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What is a Currency Transfer?

We take our role as money transfer advisors very seriously and want to equip our customers with as much market knowledge as possible, so they know what to expect when sending money abroad. On this page you will find out all about currency transfers, how to find the best way to send money abroad with the best deal and the most commonly transferred currency pairings. 

Updated: 27/09/2022
Read time: 6 minutes
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What is a currency transfer?

This term is used to describe the process of moving money from one country to another, using an agreed rate of exchange for the currencies involved. 

Here is an example of a currency transfer:

You are studying overseas in Europe and your student fees for the term amount to €8,500 EUR. You would like to pay for this amount using money in your bank account at home in the United States.

You conduct research and find the live interbank rate (also known as the mid-market rate) reflects an exchange rate of 1 EUR = 1.18241 USD. This means €8,500 EUR will cost approximately $10,050.47 USD.

Due to the excessive transfer fees charged by your bank, you decide to use the MoneyTransfers comparison tool to find the international money transfer provider offering you the most for your money.

Once you find the provider offering the most favourable exchange rate, you arrange an international money transfer that grants the recipient an amount closest to the live interbank rate.

You successfully send $10,050 USD from America, where it is received in Europe in the form of $8,500 EUR.

Apart from the above, there are some financial market regulators in Canada that help and support customers when they make a currency transfer to Canada or they get into the financial market in Canada.

Beware of the exchange rates when looking for the cheapest way to send money internationally.

Currency Transfer Guides

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We take our role as money transfer advisors very seriously and we want to equip our customers with as much insider knowledge as possible, so they know what to expect. Here you will find out all about currency transfers, how to find the best deal and the most commonly transferred currency pairings. 
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Currency transfer vs. Money transfer: What is the difference?

Both of these terms allude to the same process: sending money from one place to another. However, a currency transfer refers to changing, or converting, the currency of the money involved. For example: Sending money from USD to EUR, as seen in the above example.

Conversely, a money transfer is a broader term given to a variety of different transactions. The following are all examples of a money transfer:

  • Sending money from one US bank account to another: this is known as a domestic money transfer
  • Receiving funds from overseas, deposited into a multi-currency account: this is a type of international money transfer
  • Splitting a bill between friends using a peer-to-peer-payment system like Venmo or Cash App: this is another form of a domestic transfer

“Money transfers” is an umbrella term which encompasses a diverse range of payments. If you want to learn more, check out our guide: What is a Money Transfer?

How much does a currency transfer cost? 

You can always do some research and find out the cheapest way to send money abroad but the cost of transferring currency between countries greatly varies. The two main costs include:

Exchange rates

The most common way for companies to make money through their exchange rates is by adding a percentage-based mark-up (this varies between 0.1% – 6%) which can drastically affect the amount of money your recipient receives. Not all companies do this, however, and providers like PagoFX offer the real-time mid-market rate without any markups. This is the fairest exchange rate you can hope for and guarantees you will receive the most accurate currency conversion. If you would like to know more, check out the following guide on the top 10 money transfer companies.

Transfer fees

Sometimes both the sending and receiving banks (or financial institutions) will charge a transfer fee. It is important to understand the fee structure of any international money transfer before committing to a payment. Like exchange rates, transfer fees vary, with some companies charging a flat-fee, while others withhold a percentage of your transfer amount. Transparency is key when it comes to international payments and we recommend using providers who are upfront about the costs.

Top tip: Lock-in favourable exchange rates

The mid-market rate fluctuates constantly throughout the day, but some international money transfer providers allow customers to lock-in a favourable exchange rate. If you are given the option to do so, take advantage of this offer. Certain providers only offer a rate for a limited time period and if the money transfer is not completed within this time, the original exchange rate will expire.

Stay up to date with the latest news and regulations

What are the most common currency transfers? 

Below is a list of the top 6 most common currency transfer pairings:

April Summers

April is a trained journalist and the Content Editor for MoneyTransfers.com. She has 10 years experience writing about a diverse range of subjects, from financial services to arts and entertainment. When she’s not writing about global remittances she can be found daydreaming about her next holiday abroad.