What are P2P payments and online transfers?

What are P2P payments and online  transfers?

It is easier and faster to transfer money abroad nowadays. With P2P payments, you can easily send money to your friends and family. You can do your transfers online or using your mobile phone. The most important is to find P2P service which will be the right solution for you.

Peer-to-peer payments

With peer-to-peer payments you can send and receive money from your bank account or a card to the recipient’s account.

PayPal is the most famous PSP service, but other services are growing, too. You should find out about other services and compare them. Find the one that will work best for you. Compare estimated fees, exchange rates, and transfer speed.

It is easy to use peer-to-peer payment accounts. Firstly, choose the service for transferring money, then create an account on its website. It will take you only a few minutes or sometimes less than a minute. You must provide your bank account, credit or debit card. Sometimes you will need to verify your identity.

When you want to send money, choose the recipient’s country, write details about him, and the amount you wish to send. The money will arrive in minutes or days. Transfer time depends on the service you choose. It can also depend on chosen payment or payout method, too.

TransferWise Peer-to-peer payments

P2P services

P2P payment services will do the transfer for you. They are better than banks. Pros of these services compared to banks:

  • They are cheaper than banks because they will charge you lower fees. If you use a bank for sending money, you will pay around 5% of the transaction. With P2P services, you will usually pay 0.5 to 1.5% of the amount. Fees sometimes depend on many factors, but they are always cheaper than banks’ fees.
  • Banks will usually offer higher exchange rates. Some of the P2P services will offer you mid-market rates.
  • They will deliver your money faster than banks.

Send money to friends and family

Technologies are changing fast. Sending money to friends and family became easier. You don’t need to use a bank as your provider anymore. You can use P2P services or applications. Here are some of the applications:

  • TransferWise
  • Square Cash
  • Venmo
  • Popmoney
  • Zelle
  • Google wallet
  • Dwolla

TransferWise

This is a peer-to-peer international money transfer service. How does this system work? If you want to send Euros to Dollars, it will find someone who needs the opposite transfer. These exchanges are done automatically and you don’t need to care about how it works under the hood.

With this service, your money will arrive at your recipient fast, in only 1-2 days. You won’t pay high fees for sending money. It will charge you only 0.5% of an amount for most of the destinations.

Money transfer options:

  • bank transfers
  • credit and debit card
  • Facebook Messenger

TransferWise is different from banks and other exchange services because it offers you mid-market rates for transferring money abroad. You can check the fees and the exchange rates on its website, and you don’t need to worry about hidden fees anymore.

How TransferWise Works

CurrencyFair

This is one more P2P service for sending money worldwide. It is founded in Ireland, in 2009.
Its exchange rates are set by the users, and the fee is $3. You can also use MarketPlace, and sell your currency into another. Sometimes you can get better exchange rate than a mid-market rate. You will pay an additional fee which is 0.15% of the amount. The money will arrive in a couple of days.

Xoom

Xoom is a popular service for sending money. PayPal is its owner. If you decide to use this service, it promises you that the money will be delivered instantly. It actually depends on chosen payment and delivery option. If you pay using a bank account, transfer time depends on the bank. The delivery time is fastest when you use debit or credit card for sending money.

The transaction fees depend on the payment method, the recipient’s country and the amount you want to transfer. They will be lower if you choose to pay with a bank account.

Xoom doesn’t use mid-market rates as TransferWise. Its rates are higher. You should be ready to pay transfer fee plus a hidden fee in added to the exchange rate. Before you decide to send money, visit its website and see potential charges for transferring money abroad.

P2P payments are the best innovative solutions that improve international money transfers. Choose TransferWise, CurrencyFair or Xoom service, and enjoy simple, safe, fast and cheap money transfer process.

TransferWise Review

TransferWise Review

It wasn’t simple to find a good option for send money abroad to my family. I can pick a bank or one of various exchange services, but most of them will charge you a lot in fees. I was extremely delighted to find out about TransferWise. It utilizes the mid-market exchange rate for currency conversion. I additionally intended to avoid high costs that financial institutions will certainly charge me. I picked TransferWise as my service provider, and it was the right choice for me. Are you prepared to learn why I choose TransferWise? Keep reading my TransferWise review and find out how to save money on your next transfer.

What is TransferWise?

TransferWise Review

TransferWise is a relatively new online service which will assist you in sending out your cash to anyone who lives in another country. The company was found in London, in 2011. Its owners are Kristo Kaaramann and Taavet Hinrikus. They had a strategy to improve economic services and money transfers in particular. They were inspired by their individual experience, and made a decision to fix an issue about transferring funds abroad. We must be thankful for these guys as they made sending out cash with higher fees is the past. How did they start creating TransferWise platform? They both are Estonians but who had to work between the UK and their country. They needed to transform from Euros to Pounds with a bank, however it had not been low-cost. Hinrikus was paid in Euros due to the fact that he had UK account. Kaaramann was paid in Pounds since and he had a bank account in Estonia.

They end up with an excellent plan. Hinrikus was putting his Euros right into Kaaramann’s Estonian account while Kaaramann was doing the contrary. They desired to develop more affordable solution compared to traditional financial institutions. It was actually TransferWise.

This solution becomes really popular at present. Its customers were sending ₤ 1 billion each month utilizing this service in 2017. Are you captivated?

Are you wondering how does TransferWise work?

Are you wondering how does TransferWise work?

This solution is based on A peer-to-peer system (P2P) that boosted money exchange economy. Did you know that? Thanks to P2P, individuals can exchange money directly but same time without knowing each other.

TransferWise is a peer-to-peer money transfer solution. Imagine you have to transfer Dollars to Euros. TransferWise will discover a person that wishes to perform an opposite transfer Euros to Dollars. It will just transfer his Euros to you, and your Dollars to him directly without crossing any border. It works perfectly well as both parties benefit from it. There is no requirement for an interaction between you two. TransferWise will do it. Same time you don’t even have to make an effort to understand P2P

TransferWise fees

You probably know that some banks claim their international transfers are free (or almost free). Did you know that they will still charge you for the transfer? They do it differently, through a hidden margin that they add on top of the exchange rate. I chose TransferWise for sending out money to people who do not reside in my country and this is why:

Transferring cash with financial institutions is up to 8 times more expensive compared to TransferWise. With TransferWise you will pay a small, fixed fee of only 0.5%, while banks will certainly charge you approximately 5% in hidden charges. So if you decide to use TransferWise instead of the banks or another exchange solution, you will definitely save some money for your next transfer. There is no more shedding money on high charges! I hope this information will make your day.

I did a research to figure out how much you can actually save when sending money abroad. We will assume that you will certainly send 1000 GBP to EUR.

Provider Transfer charge (GBP) Exchange rate Reciever gets (Euro)
TransferWise 4.29 1.1476 1142.68
Nationwide 9.00 1.1238 1113.69
NatWest 10.00 1.1238 1106.81
Moneygram 6.49 1.114 1106.46

TransferWise charges 4.29 GBP for this operation, as well as its exchange rate is 1.1476. The recipient should get 1.142.68 EUR. Nationwide transfer cost is 9.00 GBP, and its exchange rate 1.1238. An amount received as the outcome of this transaction is 1113.69 EUR.

As a conclusion, TransferWise is the least expensive company for sending money abroad.

TransferWise exchange rate

We already spoke about hidden fees that banks typically add to currency exchange rate. If you choose TransferWise you can be assured they will do the exchange with the real rate. But what if the exchange rate goes into not favourable direction? The rate gets frozen and warrantied for up to 48 hours for most of the currency pairs. So there is nothing to worry about in most cases. Otherwise, there is a mechanism that allows you to set a certain threshold when the operation will be cancelled and you get a full refund. Even if you forget to set one it will default to 5% change from the original exchange rate.

TransferWise’s web site has the currency converter that allows you to get a quote instantly. They also offer you to compare the real exchange rate to exchange rate of some popular banks and money transfer providers to see the difference. You do not have to pay bank’s hidden charges any longer.

Is it safe to use TransferWise?

The first step of each transfer is the deposit to TransferWise’s bank account. The obvious question that comes up is – “Should I trust them and send my money?”. The should answer is – yes. TransferWise is safe, so you can use it with no worries. If you intend to find why TransferWise is completely secure, check this TransferWise review. There are my general recommendations for verification of a payment provider:

  • Check out various other reviews in order to see what other people say about it. What was their experience? Did they have any problem?
  • Check if the company operates legally. For example TransferWise is registered with UK Financial Conduct Authority. FCA will certainly provide a reasonable coverage for your money transfers.
  • Check how they operate with customer’s funds. Do they keep them in separate segregated accounts?

TransferWise online account

TransferWise online account

TransferWise is now not only money transfer company but also a virtual bank. They launched this innovative service in 2017. A TransferWise borderless account is an online account but you can use it almost the same way as a real account. The only thing is that you can’t get a debit card assigned to it, but I believe this feature should appear sooner or later.

These are key features of Borderless account:

  • It’s easy to get and to use. All you should do is to signup for a TransferWise’s account. Or activate your online bank account if you are already their customer.
  • You can send funds to lots of countries, and receive it from many countries.
  • You can get bank accounts in different currencies
  • There are no costs for transfer and receiving cash in your local currency.
  • You can make transfers to other countries directly from your online bank account

This account is especially good for freelancers or cross-border workers. It’s easy to get, it’s multicurrency and there are no high costs associated with it. If you have a firm, this account will certainly be a good choice.

I wrote this TransferWise review to help you discover the finest service for sending your funds abroad. I did my best and also I wish it sufficed. The choice is yours but I believe you will likely pick TransferWise as your next service provider. You can also find even more reviews concerning this provider to make the final decision. It is clear that TransferWise has many advantages. I’m one of their loyal clients and I can’t imagine my routine international transfers without them. I think this company deserves your trie, especially that you can get the first transfer absolutely free of charge.