Consumers paying over the odds for currency transfers

Published by Mark King on 14 October 2013.
Last updated on 14 October 2013

Exchange rates

High street bank customers are paying over the odds for sending foreign payments overseas, according to Moneycomms.co.uk.

Moneycomms.co.uk said that even though some providers claim to offer a fee free service, uncompetitive exchange rates represent a "major hidden cost to retail customers."

On top of this, some banks also charge additional fees for foreign currency transfers.

The difference between the cheapest option to send $1,000 overseas is £39.34, with FairFX the cheapest (it would send £631.71 after fees and exchange) and Western Union the most expensive (£671.05).

"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," said Andrew Hagger of Moneycomms.co.uk.

"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."

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

 

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