Living and working around the world can be expensive enough with losing a tonne of cash on exchange rates while transfering your money around the globe. Fortunately there are growing number of companies like OFX that can help.
Question here is: Is OFX right for you?
In the interest of full disclosure, we have used OFX for over a decade and they have definitely saved us many thousands of dollars. But we also recommend others we have used.
"Sure the rates and online tools are excellent, but what we think matters most is the service. Where OFX shines is being able to speak to someone no matter where you are in the world or at what time. Generally everything can be done seemlessly online, but when it matters most you can be sure somone is just a call away" Quinn Askeland, Founder of Jobaroo.
Click Here to recieve you first two transfers fee free.
Let's get straight to heart of the matter - when sending money, it is crucial that you get the best deal possible. Bad exchange rates and fees from both the sending and receiving banks can eat into your hard earned cash mean that you won't end up with as much money as you could.
In this article we will take a look at some of your common options, and then review the money transfer service OFX which is the largest money transfer company listed on the Australia Stock Exchange.
Options For Transferring Money
When sending money to Australia you will have a few options. Simple bank to bank transfers are most common, but you could also use, western union, or a money transfer service like OFX.
International bank transfers can be simple but expensive. They can be done online, in store, or on the phone. You will need some information about the receiving bank, such as the bank name and account details, etc. However, bank transfers can be expensive. Depending on your bank and also the type of account you have you will be hit with fees when you send money out, and also, often, when you receive the money at the other end. As well as this, you will often get a weaker exchange rate than you could with other services.
Western Union is a large company that specialises in international transfers. There biggest selling point is that they offer a variety of ways to send money and you can even send cash using this service. This is perfect if you don’t have a bank account in the country you wish to receive money.
Of course, a service (with physical locations) like this doesn’t come cheap and it usually is more expensive than a traditional bank transfer.
Money Transfer Companies
Money transfer companies such as OFX are companies dedicated to sending money overseas. The biggest benefit to this type of company is that you can often get a better exchange rate than at a bank.
As well as this, you have more options when it comes to getting a good exchange rate if you think it is going to move in your favour. This can result in big savings, especially if you are sending a large amount of money.
Often too, because they operate bank accounts in the countries they operate you can avoid the fees your bank charges you.
The downside is that you will generally have to set an account with the company and due to things like identification it can take a bit longer to transfer money than simply using a bank account you already have. That said, once you are set up it is generally easier to transact and you can do so all hours of the day and in the case of OFX 7 days a week.
OFX is a money transfer service with offices in Australia as well as global offices in London, San Francisco, Hong Kong, Toronto, and Auckland.
Having launched in 1998, they have been in business for almost 20 years and according to their website $100bn dollars has been sent using their service. As well as this, 3,250 transfers are made daily.
They offer services in 55 different currencies, and have ties with 115 different banks which means you shouldn’t have a problem with sending money pretty much anywhere in the world.
Safety and security
When sending money abroad, especially if you are dealing in large amounts, it is absolutely crucial that the company has high security standards. Due to the fact that OFX operates in so many countries, it is regulated by:
- Financial Conduct Authority in the UK
- ASIC in Australia
- FinCen in the USA
- FINTRAC in Canada
As well as this, they have numerous standards in place to protect your identity when online and also to protect you from fraud and hacking. As mentioned above, thousands of people use the service on a daily basis without any problem so it seems like security should not be a problem.
Of course, no matter what a site or a company does to protect you, it is always a good idea to take your own steps to protect yourself online. This can include choosing a long, secure password, changing this password regularly, and only using wifi networks that you fully trust.
How does it work?
Sending money with OFX is a fairly simple three step process.
You have to:
- Register with them online. During this process you may have to provide some form of identification if it is your first time sending money with them to verify your account.
- Set up a deal and transfer your fees to them. You can do this by sending money from your bank account, or by using a service like BPay, Poli or EFT.
- They will then send your money to the recipient.
OFX offer what they call the “OFX customer rate”. This is a rate that includes fees, which vary depending on how much and how often you send money, as well as the exchange rate.
When you first go their website, they have a huge exchange rate calculator on the first page. It is worth noting that this is not for the “OFX customer rate”, but in actual fact just tells you the current market rate.
This means that while it can be a good guide, the actual amount you receive will be less and you won’t find this out until you sign up for their service.
However, according to their own research conducted during 2016, using their service will save customers an average of 75% on margins compared to transferring money with a bank. So, as well as potentially getting better exchange rates, OFX also offer more flexibility when it comes to the exchange rates you will get.
Services they offer include:
Live rate monitoring
Setting a rate, sending later
This is a great option if you want to take advantage of the current exchange rate, but don’t want to make the transfer quite yet. You will just send OFX the money at the current exchange rate, and then set the money to transfer anytime in the following twelve months.
Set a target exchange rate
If you don’t like the current exchange rate and think a better one will be reached in the future, you can use this service to send your money once a specific exchange rate is reached.
This is more likely to be used by businesses who want to avoid risk than individual transfers. This service allows you to transfer some time in the future at a certain rate, as long as you pay a premium in advance.
If at the time of your transfer you can get a better exchange rate you don’t need to use the option you bought. If however, the exchange rate moves the other way, you can transfer money using the option you bought. Basically, it covers you against big exchange rate swings that could affect your business negatively.
Another benefit to OFX is the service they provide. They have an excellent web presence, as well as 24 hour phone service during the week whilst the currency markets are open. They also allow you to transfer and manage your transfers on the go using a mobile app.
This service means that not only can you make transfers at any time during the week, but should you have any questions about your transfer you can easily get in touch with them at any time.
Added to the above exchange rate services, and you have a pretty powerful tool for sending money abroad.
OFX currently has a customer rating of 9.1 from 1401 reviews on Trust Pilot and 3.7 from 159 reviews on Product Review. According to these reviews the main pros and cons seem to be as follows.
- No fee on first transfer
- Excellent customer service
- Convenient to use
- Additional checks required when first sending money
- Basically the reviews were mainly positive. The negative reviews mainly related to the additional checks required on first transfer making the process take longer than expected.
- As long as you know that the first time you send money you will have to perform some kind of verification it seems like the chances are you will have a good experience.
If you are looking to transfer money with OFX you will likely have some questions about the process. The second part of this OFX review will try to answer some of the top questions you may have.
As there were a few complaints about the time it takes to verify yourself for your first transfer, we thought that would be a good thing to start with that.
Q: What do you need to verify and how long will it take?
A: You will need two types of identification. One as your photo id and one to verify your address. OFX accept Passports, driving licences, utility bills and more.
In terms of how long verification will take, this will depend. In most cases this will be done electronically and won’t take long. However, they do say that in certain cases they will require a physical document, if this is the case you will usually be verified within a few business days.
Q: What fee will I pay on my transfer?
A: There is a AUD 15 transfer fee f you are transferring under AUD 10,000. If you transfer over AUD 10,000 there won’t be any OFX fees at all. Depending on the receiving bank, you may also be charged a fee when you receive your money, although this will be from your bank, not from OFX.
It is also worth noting that OFX also have a minimum transfer amount of AUD 250.
Q: How long will the transfer take and how can I track the transfer?
A: This will depend on the currency. For most currencies it will usually take between 1-2 days from the moment that OFX receive your money. They even claim that money sent between Australia and the US can often be done on the same day.
As OFX is open outside of normal business hours, they can transfer money at times when banks cannot.
In terms of tracking your transfer, OFX will keep you updated via email or SMS. As well as this, you can track your transfer online or using the OFX mobile app.
Q: Safety is of course of the utmost concern when sending money. How safe is OFX?
A: The problem with sending money is that once its gone, its gone. Getting the money back can be very hard and unless they agree send it back to you, will likely involve a legal process.
As such, when sending money, make sure that you completely trust the person you are sending money to. Also make sure that you have their correct details.
While they can’t account for things like this, OFX claim to be as safe as a bank and they have their own fraud prevention team.
When it comes to sending money abroad, you have a number of options. OFX is an internationally renowned company and as long as you don’t mind going through the verification process you will likely be able to save money when compared to bank to bank transfers. This is especially the case if you are dealing with higher amounts of money.