OFX vs. TransferWise
TransferWise is a cross-border money transfer service that provides a convenient way to move money between countries and currencies.
However, we’ve found OFX to be a far superior option to TransferWise, thanks to better customer support and lower fees, all at very similar transfer speeds. OFX is the best cross-border money transfer service for most people.
Who Are OFX & TransferWise?
OFX and TransferWise are international money transfer services that enable users to exchange currencies and send money across borders for a nominal fee.
This post will compare every aspect of these two services to give you a clear understanding of which of them is better for you.
Who Uses OFX & TransferWise?
Here are the four most common use cases OFX and TransferWise users find themselves in (of course, there are many, many more):
- You receive an income from abroad and need to keep a bank account in the country you’re receiving the income from. Rather than keep your funds in that account, you prefer to have them all in your main bank account, so you use OFX or TransferWise to send a transfer to yourself. (See Case Study #2 below to see how Hana uses OFX to save 60% on her transfer fees in this exact scenario).
- You have an N26 account so that you can withdraw cash from any ATM in the world for free, but you need to add money into that account, so you use OFX or TransferWise to send a transfer to yourself.
- You have family or friends living abroad (or you live abroad and you have family and friends living in your home country) and you plan to transfer money to them.
- You’re making an international investment and don’t want to get hammered by an unknown exchange rate that the receiving bank will apply to your funds.
These are just a few of the common use cases for OFX and TransferWise , but they give a fairly good idea of how frequently OFX and TransferWise can save you money if you deal with foreign currencies.
OFX vs. TransferWise: Features
|Fees||0.2% – 1.0%||0.4% – 2.0%|
|Transfer Options||Bank account||Bank account|
|Customer Support Options||Phone: +44 207 614 4194 (UK)|
|Phone: 1 (888) 908-3833)|
|Transfer Speeds||2-3 business days||2-4 business days|
|Forward Exchange Contracts||Yes||No|
|Sign up for OFX||Sign up for TransferWise|
OFX has a couple of convenient, cost-saving features that TransferWise can’t match. First, it’s available in many more countries and currencies, which gives you the flexibility to transfer funds to nearly every country in the world. OFX also offers forward exchange contracts, allowing you to lock in a favorable exchange rate at which to exchange your funds some time in the next 12 months. This is extremely advantageous for anyone buying a home or making a large investment abroad, as well as business owners who want to hedge against currency fluctuations.
The one edge TransferWise has over OFX is that it allows you to deposit funds via credit card, though TransferWise does charge an additional fee for that service.
OFX vs. TransferWise: Fees
OFX and TransferWise both make their money on a small markup from the midmarket exchange rate, which generally falls in the range of 0.2% – 1.0%. The exact rate you get changes by the second, since the midmarket exchange rate itself changes by the second, so there’s no way to give an exact number here. You can see how much you’ll get for your transfer instantly on the OFX website.
Since the fees cross-border money transfer services charge are tied to things like the midmarket exchange rate, it’s difficult to compare them across the board. Instead, here’s a look at the fees OFX and TransferWise charge on a variety of common money transfers. All fees were taken directly from each company’s website on March 5, 2019.
|$1,000 USD to EUR||0.41%||1.05%|
|$1,000 CAD to EUR||0.44%||1.12%|
|$1,000 USD to GBP||0.44%||1.01%|
|$1,000 CAD to GBP||0.44%||1.10%|
|€1,000 EUR to USD||0.46%||0.46%|
|€1,000 EUR to CAD||0.47%||0.50%|
As the chart above shows, and as you’ll see in the two case studies below, OFX’s fees are regularly quite a bit less than TransferWise’s. This doesn’t mean they’re always lower—no cross-border money transfer service can claim to have the lowest fees all of the time—but if you compare OFX with TransferWise or any other cross-border money transfer service, you’ll quickly see that OFX offers the lowest fees in the industry on most transfers.
This map shows where OFX (orange) and TransferWise (blue) have lower fees on a $500 USD transfer coming from the United States. It’s worth noting that most of the TransferWise (blue) countries were won by default, since OFX doesn’t deal with the local currency (for example, the Bulgarian lev and the Ukrainian hryvnia), while none of the OFX (orange) countries were won by default. Grey countries (eg. Serbia) are where neither TransferWise nor OFX operate in the local currency, or countries that are outside of Europe.
If you work remotely for an American company, this map clearly shows which of OFX or TransferWise is the better money transfer service for you.
Let’s look at two distinct case studies to get a clearer picture of how these fees shake out.
Fees Case Study #1: Moving Abroad
Sebastián is a CFD trader who recently moved from Barcelona to Dubai.
He wanted to transfer all of his money from Euros to Emirati dirhams, but he wasn’t sure what was the best way to do it. So he did his research, looked around on the Internet, and discovered that OFX was by far his best option. After looking at some recent data, I’m not surprised.
This table shows the fees Sebastián would’ve had to pay to transfer each of €500, €5,000 and €50,000 from Euros to Emirati dirhams. All the calculations were done on February 28, 2019:
|€500 EUR to AED||€5,000 EUR to AED||€50,000 EUR to AED|
On a €500 transfer, the OFX fee is about ⅓ of the TransferWise fee.
On a €5,000 transfer, it’s about half.
And on a €50,000 transfer, it’s still about half, which means Sebastián is saving a full €195.
OFX wins every time!
This doesn’t mean that OFX is always cheaper. But over the last two dozen or so transfers I’ve made, they’ve been better nearly every time. So for me, OFX is a no-brainer at this point. And it is for Hana, too.
Fees Case Study #2: Working Remotely
Hana works remotely for an American tech startup. Her salary is $50,000 per year, which works out to $1,000 per week after 2 weeks of annual vacation. So every Friday when Hana gets paid, she transfers $1,000 from her US bank account to her Euro-based bank account.
Hana used to do that weekly transfer with TransferWise, whose fee works out to about 1.05% on a $1,000 transfer, or $10.50. But it bothered her that more than 1% of her salary—about $500 every year—was being eaten up by transfer fees.
She works hard for her salary, and losing 1% of it before she even touched it seemed unfair. But she didn’t know what else to do. She felt handcuffed, and more importantly, taken advantage of.
Then she started using OFX.
OFX’s fee on that same, weekly $1,000 transfer works out to about 0.45%, or $4.50. You might think the difference is trivial, but it isn’t to Hana.
Weekly Transfer Fee Paid On Hana’s $1,000 Salary
|$4.50 (0.45%)||$10.50 (1.05%)|
For Hana, switching from TransferWise to OFX for her weekly transfers has saved her $300 per year, or 60% of the transfer fees.
What’s more, Hana uses OFX’s recurring transfers feature so that she never has to think about transferring money at all.
OFX automatically transfers $1,000 from her US dollar account every Friday, and it arrives in her Euro account by Monday. Moving money used to be a point of stress for Hana. Now it’s completely off her radar.
OFX vs. TransferWise: Speed
TransferWise advertises that most of its transfers take 1-2 business days, but this is only once your transfer balance has reached their accounts. Put another way, this estimate from TransferWise doesn’t include the necessary 1-3 days it takes for your bank to get the money to them, which means that the “real” transfer time is several days longer. I looked back on my own TransferWise transfers over the past ~3 years and discovered that my average transfer with them took 3.6 business days from start to finish. This was in a variety of amounts and to/from a variety of different currencies, with US dollars and Canadian dollars to Euros being the most common.
OFX takes an average of about 3 business days from start to finish as well, making the two services relatively even when it comes to speed.
OFX vs. TransferWise: Customer Support
Both TransferWise and OFX have smart, capable customer support agents that treat you like a human being, not someone at the other end of a customer service script. They’re both creative and helpful in solving problems, and most of my experiences with both of them have been positive. Yet there’s one big difference I’ve noticed between them: OFX’s customer support is proactive while TransferWise’s customer support is reactive.
What this means is that when your transfers run into problems, as they inevitably will, OFX will have a real person call or email you to solve it as soon as it comes up. This keeps your transfer moving on schedule, and ensures you’re never left in the dark. TransferWise, on the other hand, waits for one of their automatic checks to detect the problem, which can take days after the problem has come up. Once you’re notified of the problem with an automated email, you either have to solve the issue on your own or call TransferWise to ask for help. After doing this once or twice, it becomes crystal clear how much better OFX’s proactive model is.
The One Scenario When You Should Use TransferWise
OFX does really well on the big currencies: Euros, US dollars, British pounds, Canadian dollars, Swiss francs, Australian dollars, etc. And for many of us, those are the currencies we deal with the most, anyway. But for the smaller, less popular currencies of the world—those like the Bulgarian lev and the Indonesian rupiah—OFX’s fees jump up quite a bit. So if you find yourself transferring money to a smaller currency and OFX’s fee comes in at more than 1%, that’s the one scenario when we recommend using TransferWise.
You can sign up with TransferWise for free here.
OFX is the best online money transfer service for most people. It offers fast transfers with the industry’s lowest fees, and backs it all up with a customer support team that solves problems before you even know they’ve come up.
Whether you’re a frequent traveler, a remote worker, a digital nomad, or simply moving to a new country, we highly recommend OFX.
FAQs About OFX & TransferWise
Can I Use OFX With PayPal?
Currently, OFX only works with real bank accounts, so you can’t send an international money transfer using OFX from your PayPal account. However, it’s very easy to transfer funds from your PayPal account to a bank account that you already own, and from there you can transfer them using OFX. The OFX Global Currency account (see below) is how many people connect PayPal with OFX.
What Is The OFX Global Currency Account?
The OFX Global Currency account instantly opens accounts for you in a variety of currencies—including EUR, GBP, USD, HKD, AUD and CAD—which allows you to accept payments in countries around the world without incurring any exchange fees. You can also pay suppliers and other expenses directly from those accounts, saving you exchange fees on outgoing payments as well. It’s seamless, highly secure, and simplifies your business or international lifestyle in a serious way. Here’s an explainer video with more information, or you can sign up for the OFX Global Currency account here.
Can I Use OFX For My Business?
Absolutely. While most of this review has focused on OFX for individuals, thousands of businesses use OFX every month to save on currency exchange fees and lock in favorable exchange rates.
For example, EJ is a manufacturer based in Australia, which has both suppliers and customers around the world. EJ processes both its inbound and outbound foreign currency transactions with OFX, and saves about $5,000 per month in the process. Here’s a video with more information:
What Currencies Does TransferWise Support?
TransferWise supports money transfers between the following currencies:
Euro (EUR), British Pound (GBP), US Dollar (USD), Australian Dollar (AUD), Swiss Franc (CHF), Canadian Dollar (CAD), Polish Zloty (PLN), Swedish Krona (SEK), Norwegian Krone (NOK), Danish Krone (DKK), Hungarian Forint (HUF), Czech Koruna (CZK), Bulgarian Lev (BGN), Romanian Leu (ROL), New Zealand Dollar (NZD), Brazilian Real (BRL), Singapore Dollar (SGD), Japanese Yen (JPY), South African Rand (ZAR, SWIFT only).
You can also send a TransferWise money transfer to these currencies (but not starting from these currencies):
Indian rupee (INR), Hong Kong Dollar (HKD), Malaysian Ringgit (MYR), Philippine Peso (PHP), Pakistani Rupee (PKR), Moroccan Dirham (MAD), Thai Baht (THB), Emirati Dirham (AED), Ukranian Hryvna (UAH), Indonesian Rupiah (IDR), Colombian Peso (COP), Georgian Lari (GEL), Turkish Lira (TRY), Mexican Peso (MXN), Russian Rouble (RUB), South Korean Won (KRW), Chinese Yuan (CNY), Sri Lankan Rupee (LKR), Bangladeshi Taka (BDT), Vietnamese Dong (VND).
TransferWise adds new currency options regularly, so you can expect transfers from these currencies to all other supported currencies, as well as additional supported currencies, soon.
TransferWise vs. PayPal
PayPal is about 2.5-3.0% more expensive than TransferWise (As we showed in Scenario 1 above), and it’s not as secure. A simple Google search will uncover thousands of PayPal transfers gone wrong, mainly because PayPal tries to enforce a very strict Buyer’ Insurance on sites like eBay. That’s great if you’re paying someone you don’t know and you want to be protected, but it also means that PayPal can reach into your account and take your money, then freeze your account and leave you with few options to get it back. This happened to me once before and unfreezing my account and getting my money back took over a month, plus a lot of time spent on hold with PayPal’s customer support team. So given that it’s significantly cheaper, easier and more secure, I recommend TransferWise.
Is TransferWise Safe To Use?
This one’s pretty much the most important question. Short answer: yes, it’s extremely safe. Long answer: TransferWise is fully authorised by the UK’s Financial Conduct Authority (FCA). This means that the business is subject to European rules (the Payment Services Directive) designed to protect customers who use payment services. As part of these rules to protect customers, TransferWise have to keep customers’ funds separate from their own. They also have to demonstrate that they’re financially healthy and that they have strict anti-money laundering procedures in place.
How Did TransferWise Start? A History
Like many burgeoning technology companies, TransferWise was created because of a genuine frustration at the status quo and the desire to place agency back in the hands of the consumer.
TransferWise was founded in London in 2011 by Taavet Hinrikus and Kristo Käärmann. The two friends were being paid in currencies different to what they needed for living expenses, so they decided to set up an informal system between themselves to exchange money at the current market rate. In essence, they were the world’s smallest currency exchange arrangement, and all things considered, it worked well.
But they knew that they weren’t the only ones experiencing such currency woes, so they set out to change the way the world exchanges money. Just a few years later, they’re doing just that. Today, TransferWise customers send over £1 billion each month using the service, and they aren’t showing any signs of slowing down.