I’ve just come across WeSwap, a peer to peer currency exchange business. They match people traveling in opposite directions to swap local currency with each other for a very low fee. Members of WeSwap load accounts with their local currency and then request currency from other countries in exchange for the money in their account. When a match is found, both members are sent a prepaid Mastercard with their new currency.
Founded in 2010, WeSwap currently serves 10 countries (UK, Republic of Ireland, France, Germany, Spain, Italy, the Netherlands, Sweden, Norway, Denmark) and 6 currencies. They say they plan to expand both in geography and currency. I’m hoping they will offer services to the United States some time soon.
WeSwap charges a flat 1% fee on each swap and provides exchanges using current bank exchange rates. This is a very good rate in the world of money exchange. Most local banks will not offer this good a deal, even to their members walking in to buy foreign currency for a trip. However, there is at least one fee WeSwap doesn’t mention, probably because it’s out of their control: in many countries you will pay ATM fees to withdraw the money using your prepaid Mastercard. That doesn’t negate the value of this service, but it’s something to include in your calculations when deciding if WeSwap is a good value for you.
Living in the U.S. I have a bank account that refunds my ATM fees when I withdraw money, and they don’t charge foreign transaction fees. I also have credit cards that don’t charge foreign transaction fees. So I can use both of these options at the current market exchange rate at time of withdrawal/purchase. If you can get both of these options to work for you, you probably don’t need WeSwap. But most people don’t have both banks and credit cards with no fees. And in all other cases WeSwap is probably going to be the cheapest option you can find.
I’m pleased to see WeSwap getting in on the currency exchange business because I’ve long been bothered by the ridiculous fees and very bad rates offered at freelance currency exchange services like Travelex, hotels, and even banks. Many of them hide behind 0% commissions while exchanging your money at a rate that is so far from the market exchange rate that you lose 25% or more in the deal. And unless you have access to current exchange rates through a phone app (which means you have access to the internet or you have a free local data plan), it’s hard to know exactly how much you’re getting ripped off when you are looking to exchange money.
I’m still searching for a service that will take my leftover local currency (the paper stuff) at a reasonable rate. It’s almost inevitable that you end up with at least a bit of local currency at the end of a trip, which you can spend on ridiculously overpriced trinkets at the airport, or take home and put in a drawer. Perhaps this is a service WeSwap will be able to offer in the future. There’s only so much art I can make with unused currency from countries I won’t get back to any time in the foreseeable future.