TransferWise vs Frontierpay: Two Very Different Companies
Want to transfer money but don’t know the best provider to go through? Not a problem. We’ve made a comparison of two major money transfer providers in Australia. After reading this you'll have a clear answer on which one is best for you.
The Important Bits
Safety: Based in the UK, licensed and well backed
Rates: You receive the interbank exchange rate on google
Fees: Percentage based fee
Speed: 1-2 business days for most transfers
Service: Limited phone support but excellent online resources
Safety: Also based in the UK, licensed and well backed
Rates: Depends on the currency and amount you are sending
Fees: No fees
Speed: 1-2 business days for most transfers
Service: Excellent customer service both on and offline
Safety: Both are well licensed in the UK and Europe but TransferWise has better security outside of these regions.
Rates: TransferWise gives the interbank rate and will always be better
Fees: TransferWise is a percentage based fee but Frontierpay is fee free
Speed: TransferWise is faster on most transfers
Service: Both have excellent track records for service but if you want to speak to someone, Frontierpay just wins out
TransferWise and Frontierpay are both good at what they do - most reviews and customer forums will point that out.
The thing is, while they both allow you to transfer money overseas, they focus on different kinds of customers.
Frontierpay is very good at servicing businesses, particularly large corporates and NGO's. They also tend to service personal customers with larger transfers very well.
TransferWise on the other hand, are very good at taking care of anyone sending $2 to about $20,000. The business customers they suit best are freelancers, online sellers and wholesalers.
For this reason, both are good options depending on which kind of person or business you are.
Learn more about TransferWise
Learn more about Frontier Pay
Let's have a look at them in more detail
Summary of TransferWise
Where did it first start?
TransferWise is a UK-based, online money transfer company. It was first started in London by two Estonians, Taavet Hinrikus and Kristo Käärmann. They both wanted to make converting Great British Pounds to Euro a lot easier and affordable, so they were able to send more money home to their families in Estonia. First established in 2011, it has now grown into a multi-national company and has a strong presence in Australia.
How does it work?
Unlike any of its competitors, TransferWise has a unique technological system for its transfers. Instead of conventionally sending the money to the recipient abroad, TransferWise reroutes its payments and finds a similar payment going in the opposite direction. The recipient of the payment will therefore receive the money not from the person sending the transfer to them, but the equivalent sender in the same country. What this means is that the money transferred never leaves the border, thus avoiding currency conversion fees.
E.g. Susan is wanting to send $1000 AUD to her son in Thailand. At the same time however, we have Ben who wants to send 1000 THB to his girlfriend in Australia. Instead of arranging two conventional, international money transfers, TransferWise will automatically reroute Ben’s payment of 1000 THB to Susan’s son, and Susan’s transfer of $1000 AUD to Ben’s girlfriend. No payment is therefore costed as international, saving both customer and TransferWise money on conversion and any other additional fees.
A lot of TransferWise’s success lies in its app, which has been designed to be an, easy-to-use way of organising and tracking transfers across the globe. It’s available for download on all phones, and as TransferWise doesn’t have any branches, it relies all on online use.
Security of TransferWise
We know that it can be nerve-wracking to trust a new provider with your money, but TransferWise is fully regulated by the Australian Securities and Investments Commission (ASIC) and is registered with the Australian Financial Intelligence Unit (AUSTRAC). The registration numbers are:
- ASIC: 456295
- AUSTRAC: 168331191
Summary of Frontierpay
Where did it first start?
Established in 2009 and originally known as the FX Firm, Frontierpay (renamed in January 2017) is another UK-based company that transacts $1 billion annually. As a privately-owned, slightly bigger company than TransferWise, it covers a wider range of services from expense management, mass payroll to international money transfers. Focusing on the latter, you are given the ability to open a personal account or business account based on the reason and circumstances behind your transfer.
How does it work?
You will be assigned a dedicated account manager with Frontierpay, who will organise you competitive exchange rates, with one of their Forex market specialists. The website also boasts that their account managers, unlike a lot of other money transfer companies, do not work on commission, so you can trust the advice you recieve.
It gives to customers the ability to watch rates and receive alerts when their favoured exchange rate is reached. You can organise a one-off payment with Frontierpay, or a fixed-payment plan if you’re looking to make regular payments.
Security of Frontierpay
- Frontierpay is an FCA (Financial Conduct Authority) authorised and regulated global payments specialist. Number: FRN 577057
- Frontierpay maintains segregated customer accounts. This means that Frontierpay keeps their customers’ assets separate from their company accounts, meaning that if the worst were to happen, the customers’ assets would still be protected.
Available currencies to transfer
All money transfer companies will offer 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. We’ve put some of the major currencies supported below for you to see:
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.
Frontierpay’s website openly boasts that it supports 140 currencies, but will not give you a full list. However, we do know it includes the following: EUR, GBP, AUD, USD, SGD, THB, CAD, AED, JPY, NZD, HKD, INR.
Unfortunately, the website does not offer a full list of all the currencies. They instead ask that you get in contact.
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 when you choose to transfer your money on a particular day.
- TransferWise will transfer your money within 0-2 business days.
- Frontierpay will transfer your money in 1-3 business days.
Minimum and maximum amounts to transfer
In the UK, TransferWise has a minimum amount of 1 GBP and a maximum amount of 1,800,000
Frontierpay is 500 GBP and no upper limit.
Exchange rates and fees
We know that hidden fees and unexpected charges are annoying when you’re looking to transfer your money abroad. A lot of companies will charge either a fixed fee or fee that varies based on certain details of your transfer. This can be applied at all times, or some providers will waive the fee over a certain amount.
The details that will affect your transfer are:
- The current exchange rate
- The amount you are transferring
- The currency which you send
- TransferWise charges a fee of 0.7% up until $10,000 AUD, and the fee then drops to 0.5%.
- Frontierpay charge no fees.
To help you be 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)|
What does the above tell you?
- TransferWise boasts that it doesn’t add a mark-up on the mid-market rate, i.e. the rate you get from xe.com. This is unlike banks who add a big mark-up, usually twinned with low fees, and take their profit from this margin. TransferWise simply deducts their fee before conversion, giving the you best exchange rate with no mark-up, and no hidden fees.
- Frontierpay, in comparison, doesn’t charge any fees, but they add a mark-up on the exchange rate (note that this is still less than banks). This results in them offering less than TransferWise after conversion.
- TransferWise will charge you an additional 0.6% if you use an Australian business credit card.
Pros and Cons of TransferWise and Frontierpay
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 smartphones||Transaction fee applies||You get your own personal account manager.||There is no live quoting available on their website. You have to sign up to obtain a quote.|
|No conversion costs which allow TransferWise to add zero mark-up of the mid-market exchange rate||No cash pick-ups||No transfer fees.||No cash pick ups.|
|Very informative website with a detailed FAQs page||Fewer options than competitors in types of transfers they offer||Multiple options for international transfers.||Webiste is very limited in the information provided.|
|Quick transfers of 0-2 business days.||Only English contact numbers for phone advice.|
Whatever your reason for transferring money abroad research is important. 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. Remeber the importance of being 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.