Bank customers are paying over the odds for foreign currency transfers

 

Andrew Hagger of Moneycomms.co.uk reveals the latest research which shows that high street bank customers are getting a raw deal when it comes to sending foreign payments overseas.

Consumers simply don’t realise that there are cheaper alternatives available and are confused by the combination of uncompetitive exchange rates and transaction fees levied by the banks.

Even though some providers claim to offer a fee free service the wide variation in bid-offer spreads charged in FX transactions often represent the major hidden cost to retail customers

As well as a variation in exchange rates to consider, for the man on the street, the situation is further complicated as many of the banks charge an additional fee on top.

The research below was carried out by MoneyComms on 19^th September and shows how much extra a consumer could pay if using their own bank to send the money overseas.

The difference between the cheapest option to send 1000 US$ (FairFX) and the most expensive (Western Union) comes out at £39.34.

In isolation these sums may not sound that much, however when you consider some people with property overseas or children studying and travelling abroad are transferring funds every month to cover costs, the annual savings could be well in excess of £400 in some cases.

It has been reported previously that up to 90% of transactions are still conducted through the banks, so there is a huge amount of money to be saved if only consumers took advantage of deals from some of the new breed of online brokers such as FairFX and Caxton FX.

				Exchange   rate 1000 Euros		Fees		Total		Difference
Provider
FairFX FairPay				1.1680		£0.00		£856.16		0
Caxton FX				1.1552		£0.00		£865.65		£9.49
HSBC				1.1601		£4.00		£866.00		£9.84
Travelex				1.1512		£0.00		£868.66		£12.50
Western Union				1.1583		£6.90		£870.20		£14.04
NatWest				1.1580		£10.00		£873.53		£17.37
Post Office				1.1410		£0.00		£876.35		£20.19
Lloyds				1.1630		£17.50		£877.35		£21.19
Halifax				1.1630		£19.50		£879.35		£23.19
Nationwide BS				1.1659		£25.00		£882.71		£26.55
Barclays				1.1490		£15.00		£885.32		£29.16
Santander				1.1602		£25.00		£886.91		£30.75
AVERAGE				1.1577		£10.24		£874.02		£17.86
Provider			Exchange   rate 1000 US$		Fees		Total		Difference
FairFXFairPay			1.5830		£0.00		£631.71		0
Travelex			1.5770		£0.00		£634.12		£2.41
Caxton FX			1.5661		£0.00		£638.53		£6.82
HSBC			1.5722		£9.00		£645.07		£13.36
Post Office			1.5455		£0.00		£647.04		£15.33
Lloyds			1.5772		£17.50		£651.53		£19.82
Halifax			1.5772		£19.50		£653.53		£21.82
NatWest			1.5740		£22.00		£657.31		£25.60
Nationwide BS			1.5772		£25.00		£659.03		£27.32
Barclays			1.5544		£25.00		£668.34		£36.63
Santander			1.5488		£25.00		£670.64		£38.93
Western Union			1.5476		£24.90		£671.05		£39.34
AVERAGE			1.5667		£13.99		£652.33		£20.62