How does foreign currency exchange work?
When sending money abroad and 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.
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. Wiring funds to family overseas or paying expenses on a property abroad are just a few reasons to make a foreign currency exchange.
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.
International, digital money transfers
With online foreign currency exchange, a customer makes international money transfers through their chosen digital bank or firm, who quotes the customer an exchange rate before processing the transaction.
All digital banks offer transfer services, and there are money firms that specialize in international currency transactions, like Wise, MoneyGram, or WorldRemit. N26 partners with Wise for quick and reliable international money transfers, anywhere in the world.
How does foreign currency exchange work?
Foreign currency exchange converts one currency into another, but it’s not usually in a 1:1 ratio. Exchange rates change regularly based on the fluctuating global trade markets.
When an international money transfer is made between accounts, the rate calculates the difference based on the markets at that exact time.
The amount the consumer sends is then transferred at this rate and into the other currency.
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, certain transaction fees might also be applied to send or receive 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.
How to exchange foreign currencies
Going through 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.
Plus, 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 they can expect.
Wise with N26
N26 have partnered with Wise—formerly TransferWise—a specialist in foreign currency exchange. With over 38 currencies and real-time market rates, Wise offers a quick and seamless service for a minimal fee. They even use a comparison tool to check their rates against other exchange services.
When you make an international money transfer with N26 via Wise, you know you’ll be getting the best rate—and never have to worry about hidden fees.
Comparing international money transfer services
There are other international money transfer services, like MoneyGram and WorldRemit. MoneyGram offers swift 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.
How to access Wise with N26
N26 customers can access the Wise feature easily, directly via their N26 app.
Simply open your app, tap the arrow for ‘Send money’ and select ‘Foreign Currency Transfer.’ Enter the amounts and the currencies you wish to exchange, and then follow the prompts until your transaction is complete.
Want to learn more about the Wise app feature? Click here.
Money transfers with N26
While Wise will take care of all your international money transfer needs, MoneyBeam makes domestic transfers simpler than ever.
With this unique feature, 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 of your smartphone,Incoming and outgoing payments.
What is an international money transfer?
An international money transfer is when someone sends money overseas, either between their own international accounts or by making a payment to another individual’s foreign account. The money is converted from one currency into another via a foreign currency exchange.
How does foreign exchange work?
The value between two different currencies during a foreign currency exchange is calculated using an exchange rate. The amount the customer is transferring from their current currency is measured against the currency of the destination using the current foreign exchange rate. This rate is calculated based on the global trade market.
What is an exchange rate?
Based on the foreign global trade markets, an exchange rate is the value of one currency as it compares to the value of another. The global markets change regularly, therefore so do global exchange rates.
Does it cost a fee to send money internationally?
There are generally some fees and charges when making international money transfers, although some banks and money transfer companies charge more than others,or might not be transparent about their full costs ahead of the transaction. Sometimes the fees between different country transfers can also differ greatly. Be sure to read the fine print carefully before you authorize a foreign currency exchange.
Does N26 offer foreign currency exchange?
Yes, N26 is partnered with Wise, a money transfer company that is fast and cost-effective. They charge minimal fees for international transfer transactions, use the best exchange rates available, and are always up front and clear about every fee, so you can feel confident in your transaction.