If you haven’t spent time investigating options for getting the best deal, you’re probably throwing money away. Yet many people simply decide that wading through all the options and trying to work out which one is best for them is simply too hard. Throw in currency brokers offering ‘indicative rates’ and so-called ‘commission-free deals’, which may or may not actually turn out to be good value, and it’s no wonder so many expats don’t bother looking at the alternatives and just stick with their bank. Especially since the rates are all pretty similar anyway. Aren’t they?
Before we answer that, let’s take a look at a new currency exchange alternative: CurrencyFair.
CurrencyFair is completely different from a traditional bank or currency broker. It’s a ‘person to person currency exchange’ –an internet meeting place where currency buyers and sellers come together to negotiate their own rates. The theory of it is the same as other internet-mediated sites like e-bay– that by cutting out the middle man, both buyers and sellers win- which is why customers can get better deals with CurrencyFair than elsewhere – because CurrencyFair doesn’t set the rates, its users do. And they’ll only agree when it’s better than what they get somewhere else.
In practice, it works like this. Sam is an American who lives in Paris. He earns Euro, but needs dollars to pay his mortgage in the States. He deposits Euro from his bank account into his CurrencyFair account, visits the CurrencyFair website, and checks the rates. The best one is from Bettina, a German working in New York,who sends Euro home to her daughter. He doesn’t know any of that, of course. All he sees is that the best rate on CurrencyFair is better than his bank’s or a broker’s, and the transfer fees are lower. And he knows there are no hidden transaction costs – the rate he sees is he rate he will get. He clicks ‘swap’, and it’s done. He can now transfer the dollars from his CurrencyFair account straight to his American bank, and Bettina can send her Euro to her daughter’s account in Germany.
CurrencyFair claims customers like Sam and Bettina will typically beat bank rates by around 2 5 percent, and pay a transfer fee of around €3 instead of €25-30 for an international bank transfer. On an exchange of €1000, that could mean a saving of €50. Multiply that by the amount you exchange in a year, and it’s clear that not all rates are the same. And that you can end up paying a lot more than you have to while exchanging currency.
CurrencyFair was set up by people who are long-term expats themselves. This means that the team actually understands what expats want from a currency exchange service, and is committed to providing it. Reason enough to check out this currency exchange alternative.
More Expat Resources
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