What are peer to peer international money transfers?

Peer-to-peer (P2P) transfers let you send money overseas using a platform that connects you directly with another person, rather than going through a bank or currency exchange. This method can offer more competitive rates, with the potential to get closer to the real exchange rate (mid-market rate), which is typically reserved for larger financial institutions.

In simple terms, P2P transfers work like other sharing platforms (think carpooling or P2P lending) where the middleman is removed. You’re not dealing with a bank that adds a margin to the exchange rate; instead, a P2P platform matches you with someone who wants to transfer money in the opposite direction. 

For example, if you want to send money to the UK, the platform might match you with someone in the UK who wants to send money to Australia. The exchange happens directly between users.

It's important to check whether the platform supports the specific currencies you're transferring. Some peer-to-peer platforms may not process transfers in all currencies, or they may not have as many currency pairs available as larger banks or dedicated money transfer services.

In Australia, peer to peer transfers is still somewhat in its infancy, with only one large provider offering the service.

Wise is one of the most popular and trusted platforms for P2P international money transfers, offering transparent, low-cost services with no hidden fees. Instead of the traditional model where banks and currency exchange services charge high margins on exchange rates, Wise uses the mid-market rate — the rate you see on Google or XE — with a small, upfront fee.

P2P platforms earn by charging a service fee, usually a percentage of the amount you’re transferring. For example, Wise charges fees starting from 0.4%. While these fees are generally low, they can add up for larger transfers.

As peer to peer providers are fairly new to the foreign exchange landscape, you may be worried about whether it’s safe to trust them with your money. Ensure that any company you use is regulated by the Australian Securities and Investments Commission (ASIC), which requires financial providers to be transparent and treat customers fairly.

P2P transfers typically take 1–4 business days, similar to bank transfers, but the timing depends on the amount and destination country. The platform needs to find a match, which can sometimes take time.

Some platforms do offer a ‘best available rate’ option, but that could involve extra costs or a less favourable rate.

Here’s a quick overview to help you decide if P2P transfers are right for you:

The process is simple and similar to other money transfer methods:

1. Create an account on the P2P platform, providing details like the amount you’re transferring, currencies, and both your and the recipient’s bank details.
2. Send funds to the platform’s account.
3. The platform matches your transfer with someone who wants to send money in the opposite direction.
4. Once a match is found, the platform transfers the funds directly to the recipient’s account.