How does foreign currency exchange work?

When sending money abroad or overseas, foreign currency exchange swaps one local currency into another. An international money transfer via a bank or transfer services allows a customer to convert their existing currency into the desired foreign currency, using exchange rates based on the global trade markets.
Hand holding a mobile showing an international bank transfer in the N26 app.

Reasons for making a foreign currency exchange

Banking customers frequently need to transfer money between their own international accounts or to someone else’s foreign account. There are many reasons to do this, from wiring funds to family overseas to paying expenses on a property abroad.Different currencies exist all over the world. That means foreign currency exchange rates are needed to make sure that the amount of money being transferred in one currency is equal to the amount received in the other.
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International, digital money transfers

With online foreign currency exchange, a customer makes international money transfers through a digital bank or firm, which quotes an exchange rate before processing the transaction.All digital banks offer transfer services, and there are firms that specialize in international currency transactions, such as Wise, MoneyGram, or WorldRemit. International money transfers at N26 are powered by Wise, so you can send and receive money quickly and reliably, anywhere in the world.
N26 cross-border payments feature showing a bank transfer from euros to Us dollars.

How does foreign currency exchange work?

Foreign currency exchange converts one currency into another, but it’s not usually at a 1:1 ratio. Exchange rates change regularly based on fluctuations in global trade markets.When an international money transfer is made between currencies, the rate calculates the difference based on the markets at that exact time.The amount the customer sends is then transferred at this rate into the other currency.Learn more
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Foreign currency exchange rates and fees

Once a bank or firm quotes the exchange rate, the customer chooses to accept the rate or not. If they accept, the transaction goes through. On top of the exchange rate conversion, there might be certain transaction fees for sending or receiving an international money transfer.Rates and fees can differ greatly from bank to bank and from one transfer company to another. Learn more about foreign transaction fees here, and how to make sure you get the best deal.
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How to exchange foreign currencies

Using a money transfer firm is often the best option when making an international money transfer, in terms of speed and cost. They’re able to make these foreign currency exchanges faster and cheaper because they use mid-market and real-time exchange rates.These firms can afford to charge lower fees because they don’t have the overhead costs that banks do. Plus, they’re often transparent with the customer up front about what charges to expect.
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International money transfers with N26

Global money transfers at N26 are powered by Wise (formerly TransferWise‌) — ‌ a specialist in foreign currency exchange. With 35+ currencies and real-time market rates, you can send money around the globe quickly and easily. Just a few taps in your N26 app, and your money arrives in 35+ countries with no hidden fees. N26 doesn’t charge anything extra for this service. When you make an international money transfer with N26 and Wise, you know you’ll be getting the best rate.

Comparing international money transfer services

There are other international money transfer services, like MoneyGram and WorldRemit. MoneyGram offers fast transfers that take up to one working day, and WorldRemit also authorizes most transactions in mere minutes.However, MoneyGram’s and WorldRemit’s fees vary widely between countries, and they’re not always transparent with their exchange rates or costs. Although both prioritize speed, they may not be the most economical option.
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How to access Wise with N26

N26 customers can access international money transfers in just a few taps directly in their N26 app.Simply open your N26 app,  go to the ‘Home’ screen, and tap on ‘Send Money.’ Then tap the ‘+’ symbol on the top right and select ‘Foreign currency transfer.’ Enter the transfer amount and choose the currency to get a quote.Add and review your recipient’s bank details, and confirm the transfer!

Domestic money transfers with N26

While N26 and Wise will take care of all your international money transfer needs, N26 MoneyBeam makes domestic transfers simpler than ever.With this unique feature, you can send, receive, and request funds from any other N26 customers at no extra cost. All you need is their email or phone number — no bank details required. Easy, instant transfers in just a few taps.
Incoming and outgoing instant payments
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  • What is an international money transfer?
  • How does foreign exchange work?
  • What is an exchange rate?
  • Does it cost a fee to send money internationally?
  • Does N26 offer foreign currency exchange?