Whether you’re sending money to Australia or receiving money in Australia, the chances are you’ll need to exchange one currency to another. The biggest mistake surrounding this reality is the dependence that many of us have on banks.
When using a bank to exchange currency (i.e. transferring money from Australia to UK through an AUD to GBP transfer), you will be on the wrong end of a 5% currency spread, meaning you could receive up to 4-5% less value than if you used an alternative provider. On a $10,000 transfer that’s a $400 – $500 saving you could make. On top of this, you may be charged a flat fee by the bank (some banks charge >$30 for a foreign transfer).
The amount of money down the drain is staggering, and it happens to thousands of migrants, businesses and individuals who have a requirement to send money overseas.
You can avoid this almost entirely by using money transfer companies who, unlike banks, specialise in international transfers. They take either no or very low fees as well as providing a very fair currency rate (often just a fraction off the interbank rate where banks trade currencies with each other).
Two very strong choices for sending money to/from Australia is OFX and Wise. Let’s take a look at OFX vs Wise, and ultimately, decide which one is better.
First and foremost, there is little to differentiate OFX vs Wise in this area as both companies are of the highest credibility. Whilst OFX has an extra 12 years of licensed experience over Wise having been founded in 1998, Wise makes up for this in pure stature, reviews and market presence. Both offer the utmost professionalism, with very strong customer service departments.
The key similarity, which is why they both feature in this article, is their overwhelming superiority over banks when it comes to online money transfers. It is almost certain that either provider will leave you with more cash at the end of the transfer which is the main thing, whilst equally pensuring your money arrives safely and securely. Both companies are FCA and ASIC licensed, and incorporate bank-level encryption for their online trading platforms. Fraud prevention and identity protection is of paramount importance and 2-factor authentication adds increased security.
OFX really excels in its customer service, with a dedicated account manager provided to each client. Because of the larger choice of foreign exchange solutions (i.e. hedging possibilities), OFX offers a more personalised service where account managers take the time to understand every client’s needs and build a suitable hedging strategy that’s in accordance to their individual situation and risk appetite. They have a local account management team in all major territories in which they operate (UK/US/Canada/Australia) and leverage their truly international footprint by offering 24/7 customer service. If you need to get in touch with OFX outside of your usual trading hours you’ll be temporarily diverted to an international office to pick up any urgent queries.
Wise, on the other hand, really pushes an independent, fast, automated service through either the online platform or app. Customer support can be contacted through the app or over the phone, however the customer support is designed to help with troubleshooting queries when registering for an account or trading through the online platform. Trades cannot be placed over the phone and the team does not provide guidance on the FX markets and how best to hedge against currency risk. On top of all of this, there are some online reviews which report a poor experience with Wise’s customer service..
All in all, if we compare OFX vs Wise on service, when it comes to being a currency expert and offering bespoke account management OFX wins.
When using a money transfer company, global reach is important because of the nature of currency transfers being international. Here, OFX wins again in relation to sending money to and from Australia.
On top of their Sydney office, OFX has offices close by in New Zealand and Singapore, which if nothing else, suggests a more Australasian and Asian focus. Compare this to Wise, which has offices in neither of these places, and it seems that OFX may have Australia more in mind when it comes to its product and service design along with customer relations.
Wise typically charges around 0.5% for transfers..However, this is charged as a flat fee and not a currency spread (technically). Wise uses the mid-market rate and applies that fee on top. It means that even though customers are still charged a percentage of the overall transfer, the fee is transparent and not hidden behind an FX rate which involves the customer having to calculate the spread themselves.
OFX, on the other hand, does have an FX spread of around 1.5%. However, this can be reduced as the transfer value gets larger.
So overall, and forgetting spread and fee differences – in our OFX vs Wise comparison, the total loss of currency at the end of the transaction seems to be twice as cheap when using Wise. Wise is a little more reliable because you know what you’re getting (written down explicitly regarding which country you’re pertaining to). It’s thus easier to predict.
However, it’s possible that large transfers may become cheaper with OFX – but this is something you have to take on a case-by-case basis.
Although both are reliable and reputable companies, you cannot deny the greater 20-year history that OFX has. Wise is still considered as one of the hottest fintechs to hit the market this century, and whilst it’s scary to think how successful they have become, OFX is no doubt the more reputable company. OFX wins the OFX vs Wise comparison when it comes to experience. It’s worth pointing out both firms are publicly traded – Wise listed on the London Stock Exchange and OFX listed on the Sydney Stock Exchange.
Our OFX vs Wise analysis shows that both firms have their own strengths and weaknesses. If you’re seeking a slick, online offering then Wise will be the best bet. . If you’re looking for the overall best money transfer company, one that is more approachable, helpful, bespoke level of service and/or wants to deal in high amounts of cash, then the more established OFX is the answer.
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