDR, MXN, CNY, VND.
- send only via SWIFT: ZAR.
For more information on all the currencies, click here.
Currencies Direct support 63 currencies, including: GBP, EUR, USD, CAD, AUD, NZD, JPY, HKD, SGD.
For more information on all the currencies, click here.
Minimum and Maximum amounts to transfer
|Minimum||$1||£500 (or currency equivalent)|
Exchange rates and fees
We know that hidden fees and unexpected charges are annoying when you’re looking to transfer your money abroad. This is especially true when it is taken from the amount you want to send someone and resulting in the recipient not receiving the intended amount. A lot of companies will charge a fee (fixed or a reflection of your transfer) up until a certain amount, of which the fee will then reduce or be waived.
- TransferWise charges a fee of 0.7% up until $10,000 AUD and the fee then drops to 0.5%.
- Currencies Direct charges zero fees.
To make you aware of the costs involved, we’ve put together a table below showing you the fees, and exchange rates based on $1000 AUD-USD, to show you who is cheaper.
All information was obtained March 2017, and is subject to change based on the financial market.
|Start||Fees||Exchange Rate||Total USD|
Some companies, like TransferWise, have fees that differ based on the amount you send, rather than a fixed rate fee. So, what factors add up to calculate the fee?
- The current exchange rate
- The amount you are transferring
- The currency which you send
In comparison, other providers will charge a fixed fee that will either be waived for a certain amount of money, or reduced.
What does the above tell you?
- TransferWise boasts that it doesn’t add a mark-up on the mid-market rate so you get the rate listed on xe.com. Unlike banks who add a big mark-up (usually twinned with low fees) and take their profit from this margin. TranferWise simply deduct their fee before conversion, giving you the best exchange rate with no mark-up, and no hidden fees.
- Currencies Direct, in comparison, doesn’t charge any fees, but adds a mark-up on the exchange rate (note, this is still less than banks). This does result in them offering less than TransferWise after conversion.
- TransferWise will charge you an additional 0.6% if you use an Australian business credit card.
Payment methods/types of payment
It is important that these providers offer varied types of payments. Different circumstances mean that different people need to set up monthly or regular payments, or perhaps a fixed forward payment with a desired exchange rate. If this is you, it is important to do your research before choosing a provider to ensure they accommodate the type of payment you wish to make.
We’ve put together a table below showing the types of payments both providers offer.
|Normal payment||Long put|
|Repeat payment||Long call|
|Amount lock payment*||Participating forward|
*this feature is only available in certain currencies: GBP, EUR (for payments from mainland Europe), AUD, BGN, CHF, CZK, DKK, HRK, HUF, JPY, NOK, NZD, PLN, RON and SEK
Time of Transfer
If it’s important that the payment reaches the recipient as quickly as possible, then you will need to do your research on the times of transfers of the providers you’re looking at. In general, banks are the quickest but these days, providers are not far behind, if at all.
The time taken to complete your transfer will depend on the country you are sending the money to, and the cut-off times you choose to transfer your money on a particular day.
- TransferWise will transfer your money within 0-2 business days.
- Currencies Direct will transfer your money in 1-4 business days.
Pros and Cons of TransferWise and Currencies Direct
As with everything, each provider will have its benefits and negatives. We’ve put together a table of pros and cons for both below:
|Really easy and quick app available to all smart phones.||Transaction fee applies||No transaction fee on any transfer made||Not much of an Australian presence or contact number|
|No conversion costs which allow TransferWise to add zero mark-up of the mid-market exchange rate||No cash pick-ups||Recent re-built app available to all smartphones||No cash pick-ups|
|Very informative website with a detailed FAQs page||Fewer options than competitors in types of transfers they offer||Added value for larger transfers with competitive exchange rates||Some feedback tell of rude staff|
There are many reasons for transferring money abroad. Whether it be to transfer money back to family, to pay bills or mortgage payments on an overseas residence, or perhaps transferring larger amounts of money from a property you have recently bought or sold. Whatever the reason, it’s imperative that you are aware of the exchange rate you’ll get and fees involved.
If it’s larger payments, then the exchange rate can mean the difference of hundreds of AUD. If you would like to speak to one of our friendly, professional advisors, contact us on 1800 004 930.
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