PeerFX showed off its quick and easy currency exchange application at Launch Party in downtown Vancouver on Thursday night. From what I saw with my own eyes and from what I've heard from the LPV5 crowd, this one is definitely a winner.
I hate losing money when I'm changing money. It just seems unfair. And I'm not looking forward to the prospect of losing a percentage when I head off on a short vacation abroad soon. So PeerFX immediately grabbed my attention, because they're going to save me money.
After just a two-minute demonstration to show how it worked, I know that this is something that tens of millions of people can benefit right now.
They're not promising completely free currency conversion, but it's certainly better than what the bank will give you. They actually give you the Interbank rate (During this current test phase, the charge is $3.50 per transaction, but that will change to 0.35 per cent per transaction - way better than the 2 per cent the banks charge you). In other words, you can change your money at the same rate that the banks exchange currencies to each other, instead of paying transaction fees like a retail-converting chump.
How do they do it? They've posted their secret sauce for all to see:
Our patent-pending peer-to-peer process allows us to give you significant savings on every transaction. By bringing peers together and converting currency on a pooled basis, we eliminate the bid-ask spread that you pay when you go to a bank, foreign currency booth or use a credit card to get currency.
And a simple three-step process gets you your money converted in minutes. Why would I ever go back to a bank if PeerFX can give me a lower rate every time? So I'm changing my habit. It just makes cents.
PeerFX is an online peer-to-peer currency exchange. By bringing people together to exchange with each other instead of through the banks, we... [more]
What they don't tell you though is that their rate doesn't include the wire transfer fee which makes it actually end up costing more than changing money at a bank would. Aside from this any half decent credit card will convert money at a much better rate anyway, with no fees.
Actually, I already mentioned the transfer fee of $3.50, which I'm told will be phased out when the service goes out of the testing stage. Also, please name one credit card on this planet that converts currency at 0.35 per cent or less with no fees. I'd love to know what "half-decent" card that is you're talking about. Cheers.
In response to Bob's post, the way to send funds to PeerFX is via EFT, which for some banks would be at no-cost for the customer or up to a max of $1.50. As for credit cards, if you were to use it abroad, the conversion fees are around 3%. It's very hard to find the rates they charge as they don't make it visible on the credit card websites. I hope this helps and would love to hear more if you have further comments/suggestions. Cheers.
Well ok, maybe we are exaggerating a bit about giving a better rate than credit cards. We though are able to provide a long wait period until you receive your money, can a credit card give you that?
Actually I just checked with Visa because I was curious about this.
With my card the conversion would be $500 CAD to $480 USD, end of story with no additional fees or any wait time. According to peerfx.com, using them for this same transaction would convert $500 CAD to $472.87 USD and also includes a 1 to 5 business day wait period.
So using a credit card would actually save me $7.13, the hassle of having to make a wire transfer, a waiting period and the transaction is secure and insured.
Also Johnathan the fees I'm talking about are the wire transfer fees.
Peerfx basically acts as an escrow service between two people trading money. Despite what peerfx says, almost all banks only offer free wire transfers between their own branches within the same country. As a standard it usually costs $5 to receive a wire transfer and about $10 to $15 to send one (go ask at your bank if you don't believe me).
So each person involved has to make a trip to the bank, pay $10+ to send the money, wait 1 to 5 business days, go back and pay another $5 to receive it.
I don't know about you, but those 2 trips and the wait time are worth more to me than any money I might save.
I was interested in this because I travel a lot and thought it might make things easier and/or cheaper. Having looked into it though, all peerfx offers is a way to transfer funds that is just a hassle, and actually costs more than what I was doing.
Just pay for your hotel with your credit card, ask the front desk to charge an extra $500 to your card and you have instant currency with no fees and the best conversion rate you will get anywhere.
Also Johnathon if you're going to report on something please get it right, especially before telling someone commenting on it they don't know what they're saying. As when I initially mentioned fees it refered to the cost of the wire transfers, which you apparently did not even know was the means of sending/receiving the money.
This is a response to the post made by another user that also goes by the "PeerFX" name posted on September 19, 2008 at 5:42pm - This article from the Financial Consumer Agency of Canada can better explain the fees you incur when using a credit card in another country: http://www.fcac-acfc.gc.ca/eng/publications/creditcardsyou/servicefees/CCSerFees-7-eng.a
Compared with our model, we give our users the median rate with a percentage fee that is 75 - 80% less than the conversion fee of 2.5% charged by credit cards as illustrated in the example in the above website.
We hope this clarifies the issue for you and if you have further questions do let us know.
Cheers,
Florence
PeerFX
to answer bob, please read this link.
http://www.bankrate.com/brm/news/cc/20050624a1.a
this shows you that credit card company charge 1% fee which is more than 0.35%
Bob, which credit card company that you are using ? seems save more money than FX by the example given. peerfx have EFT and wire transfer options (pay fees). I dont know about the EFT yet.
