There’s no disputing it – XE.com is the granddaddy of online currency conversion. Founded way back in 1993, XE has educated countless businesspeople, travellers, and overseas workers on the true interbank conversion rate.
Shady converters used to charge outrageous rates with impunity. For years, their marks had no clue how badly they were getting ripped off. Now, they knew.
However, they did more than provide incredibly useful information to consumers. They launched XE Trade, a Forex trading platform, in 2002. Unless you were a trader, though, few knew about it, as XE buried it for years on their “Other Services” page. Its profile elevated considerably in 2015, after Euronet, a payment services company, acquired the firm, and since the beginning of this year when it merged with other Euronet’s other large payment provider – HiFX.
How does it stack up to established players like TransferWise? Is XE a reliable option for currency transfer? In this blog, we’ll break down their strengths and weaknesses so that you can decide for yourself, but first off – why do you even need a money transfer provider as an immigrant in a different country.
Do I even need a money transfer provider?
The short answer is that if you’d like to save money you’d better use a money transfer service like XE’s instead of using your local bank. Banks are just not specialized in international money transfer. It’s a part of their full service suit. They charge a fixed fee from each transfer, but worse they offer exchange rates which are significantly worse than the real exchange rate at that point. If you are moving to another country and transferring all your belongings and cash, you are bound to end up paying very high fees using the banks.
Whereas, money transfer companies are specialized to provide one type of service. They possess a greater degree of proficiency in everything related and offer wholesale rates on the currency.
Should you be using XE money transfer, or another provider? more on that below.
XE.com – the gold standard for checking interbank rates online
Before 1993, unless you were a trader or banker, few people knew the real rate of exchange. The average person on the street blindly trusted the banks. The banks abused their innocence, charging huge margins.
Then, one day, XE.com came along and ripped the wool away from our eyes.
For the first time, we saw the truth – the banks weren’t our friends. Neither were currency exchange houses. For years, these players preyed on our ignorance, making BILLIONS of dollars in profit. When XE came on the scene, currency transfer providers, for the first time, were forced to offer concessions to consumers.
The site was a boon to the average Forex trader as well. From the early 2000s onward, not did XE provide a trading platform, but beginner-friendly information on the basics of FX. Additionally, its charts, stats, and conversion tables offered free analysis tools that any trader could use.
XE Trade – XE’s first foray into currency trading
Despite being exposed for the egregious currency exchange rates they charged consumers, the banks barely budged. They didn’t need to – they were the only show in town. Outside of them, our only real alternatives were Moneygram or Western Union. Their rates were no better, as this duopoly had an iron grip on the non-bank transfer market.
XE’s founders knew they had to do more than just broadcast the real rate of exchange. In 2002, they launched XE Trade, a platform that made use of a third-party trading desk. So, why didn’t this service become instantly famous?
In the early days, the trust factor was their biggest obstacle. Fee-free transfers and much slimmer margins than the banks may seem like an irresistible deal today. As recently as 2009, many feared the consequences of exposing their bank details on the internet.
Nonetheless, XE slowly amassed a legion of early adopters. On forums across the net, word slowly spread that there was a better, cheaper way to move your money internationally.
Euronet acquires XE
As the 2010s dawned, XE remained THE place on the web to check out the real exchange rate for every currency pairing imaginable. However, other players quickly co-opted the currency transfer movement that XE helped start.
The biggest one, as you may know, is Transferwise. Offering an innovative money transfer system and unparalleled transparency, it has become the second-largest money mover in the world. Incomprehensibly, Western Union is still #1.
For years, XE was content to remain a small operation. To this day, it employs 40 employees and generates estimated annual revenues of only 12 million USD.
In 2015, though, payment processor Euronet had a grander vision for what XE could become. XE had a world-class brand and highly qualified traffic. Euronet had sophisticated currency transfer services – Ria and HiFX – already under their umbrella.
It was a union that made perfect business sense. In September 2015, Euronet announced that it had acquired XE for $60 million in credit and 640,000 in shares. A lump-sum payment in straight cash was also part of the deal, but the amount was undisclosed.
It didn’t take long for Euronet to make its impression on XE. By December 2015, they moved XE’s currency exchange service to the front page. Now, visitors to the site could easily access money transfer – before, they had to find it in the nondescript “Other Services” section.
January 2019 – HiFX merges with XE
Like XE, HiFX saw an opportunity in the obscene fees and margins charged by the financial establishment. Not long after their founding in 1998, they became one of the most popular non-bank currency transfer services in the UK.
In 2008, they jumped online after acquiring Currency Online, a trading desk based in New Zealand. Their popularity continued to increase – in 2013, they moved 9 million GBP. This figure got Euronet’s attention – the following year, they put together a blockbuster deal, netting HiFX’s founders 145 million GBP. This gave Euronet currency transfer assets to compliment Ria, a remittance processor it already owned.
However, once Euronet acquired XE in 2015, they controlled a brand that vastly overshadowed both Ria and HiFX. It was only a matter of time before XE brought one or both services under their umbrella.
In January 2019, Euronet merged HiFX with XE’s money transfer service. At that point, HiFX ceased to exist, save for the capabilities XE assumed upon their merger.
What are the pros and cons of XE money transfer?
By now, it’s clear XE is a reputable firm. Yet, it is still a smaller player in the online money transfer industry. In its most recent financial year, it only recorded 12 million USD in revenue.
However, according to this XE money transfer review, this service offers many positives (and relatively few negatives). Firstly, Euronet, one of the world’s largest payment processing companies, backs it. As such, customers can rest assured their transfers will process promptly.
Secondly, thanks to its union with HiFX, it is now regulated in more markets than before. Because of this, XE is now available to a broader base of customers around the world.
Over on Trustpilot, most customers describe their experience with XE as quick, easy, and reliable. They also loved XE’s lack of fees and their skinnier margins versus the banks.
Complaints regarding XE on Trustpilot are few and far between (only 2% ranked their experience as poor or bad). However, some customers complained about the lack of transparency, shifting rates during transactions, and non-competitive rates versus other FX brokers.
XE.com – an excellent alternative to the banks
It was only a matter of time before the world’s best currency rate site became a force in the cash transfer industry. While it is small compared to giants like Transferwise, it provides secure, reliable rates AND transfers for travellers and traders alike.