The power of peer-to-peer money transfers makes foreign exchange deals cheaper for many people – from engaged couples to students studying abroad
Whenever you want to make an international transfer, every single penny counts. And in a case where you need to transfer large amounts (such as payments to buy a property abroad or destination weddings), these pennies would add up to the cost much higher.
According to a study, almost one in five transfers sent overseas by Britons involves a four-figure sum or higher. Therefore, it is very important to watch out for poor exchange rates and fixed fees to minimise the cost of the transaction as much as you can.
When Kirsten Connell saw her perfect engagement ring on a trip to the USA, the worry for her fiancé Darrel was how they would pay for it.
After all, transferring the large sum of money needed to buy the ring at the rates offered by traditional foreign transfer services would mean that the ring would cost even more.
But Kirsten knew of Wise (ex TransferWise), an online foreign exchange service that makes sending money abroad cheaper.
Co-owned by Taavet Hinrikus, who was the first employee at Skype, TransferWise uses a peer-to-peer model to make currency exchange cheaper.
Mr Hinrikus, along with partner Kristo Käärmann, had the idea for the service when they had to transfer money between the UK and their native Estonia, and were stung by terrible exchange rates.
Traditional services often make large profits this way, but by using peer-to-peer services and harnessing the power of each user’s bank account – and its home currency – TransferWise can give users access to the mid-market exchange rate, while being a secure and fully FCA-authorised platform.
Kirsten and Darrel were so impressed by the savings they made paying for the engagement ring that they decided to use the service to pay for every service involved in their wedding in Tuscany.
“There was so much to pay for – the church admin, catering and flowers – so it was fantastic to be able to save on the cost of exchanging the money,” says Kirsten.
“We saved about £1,500 and also had a dashboard on the website showing everything we had spent and the exchange rate we got.”
As well as being useful for those travelling abroad to make large purchases, expats and exchange students have also found that the service offers a brilliant way to manage money in different countries without losing its value.
Rebecca Pennar, 23, is a law graduate from Exeter University. In her final year, she studied EU legislation in France and worked there during the summer to improve her French.
Making ends meet as a student was difficult and hidden exchange rates slashed the money her parents sent over to help her get by during her studies, but TransferWise saved her more than £200 over the summer months.
