A peer-to-peer money transfer uses a website or app to transfer funds from one person to another over the internet or mobile networks. For international payments, peer-to-peer will match buyers and sellers of different currencies to deliver a competitive exchange rate.
Peer-to-peer (P2P) is a good way to save on the excessively high exchange rates margins charged by banks for international money transfers. Banks often charge 5%, while P2P services usually charge a commission of 0.5 to 1.5%. But there are substantial drawbacks to the P2P model.
At OFX, we focus on making it easy and affordable to transfer money for business or pleasure, and we even provide support to online sellers. Choose the money transfer provider who can adapt to your unique needs.
When you transfer money with OFX, every transaction will be swift and secure, and you can reach us by phone 24/7 if you need to. When it comes to international money transfers, you’ve already got a friend in the business: OFX.
Wire transfers are an electronic method of sending money from one party to another. It’s one of the most efficient ways to transfer money overseas, because a wire transfer is a bank to bank transfer. When speed is crucial, a wire transfer is a good option.
However, all wire transfer providers are not created equal. Now that you know what a wire transfer is, the next question is ‘how much is it going to cost me?’
Did you know that banks often take a margin of 5% over the daily exchange rate when they send your money overseas? That means on a wire transfer of $10,000 you could be paying up to $500 in addition to hefty ‘international transaction’ fees. At OFX, we think that’s too much.
When you send money with OFX, you’ll get the great rates and service you deserve. Our efficient online platform delivers your funds to most major destinations within one business day of OFX receiving your funds. Plus, it’s free to register with OFX.
You may be aware of other wire transfer providers, but most of the big-name money transfer providers charge similar margins to the banks. To check if you’re getting a decent rate from your money transfer service, just google the daily exchange rate for your currency pair. This will give you the benchmark price for the day. Remember, even a 1-2% difference in the rate can add up to hundreds of dollars in your pocket depending on the size of your transfer. OFX is simply smarter, because you get the savings, speed, and service you need.
So what is a wire transfer? It’s a good way for savvy people to save some money with OFX.
A Forward Contract is an arrangement that allows you to transfer money at some time (up to 12 months) in the future at an exchange rate that you agree to now, so that you know what the exchange rate will be at the time the transaction takes place. This allows you to avoid the risks and uncertainties associated with adverse exchange rate movements.
A Forward Contract may be beneficial for business and individuals if exchange rates are particularly attractive now, and you want to lock in that rate to hedge against uncertainty in the future. This can be especially helpful for small businesses who want to keep their cash flows predictable when buying or selling overseas.
However, a Forward Contract precludes you from taking advantage of further beneficial movements, if your currency pair continues to move in a profitable way. To avoid missing out on further profitable movements, some people use a Forward Contract for a smaller portion of their total payment (say 50%) as a way to hedge against volatility.
OFX offers a number of alternatives that help you manage your business and personal foreign exchange risk.
Talk to one of our dedicated dealers today to develop a currency strategy that’s right for you.