Peer-to-peer exchange firms cut out the banks and brokers P2P firms in the UK, such as TransferWise and Midpoint, which opened last year, are authorised by the FCA, which means funds are ring-fenced in a separate client account. However, not all of them are regulated here. CurrencyFair, which started in Australia in 2010, is registered with the Central Bank of Ireland so it comes under the European Communities Payment Services regulations. MoneySwap, one of the first P2P firms which launched in 2009, is regulated by Hong Kong Customs and Excise. They both also keep clients' money in segregated accounts. The main advantage is that you get the midmarket interbank rate banks use to trade with each other plus their commission which can be 0.5pc to 0.15pc. Brokers typically add 1pc-2pc to the midmarket price and banks add up to 5pc. The exception is MoneySwap, which uses different buy and sell rates. Or you may get a better rate from another customer using the site with a matched trade. CurrencyFair says 47pc of its business is matched trades. TransferWise charges 0.5pc commission (or a £1 fee on transfers under £200), making it cheap for smaller amounts under £2,000. CurrencyFair charges a £3 or €3 fixed fee and adds between 0.4pc and 0.15pc depending on how much is being transferred, making it cheaper for large amounts. The others use the midmarket rate available at the time the conversion is made, so the rate you see can't be guaranteed. Midpoint has a £10 fee for amounts under £2,000 and a sliding scale of 0.5pc to 0.3pc for amounts over that depending on the size of the transfer. TransferWise and Midpoint publish estimated rates as you only get the market rate at the time of conversion which may be a day later. MoneySwap quotes its buy-sell rates on its site and charges a flat fee of $17 for transfers outside Hong Kong. The fee has less of an impact on larger amounts. By using the domestic bank in the country you're sending money to or from you sidestep the international banking payment system SWIFT which is expensive and slow. The exception is MoneySwap which does use SWIFT. Transfers generally take one or two days. You pay more for a priority same-day or next-day service. Before opening an account with any of these firms, check which currencies they offer. They tend not to have the wide range that brokers and banks offer. They don't offer the range of services you find with brokers - you can only take the spot rate, making it impossible to fix the rate with a forward contract.