Consumers remain confused about the costs of sending money abroad, something which could be leaving them out of pocket.
Research conducted by YouGov for provider TransferWise found that just one fifth (20%) of people understand how the exchange rate they get is calculated.
This is despite European Union legislation requiring providers to avoid “non-transparent pricing methods”.
Few people understand that the rate charged by their bank will be worse than the interbank exchange rate quoted on Google and currency websites such as XE, TransferWise says.
In addition, while over half (59%) of consumers say they trust their bank to inform them of all costs upfront, just one in 10 (10%) were able to correctly identify foreign transfer fees when prompted.
Just a quarter (26%) of people say they found it easy to compare the cost of making an international payment across providers.
The Money Advice Service has previously published guidance to help consumers send money safely.
‘Consumers are clearly confused’
Kristo Käärmann, co-founder of TransferWise, says: “Consumers are clearly confused when it comes to foreign currency charges and who wouldn’t be when you look at how banks present the information?
“Even though there’s Europe-wide legislation requiring transparency in foreign exchange, most banks are wilfully disregarding this, preferring instead to hide the true extent of their charges in a poor exchange rate.
“It doesn’t seem too much to ask that people are told upfront what charges they will have to pay. The European Commission can help by requiring providers to disclose all charges upfront including any within the exchange rate. That would mean that consumers are able to make an informed choice.”
If you’re travelling abroad this summer, you might find it cheaper to spend using a specialist overseas credit card. Read the Moneywise guide to find the best cards for overseas spending.