Do banks provide international money transfer services free of charge?
Sadly, it’s not the case; banks are generally recognised as one of the most expensive options when it comes to moving money internationally; second only to using cash, according to the World Bank’s Data.
Mobile money apps are cheapest, certainly when it comes to sending smaller amounts, and that is because they use the latest disruptive technology, which is cheaper to use than the outdated systems the banks are using.
Money transfer is just not a core service for banks, and as a result, customers using them lose out on the exchange rate, on the fees, and even on the length of time to complete the transaction.
If further proof were needed, research completed by TransferWise in Australia provides it. TransferWise has calculated that, last year, Australians spent more than $3.9 billion on fees for sending money overseas. Of that figure, an incredible $3.1 billion was wasted on unnecessary fees, bank charges, and added expenses applied by banks or money transfer agencies.
That works out at approximately $167 dollars per Australian adult, or $513 per family. Pretty amazing, when you consider that these fees are almost entirely avoidable, say TransferWise, who completed their study in association with the firm Capital Economics.
TransferWise discovered that more than a million Australians still believed that banks did not charge for sending money abroad, and that 67% of the population still preferred to do their overseas transactions using their bank. One in five (18%) believe that banks charge a single, upfront fee, and half do not understand how banks use exchange rate margins to turn a further profit.
TransferWise is certainly one of the most competitive and best ways to send money abroad in terms of fees (around $2 dollars to send $200 or more overseas), exchange rates (you always get the rate you can find online, not one skewed in the transfer agencies favour), and speed (1-2 days is common).
If you want to be absolutely certain you are getting the best deal, of course the logical thing to do is compare all of the different providers, but who has time to do that?
Well, using The Money Cloud’s comparison engine, you can do it in seconds flat. Whether its TransferWise, Azimo, or a regulated broker for larger amounts, we have compiled a selection of the world’s best brokers, for your convenience.
Paying exorbitant fees for sending your own money to forign parts is completely out of sync with the way that modern banking should work. If we are doing our job properly, soon, it will genuinely become a thing of the past.
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