Should there be more competition among international money transfer providers?

Should there be more competition among international money transfer providers?
20.11.2018 11:19 am

Should there be more competition among international money transfer providers?

Money Transfers

The BBC reports today** that migrants to the UK send £8bn to family each year. UNESCO calculate that the average transaction fees applied to international money transfers amounts to 7% of the total transaction. That means a whopping £560 million is lost to transaction fees every year. When you also consider that 30% of that money is sent back to get younger family members through education, it's a huge loss to those that are often required to work extremely hard to earn the money they send back in the first place. According to the Association of UK Payments Institutions, increased competition and lower rates would be available if regulators allowed more companies to compete in the market.

Following this report, money transfer comparison site, Xompare.com has run a rates and fees analysis to understand how money transfer providers listed on their site perform. In contrast to what has been reported on the BBC today, the analysis reveals that spreads for a low value Pound (GBP) to Indian Rupee (INR) transfer across all listed providers range from 0% to 2.5% , with the average spread across all providers being 0.92% .

David Noble, Co-founder of  Xompare.com says, "It is a common misconception that there is not enough providers to ensure competitive rates are offered to consumers, and in particular migrants sending money home. There is already fierce competition among money transfer providers and it pays to take advantage of this. The real challenge is not many people are aware of the options available to them Too many people focus on either the spread associated with a foreign exchange rate or the transaction fee, when in reality you need to focus on both. Ensuring you understand all of the fees involved in sending money abroad is key to getting the cheapest deal for international money transfer "

Tips from Xompare for finding the cheapest way to send money abroad:

  • Always compare money transfer providers and make sure you know the differences between rates and fees in order to choose the best deal for you.

  • Don’t assume that one particular provider is always the most favourable. Certain providers are either more or less competitive when considering the currency of the payment, amount being transferred, and the method of settlement.

  • Avoid transferring small amounts of money too frequently. Transferring large amounts less frequently will save you money on fees that are charged per transaction.

  • If you not in a hurry, keep an eye on fluctuating foreign exchange rates and time your money transfer when rates are in your favour.

  • Be mindful and pay attention to the total cost. The fees may be low but the exchange rate may be unfavourable or vise versa. Watch out for additional fees that may be incurred whilst your payment is in transit and remember that some money transfer providers will protect against these 'lifting fees’.

 

Related News

Genome is waiving service fees for all low-risk businesses as a support act during the COVID-19 pandemic

Genome is an Electronic Money Institution, licensed by the National Bank of Lithuania, founded in 2018. Specializes in online financial services for personal and business needs... Read more »

TransferGo and RDC partner to combat financial crime

TransferGo, one of the world’s fastest growing money transfer companies, today announced it is extending its partnership with RDC, the global leader in compliance screening.... Read more »

Paysend races to 1.5 million customers

International money transfer start-up reaches the 1.5 million customer milestone with over 3,000 new users every day.

UK-based fintech Paysend announced that their... Read more »

Azimo and Ripple Partner to Deliver Faster, Cheaper Payments to the Philippines

Azimo, Europe’s leading digital money transfer service, announced today that it has partnered with ... Read more »

WorldRemit Enters Global Remittance Partnership with Alipay

WorldRemit has announced a partnership with Alipay, enabling consumers to use the WorldRemit app or website for cross-border remittances to the Alipay app, bringing more... Read more »

Top five UK money transfer markets receive more than £10bn

New analysis reveals the top five money transfer markets for UK residents that account for nearly one third of the total sent home

New analysis by Paysend, the UK based... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel