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- Find the best rate on the CurrencyFair marketplace
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International money transfers were traditionally conducted via banks, but it’s now possible to take advantage of peer-to-peer banking services for money transfers. Similar to P2P payment apps like Venmo or Facebook Messenger that let you send money easily between friends or family domestically in the US, international peer-to-peer money transfer 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.
The process of a peer-to-peer money transfers 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.
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.
|Cost to send a $1,000||Bank||Peer-to-peer money transfer service|
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.
You’ll need to take the following features into account when comparing peer-to-peer money transfer services.
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 initiating a transfer. Compare all of your options before choosing a company that’s best for your needs.
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