Frequent travelers often cast a blind eye to credit card exchange rates. Recently, though, I reviewed a bank statement with care to learn just how bad the bank exchange rates were. The answer, of course, is really bad.
The worst part of the exercise was over. Now that I understood how much money banks were making on my out of country purchases and global money transferneeds, I could fix it. I comparison shopped a bit and signed up for a service called CurrencyFair.
Here are some of the benefits of using CurrencyFair while traveling:
- CurrencyFair isn’t a money-changer. Stop there if your eyes are already glazing over. The firm pairs users of the service and a direct market exchange happens between them. For example, if I want to exchange euros to pounds and you want to exchange pounds to euros, we agree to trade. There’s no dealer bid and asked “spread” to contend with, and we both save money.
- The first time I used CurrencyFair, I saw the rate was so much better than the one quoted on any of my forex apps that I jumped in. In a £2,000 transaction, I saved more than £50 pounds.
- The CurrencyFair“peer-to-peer” market for forex is what happens when two transactions are paired. There were offers to buy and sell currencies. To be honest, not all buyers and sellers lined up so neatly as my transaction. I believe that some want to purchase at a discount or sell at a premium. My goal was to exchange currency quickly, and the system worked well for me that is my review of CurrencyFair.
- CurrencyFair is easy to use. I deposited funds first and, after my exchange partner and I agreed, the transaction was completed in both our accounts.
- CurrencyFair rates are so much better than those of forex dealers and banks. Some forex firms charge money any time the client crosses borders. In comparison, CurrencyFair says its cut of the deal is a mere 0.15 percent of the transaction value plus a tiny surcharge. In comparison, CurrencyFair charges a fraction of the typical bank fee.
- CurrencyFair is an entrant in a super-competitive space, so they have to cut transaction costs to the bone while giving the customer great service. (I called once after 10:00 p.m. local time. There was no wait time, and my question was immediately answered. I read that the cross-border money transference industry is about USD 500 billion worldwide and that firms like Western Union have a greater than 20 percent operating margin!) I love that.
- There are other relatively new competitors in the peer exchange market, but none are as inexpensive to use as CurrencyFair. CurrencyFair has facilitated more than 2 billion euros in transactions in the past five years—and saved users more than 100 million in doing so. What a phenomenal growth rate.
- CurrencyFair allows me to exchange money into any currency I need, with the exception of the USD. The firm doesn’t provide cash payments because it’s primarily used by people like me with a bank account in the country I’m visiting. I frequently worked outside of the U.S. and received payments in other currencies. In the past, I used popular money transfer services and paid the “cost of doing business” but now I don’t have to.
- CurrencyFair means I don’t need to carry a lot of cash. I notice that most people carry less and less currency these days, since it’s possible to use a card or mobile to complete any transaction in seconds. If I’m traveling on vacation, CurrencyFair is really so convenient.
- CurrencyFair has a quirky sense of humor. Their rough and tumble “Currency Fairy” commercial is a French rugby player in a little girl’s Halloween costume.
Now I use CurrencyFair to book hotels or send money to friends abroad when I’m traveling. One of my friends got very excited when I mentioned how much money I save on exchanging currency. That’s just one reason to use CurrencyFair.
The world’s financial institutions grow larger and larger every year. CurrencyFair is helping people save money per transaction. For people who travel a lot, that small savings adds up to thousands a year.