I learned of the peer-to-peer foreign exchange facilitator CurrencyFair (CF) last month. CF is based in Ireland and was founded by four former bankers (with a blend of nationalities; Irish, Australian, Irish/Australian and Welsh) who wanted to “build a currency exchange on the internet. It will be where people buy and sell currency from each other. Not from a bank”. The currencies supported are listed below:
From the various online feedback I read, they sound like a legitimate setup and so I decided to try them out.
Before opening the account, I sent CF an email to ask some basic questions. Some of the answers can actually be found in their FAQ, but I wanted to confirm them (in case they are outdated), and more importantly, I wanted to see if CF responds to questions in a timely manner.
I received a well-researched initial reply from an associate director in about one business day (considering the different timezones). Subsequent questions to the same person were replied within an hour when CF was opened for business. Great. CF did well.
With the initial questions out of the way, I went ahead and register for an account. CF requires the following information — name, address, date of birth. (Note to U.S. users: being in Ireland, CF does not require the social security number). To verify identity, CF asks for a copy of the passport or photo ID and two proofs of address (phone bill, utility bill etc). These can be uploaded online to their website. After I uploaded the requested information, my account was verified and active the next day.
Getting money to CF
At CF, before any foreign exchange can be done, money must first be transferred into one of CF’s bank account. CF’s USD bank account is Bank of America (BOA). I explored a few ways to get money to CF’s BOA account:
- Wire the money (fees): Wiring the money to BOA would be fast, but it will also require me to visit my credit union and a domestic wire fee of $20. Scratched that.
- Use BOA’s internal transfer (free): BOA’s online banking supports intra-bank person-to-person transfer. I don’t have an existing BOA account so I considered opening a BOA account for this purpose. I chatted online with BOA’s rep to make sure that I can transfer money to CF. The rep told me I can transfer to any BOA account. I rephrased my question and asked if that includes a “Business account”; the rep then replied that I should call a number to verify. I did not call the number since I could get wrong information again; instead I asked a friend who has a BOA account to try to add CF into the transfer list. BOA’s online system responded that online transfers to business account cannot be added, just as I suspected. I am really glad I checked first; otherwise I would be stuck with an useless BOA account for the next few months.
- Use an ACH push (free): Many banks now support ACH pushes to other financial firms but these typically require account verifications (e.g. two small trial deposits). They also require the sender to be the owner of both accounts. Nevertheless, there are two institutions which I know of that support ACH pushes without these requirements. The two are ING Direct (Orange checking account, OCA for short) and USAA. Since I already have the OCA, I decided to try that. I found that OCA’s transfers are typically processed on the second business day. After adding one business day for the timezone differences, my money arrives at CF in three business days.
Great. I have managed to get money to CF without any fees. Now I am ready to check out CF’s foreign exchange system.
(continue to Part 2)