Worldwide, we fork out over hundreds of Billions in bank fees each year. ($11B just in Australia)
And if you currently use a bank to transfer money – you are paying more than your fair share.
Fortunately there a few good alternatives and the largest of them all in Australia is OFX who also has physical operations in the USA, UK, Canada, Singapore and NZ.
Click here to open OFX in a new window to check it out. (Get 2 free transfers)
Why should you read this review of OFX?
My name is Quinn and I have used OFX on a continual basis for over 10 years.
For me that has been OFX but to get the best rates, I have also used many of their competitors in recent years and I have found that there is a lot to consider when choosing a money transfer service.
To save you time and money – my goal is uncover everything you need to make a wise decision.
So what does OFX (hopefully) deliver that banks can’t?
- Control of your Money (timing can make a huge difference)
- Customer Service (like phone support)
- Much Better Exchange Rates (this is where I usually save the most)
- Low Fees (often Zero)
- Security at least as good as a Bank
Before we get into the nitty gritty, (if possible) I recommend you choose a service that has operations in the country where you live.
For instance, OFX has offices in Australia, USA, UK and NZ.
There are three very good reasons for this:
- Your money is safer, because it is regulated by the country you live in.
- Service is generally the highest (like telephone support) when there are offices in the country you live.
- Rates are usually the most competitive because of economies of scale (Basically the more of your country they deal in – the better the rate they can offer)
If there is no service where you are resident then choosing one that operates in the other country you transact between is the next best thing.
Other then that choose a big one – OFX is one of my top picks.
That said, here is my step-by-step review!
Originally owned by Macquarie Bank in Australia but more recently listed on the stock market (ASX) in 2013, OFX has operations worldwide and is fast becoming a big “fintech” success story.
First things first …
Safety and Security
When it comes to sending your money abroad, OFX is just as safe and secure as any bank, maybe safer…
Because OFX has offices worldwide – it is regulated in the Australia, UK, NZ, Canada and the USA – making it one of the most regulated financial companies in the world. (In the case of the US, they actually have to meet the regulations of each state in which they operate.)
OFX also is also obligated to comply with international anti-money laundering laws of these countries.
In short, the chance OFX will lose or mishandle your money is as low as it can get from what I can reasonably tell.
How it Works
Registering with OFX is simple. The setup process is clearly outlined on the website and customer service “dealers” are there to help if you find you need any help.
Here are the two things you have to do:
- Register Online – Click here to register to check out current rates and make two transactions for free
- Verify Your Identity
Registration takes less than five minutes, then you’ll be on to verifying your identity, either automatically or through email.
You may also get a call from someone at OFX. They call themselves “dealers”, but really they are really there to help answer any questions you have.
When I registered, I found they needed me to provide a bit of additional information, like a copy of my ID.
Getting this information back to them was pretty straight forward.
In my case I simply scanned my driver’s licence, but a smartphone photo would be fine as well. Sending them over was simply by replying to the original email I received.
Setting up a Deal
Now the real fun begins. (Yes it is actually fun, especially when you lock in a good rate.)
Once you are registered it is time to set up a transaction. This can be done on the phone as well but I find their online platform to be powerful yet easy.
It is as simple as logging into your account, selecting the currencies and amount and “Get Quote” under the New Quote.
Then you need to fund your account.
There are two main ways of funding your OFX account:
- Direct Debit
BPay is by far the most popular for individuals and smaller businesses.
Direct Debit is used by bigger businesses in most cases. They also accept Poli and EFT.
Exchange rates get more and more favourable as the amount of money you transfer increases.
A nice feature though of OFX recently is that they show the rate you will get. Of course, if may change once you have logged in but in my tests it was pretty close.
It takes about 5 days end-to-end to reach a destination bank account – this was about 2 days quicker then when I used to use a bank.
Receiving money into your OFX account may be a day or two quicker or slower depending on who you bank with and the countries you transact between.
We’ve already established that money transfer companies have better fees and rates, but customer service is where they really shine. OFX lets you make transactions both online and, unlike the banks, over the phone 24/5 (Over the weekend currency markets close).
Making transactions online has an advantage over banks as well. OFX is very transparent – letting you see exactly where your money is during each step of the process.
You can also monitor their rates live so you can make a transfer whenever the rate is best for you.
For me, monitoring the live rate is the biggest perk.
It is this level of visibility and control let me save a great deal of money.
You can check out how I saved $2500 using OFX on a $20,000 transaction here.
You don’t have to commit to watching rates every day – simply ste up some alerts to guide you.
Either way, you’ll always save money over bank exchange rates.
Rates and Fees
Everyone likes saving money.
The Fixed Fee is one of OFX’s greatest benefits.
And the advantage of better exchange rates cannot be expressed enough. The logic here is simple: the more money you transfer, the better the exchange rate you’ll receive.
When I compare the mid-market rate and the rate I was offered by OFX on my online transaction and the difference ranges but most transactions are less than 1%.
The rate also improves for larger amounts. As for the banks, the difference is somewhere between 2% and 4%; this can be a lot when transferring big amounts.
For example, you save minimum of 3% on every transaction that is $600 per $20,000 transaction.
This combined with some simple timing I have found it is easy to save over $1000 for every $20,000 moved.
The Bottom Line
When I deal with OFX I benefit from excellent exchange rates, great customer service and speedy transaction times.
Once when a transaction got delayed (my fault) they actually gave me an even better exchange rate as compensation.
OFX continues to meet my expectations and has even gotten better over the years.
And thanks to other OFX reviews, I know I’m not the only one.
What about the bad reviews?
Seeking out the one star reviews makes me think they have pretty tight standards when it comes to who they can deal with. If you run a business for example, they may want proof of the type of business you are involved in to ensure it is legal. These tight rules are most likely due to all the regulations they have to satisfy. Certainly I had no worries and by far the majority did not either.
If you have a business or unusual circumstances, my advice here is to understand what they need so you can get approved quickly.
For most people it will be smooth sailing.
All in all, I am impressed with the OFX service (Get 2 free transfers when you click here and sign up) and will continue to enjoy saving load of money over a bank.
Thanks for reading!
Here are some more details
OFX and it’s background
Previously known as OzForex, OFX is a 17 year old Australian online foreign exchange and payments company. Headquartered in Sydney and listed on the stock exchange, OFX provides money transfer services to over 190 countries in 55 varying currencies starting from large agencies to individuals and small businesses. Besides Australia, it has also expanded its physical operations in USA, UK, Canada, Singapore and NZ. Probably most impressively to operate in the USA it needs to meet the regulations of each state in which it operates.
In simple terms, how does OFX work?
Transferring money through OFX is a simple 3 step process.
- First, the user has to register and lock in the transfer by providing the amount, currency and the recipient.
- Secondly, the user has to transfer the funds from his/her bank account. Keep in mind that cash, credit cards, cheques and bank drafts are not accepted.
- Thirdly, track your fund transfer online or through the OFX app and see your transfers getting completed within a few business days.
I understand OFX business relies on safely transferring my money but what methods exactly do they use?
OFX says it uses an efficient combination of SSL encryption, fraud prevention and identity protection methods to keep your money safe and to deliver it to the intended recipient. Password management, security questions and automatic time outs provide customer account integrity.
From a users perspective, when you use the system you will see for yourself may of these safeguards.
They also say they have a dedicated fraud prevention team is in place to detect attempts at phishing or malware. Finally a dedicated Secure Socket Layer encryption provides a secure connection while you are online, using the OFX services.
Why should I choose OFX over my bank which seems to offer a very similar service?
I consider using a bank for transferring money as a kind of “stupidity tax”.
Easy for me to say now that I have been using them for personally for over a decade. For someone considering OFX for the first time, I understand that the familiarity of using your bank is a strong motivation.
To help with this, I recommend registering with them and using one of the free transfers (see link above) to move a small amount of money so you can get familiar with service and compare the savings to your bank.
Apart from not giving your money away in the form of poor exchange rates offered and fees you should also consider that things like telephone service 24 hours a day, the ability to set rate alerts (SMS and Email) and a dedicated online platform that enables you to track the progress of your funds can add significant value.
Why should I choose OFX among all the other money transfer services? What makes it different?
Differentiating can be hard if you look at it purely based on the savings you make. Where I find OFX is a clear standout is that it has offices worldwide. The other big difference is in the online platforms they have (or not).
As far as customer support goes, I found there is a very big difference between calling OFX and some competitors even when they all pretty much have 24 hr phone numbers – which they may do. The reason is that each country is different in terms of the different banks and how they operate and being able to speak to someone familiar with the banks in the countries where you physically located makes a big difference.
For example, when I lived in Canada the customer service person there was familiar with the bank I had and could tell me how I could most easily transfer funds to OFX and how long it typically took for fund to clear.
In Australia, every thing was different from the way to transfer funds to OFX to the time it takes for funds to move. Same for USA, UK, Hong Kong and New Zealand – in each case they will have representatives in these countries who know the ins and outs of each bank.
Is there any user identity verification while registering?
They try to automate the process as much as possible. However, in some cases the OFX customer support team will get in touch with the user to verify the identity and information. The user may need to send in additional documents as proof. All part of the process is intended maintain the overall security and integrity of OFX.
Is there a provision to cancel a transfer?
Usually a transfer is a binding contract where you give your explicit permission to OFX to initiate a monetary process. Trying to cancel a transfer might lead to financial loss. It is best for the user to contact the OFX support team immediately in such cases of emergencies.
Are there any maximum or minimum limits on the amount I need to transfer per transaction?
While there are no maximum limits on major currencies like USD, GBP, AUD, CAD, EUR, NZD, and JPY, there are limitations when it comes to regulated currencies such as Chinese Yuan (CNY), South African Rand (ZAR), and Korean Won (KRW) which are regulated by the respective governments.
The minimum amount a user needs to transfer per transaction is 250 Australian Dollars.
What are the transfer fees that I need to pay OFX?
- For amounts less than 10,000 AUD, OFX charges a standard rate of $15 which is levied on all transactions.
- For transferring amounts more than 10,000 AUD, OFX does not charge its users anything.
How long does it take to transfer my money to the recipient?
The time required for a complete transfer depends upon several factors including recipient’s country, currency and recipient banking networks.
While AUS to US transfers happen within the same day, AUS to China might take 3-5 days. That said you also need to take into consideration that banks at both ends will play a roll in the time taken.
Based on personal experience, even though OFX transacted the same day they got the money – it usually took 4-5 business days end to end. (You get notified as OFX receives funds and makes the transfer)
Can I track transfers that I made through OFX?
OFX will notify users regarding receipt and pay off of funds through emails. Users can also set SMS alerts from their online profiles. Payment transfers and receipts can also be tracked through the OFX mobile app after signing in.
Can I avail key facilities offered at OFX through the mobile app?
For global travellers and business travellers, the OFX app supports all the essential facilities on the go. From viewing live exchange rates, to making single or multiple transfers to contacting personal and business customer service; all the essential facilities and more can be availed. This specific app is supported on iOS v7 and above or Android Honeycomb and above.