£18bn transferred out of the UK each year
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 £600m 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 £18bn in one year two, 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.
“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 per cent 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.”