The top 20 non-bank money transfer providers based in the UK now account for over £40 billion of foreign exchange per year, saving customers over £900 million annually, according to data compiled by FXcompared.
The FXcompared International Money Transfer Index (IMTI) incorporates data for mid-range transactions between £1000-£10,000 from all major banks in the UK, US, Canada and Australia.
The figures show the impact of increased competition from non-bank providers such as TransferWise and World First in the UK market and the dampening effect of competition on bank fees. While UK banks charge an average of 3.6% on a £10,000 transaction compared to an average of just 0.9% charged by non-bank providers, they still provide better value than their counterparts in other markets where licensing issues and regulatory hurdles have proved formidable barriers to entry.
UK customers save, for example, about 36% on a £10,000 transaction compared to sending the equivalent amount in Australia.
Nonetheless, for every £10,000 transferred internationally, UK customers are typically receiving just £9,640 worth of their foreign currency when using a bank, compared to £9,910 when using a non-bank provider.
FXcompared managing director, Daniel Webber, “The FXcompared IMTI will provide greater transparency for a fast-changing, growing industry that is experiencing big technology shifts as non-bank providers become more prominent. As the international money transfer market continues to change, this type of data will support the market’s development and help banks, non-bank providers and customers better understand the industry and make more informed decisions about moving money overseas.”