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Common Money Transfer Terms Explained

Common Money Transfer Terms Explained

International money transfer companies like Flash Payments make sending money overseas simple. That being said, some of the terms frequently used in the money transfer process are not always easy to understand.

It's important to be clear on how international money transfers work before you agree to send money. Here we breakdown some of the most commonly-used language.

Currency Code

Countries have their own unique currency code, which is simply a three-letter abbreviation of their currency. For example, the Australian dollar currency code is AUD while in Japan the currency code is JPY, the USA is USD

When making an international money transfer you are always exchanging one currency for another. That makes it necessary to know the currency codes of BOTH countries, so you are able to research the exchange rate in advance. Shopping around to compare exchange rates is one of the easiest ways you can save money on your international money transfers.


This one is easy, 'forex' or 'fx' is just another way of saying foreign exchange!


'IBAN' is the abbreviation for International Bank Account Number. Unsurprisingly, you will need the recipient's bank account details to complete an international money transfer. IBANs are used by all EU countries, the EEA (European Economic Area), Switzerland and countless countries across the Middle East and Central America.


SWIFT and BIC are interchangeable terms that refer to the unique international bank code that helps identify banks around the world. Every bank in the SWIFT network has its own code that specifies who they are and where they are located. It is typically 8 to 11 characters long and is made up of a mixture of numbers and letters. When making a traditional international money transfer the SWIFT code is necessary to identify the receiver bank for the funds.

SEPA Transfer

SEPA stands for the Single Euro Payments Area and is used when making cross-border European bank transfers. SEPA was introduced to make it even easier to make EUR transfers between countries in the European Union.

ACH Payment

ACH is an acronym that stands for 'Automated Clearing House', which is a network that connects all banks and financial institutions within the United States. The ACH processes large volumes of credit and debit card transactions in batches. Examples of ACH credit transfers include direct deposit, vendor payments and payroll.


PayID is a service developed for and by Australian banks. It is designed to make sending and receiving money from your bank account easier, and does not require bank account numbers or BSB information. It works by creating a unique PayID and then registering it to your bank who will securely link it to your account. To receive money, simply share your PayID with the sender.

The Real Exchange Rate

The real exchange rate is where the banks buy and sell currencies from one another. It is the purest expression of the price of a currency pair. The real exchange rate is rarely where you will be able to exchange your money, however. Most transfer companies apply a mark-up, or fee, to the exchange rate to charge for their service.

The Mid-Market Exchange Rate

Also known as 'the real exchange rate'. See above.

Exchange Rate Margin

The exchange rate margin is the difference between the real exchange rate and the conversion rate a provider gives you. Think of it like an embedded fee. Depending on the money transfer provider you use this mark-up can range anywhere from 1.0% to 5.0%. Best practice is to choose a foreign exchange provider who tells you your conversion rate and exchange rate margin upfront.

Transaction Fees

Transaction fees, or transfer fees, are a lump sum that a provider may require you to pay upfront to organise your money transfer. This is separate to the exchange rate margin and is another cost you should consider when choosing an international money transfer service. Fees can range anywhere between $0-$30 depending on the company.

Receiver Bank Fees

Sometimes the receiver bank in the country where you are sending funds will charge a fee to process an incoming international payment. These fees are out of the control of money transfer companies.

Foreign Exchange Specialist

These are companies whose business is strictly making international money transfers. Unlike banks, which engage in a wide range of services in addition to currency exchange including lending, financial advisory and deposit gathering, these companies have a singular focus. Generally speaking, foreign exchange specialists offer more competitive exchange rates and superior customer service compared to large financial institutions.

Correspondent Bank

A correspondent bank is a bank in one country that is authorised to provide services for another bank or financial institution. For example, if you wanted to transfer money from Bank of America (US) to Deutsche Postbank (Germany) the money is first transferred to Deutsche Bank in New York, and they transfer the money to Postbank Frankfurt, who then route the money to your Postbank account. In this example, Deutsche Bank New York is the correspondent bank. Correspondent banks can often charge a fee for their service.


P2P stands for "peer-to-peer" and refers to a specific type of money transfer involving two individuals and their mobile phones. This is a very new type of currency exchange that does not require any more information except for the recipient's mobile number. This type of transfer can be used for sending money abroad or simply paying a friend back for dinner.

This list should be more than enough to get your comfortable with the terminology around international money transfers.

Flash Partners Pty Ltd (ABN 30 607 885 941) is regulated by the Australian Securities and Investments Commission (ASIC) as the holder of an Australian Financial Services Licence No 480834. We’re a registered independent remittance dealer and digital currency exchange provider with the Australian Transaction Reports and Analysis Centre (AUSTRAC), IND100512731-001. The information provided by Flash Partners on this website contains general advice. This advice has been prepared without taking your personal objectives, financial situation or needs into account. Before acting on this general advice, you should consider the appropriateness of it having regard to your personal objectives, financial situation and needs. You should obtain and read our Product Disclosure Statement (PDS) before making any decision to acquire any financial product referred to. @Flash Payments 2023.