Peer-to-peer transfers

Wondering what peer-to-peer international money transfers are all about? Here is the information you need.

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There are several ways you can transfer money overseas and these include peer-to-peer transfers. The reason this method is finding increasing popularity is it can lead to noticeable savings, when compared to transferring money through banks or brokers.

Compare peer to peer money transfer services so you can cut out the middleman

Rates last updated February 21st, 2020
Name Product Min. Transfer Amount Transfer Speed Services Description Online Transfer Fee Rate Amount Received
TorFX International Money Transfers
NZD 2,000
1 day
Online, Phone, Agent
TorFX guarantee to beat any competitor's exchange rate for a transaction. Conditions apply.
CurrencyFair International Money Transfers
1 - 2 days
Special offer: Zero fees on your first 10 transfers.

Get bank-beating exchange rates and fast transfer times on 15+ popular currencies.
The ‘Rate’ and ‘Amount Received’ displayed are indicative rates that have been supplied by each brand or gathered by Finder.

Exchange rates are volatile and change often. As a result, the exchange rate listed on Finder may vary to the actual exchange rate quoted for the brand. Please confirm the actual exchange rate and mention “Finder” before you commit to a brand.

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If you wish to send money overseas, to an individual or a business, you will have to deal with the foreign currency exchange market in some way. Although you will be sending New Zealand dollars, the recipient will receive a different currency.

What is a peer to peer transfer?

The use of peer-to-peer transfer for foreign currency exchange first took place in 1999. The use of this concept in forex trading was revolutionary, as it provided fair and transparent accessibility to foreign currencies.

Peer-to-peer international money transfer companies work by matching individuals and businesses with peers who wish to trade currencies. Participants register with a peer-to-peer transfer platform, then trade currencies with others in the marketplace. The service provider usually charges a flat fee for the exchange.

By using a peer-to-peer transfer company you can send money to any individual or business, or even to your own account in another country.

How does an international peer to peer money transfer work?

The first thing you need to do is register with a peer-to-peer money transfer company. To do this you will need to provide basic information such as your name, contact details and means of identification eg driver’s licence or passport.

You choose the currency you wish to transfer and the country you want to send it to. At this point you will see the exchange rate and the fee you need to pay. Once you accept the offer, the company you are working with makes the transfer.


Nicholas Dawning wants to send some money to his brother in the United Kingdom. While he could use his local bank to transfer the money, upon the suggestion of a co-worker, he decides to compare the rates of peer-to-peer companies. This is what he found.

New Zealand bankPeer-to-peer transfer company
Exchange rate$1 = £0.4425$1 = £0.4552
Transfer fee$40£2.50
Amount received for $1,000£402.50£452.70
Difference of£50.20

It is no surprise that Nicholas chooses to go with the peer-to-peer money transfer company. Not only do they offer him a better exchange rate, it also charges lower fees.

Why do peer to peer transfers look so cheap?

Since peer-to-peer money transfer companies directly match people with foreign exchange requirements, they do away with the need for the ‘spread or margin’ component of the transaction. The technology in use eliminates the need for brokers and middlemen, in addition to the spread imposed by market makers.

It is due to this that users manage to avoid the cost of ‘bid-ask spread’ typically charged by banks and forex brokers, which can vary from 2% to 5%. Peer-to-peer money transfer companies tend to use the midpoint of real-time interbank market rates. These companies normally charge a flat fee for their services, which can vary depending on the amount you wish to transfer.

An additional bonus is this system still uses the same midpoint interbank rate with smaller sized transactions.

How do I compare peer to peer specialist transfer services?

When comparing peer-to-peer specialist money transfer services, several aspects need to be considered.

  • Exchange rate and fees. While the exchange rate is an indication of the deal you are getting, don’t base your decision on this aspect alone. Make sure you find out how much you will have to pay in transfer fees. Bear in mind this may not be the same for major and exotic currencies. Some companies may charge withdrawal fees as well.
  • Reach. Some peer-to-peer money transfer companies offer their services in limited countries in Europe and Australasia. Others have a wider outreach, having a presence in North America and Asia. The number of currencies on offer also serves as an indication of a company’s reach.
  • Payment options. The majority of companies let you make payments through wire transfers and debit cards. There are not many that accept payment through a credit card.
  • Keeping funds in an account. If you wish to keep money in your peer-to-peer money transfer company account, you can find a suitable service provider. Some companies provide their users with eWallets (sometimes called a digital wallet.) This enables you to keep any amount of money, in any currency, for any period of time.
  • Transfer time. The process time for peer-to-peer transfers is usually one to two days. Some service providers charge extra for same-day transfers.

What are the pros and cons to using a specialist service compared to a bank?


  • Save money.This is without doubt the biggest advantage of using a peer-to-peer money transfer company. You may receive a better exchange rate when compared to banks and may also save in fees.
  • Save time. When you use domestic banks to transfer funds to an overseas bank account, you make use of the international banking payment system, SWIFT Peer-to-peer companies bypass this system, so their transfers are made considerably quicker.


  • Limited currencies. Peer-to-peer money transfer companies tend to have fewer currencies on offer, compared to conventional banks and brokers. If you are thinking of sending exotic currency, you will have limited options.
  • Limited services. These companies tend to offer little more than spot rates for currency exchange. A conventional money transfer company also lets you choose between market orders and forward contracts.

Are there any risks?

Exchange rates are subject to fluctuation, so make sure you initiate the transfer as soon after you get a favourable rate. While an appreciation in the currency value can lead to a profitable exchange, the reverse holds true in the event your currency depreciates.

Make sure you deal with a reliable and licensed transfer company, otherwise you put your hard earned money at risk.

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