Both CurrencyFair and TransferWise are good companies that can save you a lot of money when making international money transfers. If you are reading this article, you already know that and you simply want to make up your mind and start using the better of the two. Having so many similarities makes it pretty hard to differentiate between them because:
- Both provide incredible savings when compared to your local banks.
- Both are using the peer-to-peer money transfer system.
- Both companies are primarily online focused, with complete registration via an online form.
- Both have very low minimum transfer limits.
- Both companies have around the same costs.
- Both services have about the same reach and apply for the same audiences.
Article Summary – Who is the Winner:
Although both are excellent choices for money transfers, we lean towards Currencyfair for the following reasons:
- Slightly cheaper rates.
- Better known, more credible.
- More positive reviews online.
- More supported countries and currencies.
If you get more in-depth information about one of the companies use the following reviews: CurrencyFair review and Transferwise review.
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1) Safety – Which company is safer to use
Being financial institutions, they are regulated by the Financial Conduct Authority (TransferWise) and the Central Bank of Ireland (CurrencyFair). The FCA is a financial regulatory body that operates independently of the UK government, and is financed by charging fees to members of the financial services industry. The Central Bank of Ireland gives the approval under the European Communities (Payments Services) Regulations 2009.
In addition, these companies have both won prizes and/or have received a spot on the podium in many events organized by the financial industry. Each has received a lot of media attention, so you can easily read about their achievements.
But the most important fact is that both companies have several investors who are constantly infusing new capital to make sure that development continues.
So stop asking yourself if CurrencyFair is safe or if TransferWise is a scam. They are legit businesses.
- Total Equity Funding – $116.37M in 6 Rounds from 10 Investors.
- Most Recent Funding – $26M Series D on May 25, 2016.
- Total Equity Funding – $24.43M in 9 Rounds from 4 Investors.
- Most Recent Funding – $8.98M Venture on March 23, 2016.
*Data provided by Crunchbase.com
2) Supported Countries
In the tables bellow, we have listed all countries to where these two companies can send money.
Total number of countries supported by TransferWise: 55
Total number of countries supported by CurrencyFair: 157
ANTIGUA AND BARBUDA
CONGO, REPUBLIC OF
ISLE OF MAN
SAINT KITTS AND NEVIS
SAINT PIERRE AND MIQUELON
SAINT VINCENT AND THE GRENADINES
SVALBARD AND JAN MAYEN
TRINIDAD AND TOBAGO
TURKS AND CAICOS ISLANDS
UNITED ARAB EMIRATES
WALLIS AND FUTUNA
3) Mobile Apps
A company focused on money transfers and remittances in general, can’t go a long way without a mobile app. This is simply because most people in the African countries have access to a smartphone, but not practically to a computer or laptop. The companies are likely keeping prices high to recoup their investments or simply because of a lack of competition.
But mobile phone companies have understood that there are many people needing cheap internet access, and the mobile phone companies are determined to take a big chunk of the market for them. With the power of multinational companies and with the know-how of mastering the large-customer-base-low-margins business, the mobile phone companies are the only ones benefiting right now. And they will do that until the traditional internet service providers start re-thinking their business model.
Luckily, both TransferWise and CurrencyFair have very easy to use and optimized mobile apps on both major mobile operating systems:
TransferWise: iOS and Android
CurrencyFair: iOS and Android
4) Currency Exchange Rates
For starters, both companies are trying to match the mid-market rate as closely as possible. So right off the bat you will get a better exchange rate than any bank could ever offer you.
If we look at the calculators on their websites, we can see that edge is taken by a different company depending on the currencies that you need to work with. The first example I will showcase here is for sending 1000 EUR and receiving USD:
As we can see from the photos above you get $3 more from TransferWise. But what happens when we try to send USD and receive EUR:
In this case we can see CurrencyFair offers almost 2 euros more than what TransferWise provides.
Here are some real live rate comparisons between the two firms in addition to 2 more companies for the sake of comparison:
Conclusion – Depending on the currencies and the amounts you want to send, you might choose one or the other. Currencyfair usually has the upper hand on this, but not necessarily. So be sure to check with each before making the transfer. But if the amount is low (under $500), I don’t think it makes a big difference which one you choose.
Note: Currencyfair also offers a marketplace functionality. That means that in theory if your transfer is matched it can be much cheaper.
Probably the part of the article that will get the most attention is this chapter – the cost of sending money with CurrencyFair vs TransferWise. So it should be, considering most people using these companies are using them for remittances, and every dollar means a lot. So let’s get into it.
- CurrencyFair has a transfer fee (on average) of only 0.35% of the total amount* + a fixed €3 transfer fee;
- TransferWise has an average transfer fee of 1%** of the total for amounts over 400 pounds or a fixed transfer fee of £2 if you send under £400.
Market place functions:
Although both platforms call themselves “peer to peer” – with CurrencyFair you can actually find cheaper rates if you find a match to your transfer, while Transferwise’s fees are set – it doesn’t matter whether they manage to match the transfer or not, you will pay the 0.5% – 1.5% exchange rate spread (fee).
* CurrencyFair charges 0.15% of the total amount exchanged when customers match each other. When there are no customers providing a competitive rate for your exchange, CurrencyFair will step in and match with you. This results in a charge of 0.4% to 0.5% of the amount exchanged. The average will end up to 0.35%.
**TransferWise’s pricing structure depends on the currency to which you want to exchange and can vary from 0.5% for most of the big currencies like GBP, USD, EUR etc, and going as high as 3% for the Ukrainian Hryvnia. Its fee for the Indian Rupee is 0.7%, for example, so things change a lot depending on the currency. So be sure to check out its pricing structure here before making a transfer.
Concluding Words: Our Winner
Both companies are good and are a way better option that using your local bank for international money transfers. But if you really want to pick a winner that would have to be CurrencyFair because they have smaller fees and a larger reach.