19 September 2017
visit www.avoka.com

Brits lose £600m a year on money transfer fees says new money transfer comparison service

05 September 2017  |  3378 views  |  0 Source: Monito

Monito, an online money transfer comparison tool, today launched into the UK market, reveals that banks and expensive money transfer services are costing UK residents more than £600 million each year in excessive international transfer fees, a significant portion of which are hidden.

According to Monito’s study, based on more than 100,000 pricing data points1, UK residents are paying more than four times more money in fees and hidden exchange rate margins than they would if they were to use the cheapest money transfer option available to them.

The latest data from the World Bank shows that money transfers from the UK amounted to approximately £18 billion in one year2, with the top six money transfer destinations being (i) India, (ii) Nigeria, (iii) Pakistan,(iv) France, (v) Germany and (vi) Poland. Together, these countries receive more than half of all outgoing money transfers from the UK.

It’s not just UK banks that are hiding money transfer fees. PayPal, a leading provider of digital payment services, charges a high percentage fee and an additional fixed fee if you use your debit or credit card to pay for the transfer. A considerable amount of money is also lost in the currency conversion each time you convert money, PayPal takes a hefty margin on the exchange rate.

Commenting on these figures, François Briod, co-founder and CEO of Monito, said: “There is a serious issue around the transparency of money transfers and these figures demonstrate this. Banks always tell you their charges if you ask them, but they will generally not be able to tell you the fees charged by intermediary banks handling the transfer, or by the bank receiving the transfer. In some cases, you don’t even know the exchange rate that will be applied. For example, you may be able to see the current exchange rate, but that might not mean it will be the one applied to your transfer. There is a real lack of understanding regarding the price consumers are paying to exchange currencies, hiding up to 50% of the total costs of money transfers. And as the euro and sterling are set to gain parity for the first time, consumers need more value for money than ever.”

However, companies like Monito are seeking to change this unfair situation by helping those sending money abroad to save money on hidden international transfer fees. Created to remedy the lack of transparency within the money transfer space, Monito ranks services based on cost, speed, and trustworthiness.

Monito has collected the total cost (including fees and the margin taken on the exchange rate) of sending £200, £500, £1,000 and £5,000 from the UK to India, Nigeria, Pakistan, France, Germany and Poland, the six biggest recipient countries of personal transfers from the UK.

The data shows the cheapest online providers to send money to a bank account, alongside providers allowing the money to be collected in cash on the other side, as well as the cheapest and most expensive banks. The data also includes PayPal where available. The full dataset, which includes the cheapest bank, the most expensive bank, as well as an average cost for all the banks for which we have data available, and accompanying infographic can be viewed here.

Francois Briod continued: ‘The costs speak for themselves. The differences in price for transferring the same amount of money varies hugely. For example, when transferring £5,000 to France, the cheapest option, Lebara Money, only costs £1.21, whereas HSBC charges £188.41 - that’s more than 155 times greater.”

Cost variations are due to the complex pricing structures of money transfer providers, who make a profit from transfer fees (which have a fixed and variable component) and on the exchange rate margin. The contribution of these two components to the total cost will change over time and depends on how much consumers send. As a general rule, money transfer companies will take lower margins on the exchange rate and apply lower (or even zero) transfer fees for larger transfers.

Francois Briod continued: “The only way to fix the issue of extortionate fees is to push UK banks to be transparent with how much they are charging and where that money is going, we also need to let consumers know that alternative services do exist and that they can get a better rate if they go elsewhere. Money transfers can be complex, but we’re working to provide the tools to help people navigate this complexity.”

Comments: (0)

Comment on this story (membership required)

Related blogs

Create a blog about this story (membership required)
visit www.sibos.comvisit www.temenos.comvisit www.vasco.com

Top topics

Most viewed Most shared
JPMorgan Chase chief says he would fire traders dealing in bitcoin for stupidityJPMorgan Chase chief says he would fire tr...
10475 views comments | 16 tweets | 29 linkedin
Equifax hack: Visa and Mastercard flag 200k compromised credit cardsEquifax hack: Visa and Mastercard flag 200...
9820 views comments | 6 tweets | 17 linkedin
iPhone X gets Face ID for Apple PayiPhone X gets Face ID for Apple Pay
8909 views comments | 11 tweets | 22 linkedin
Dutch bank sentences teenage DDoS culprit to community serviceDutch bank sentences teenage DDoS culprit...
8835 views comments | 6 tweets | 3 linkedin
HSBC switches on selfie payments in ChinaHSBC switches on selfie payments in China
8296 views comments | 19 tweets | 39 linkedin

Featured job

Competitive
New York, NY - USA (some flexibility on location)

Find your next job