With the value of the £ ebbing away at roughly the same rate as our confidence in the UK political system, getting the best deal on foreign currency exchange suddenly seems all the more important.
After fees, £1 transferred into either $s or euros is not far off 1-for-1. Every penny counts.
Suddenly, there are some new kids on the block in the currency transfer market, making it even harder to choose how to transfer funds overseas.
Whatever you do, don’t go to your bank. That’s £25 gone for no reason at all.
But with so many new challengers cutting out the high fees, it can be time-consuming to shop around.
Now the under-cutters are being under-cut, it’s worth taking another look to satisfy yourself that you are getting the best deal (and bypassing those greedy, over-charging banks).
Truthfully, there is little to choose between many of the new-ish platforms such as TransferWise and Xendpay in terms of cost.
TransferWise, the pioneer under-cutter of bank transfer charges, charges 0.5% on transactions over £400, with a £2 minimum fee.
CurrencyCart, which announced this week that it would donate 50p to Save the Children for every transaction made through the site, uses ‘real-time’ rates to obtain the best deal for their customers. It’s fees are based on volume – the more people that transfer through the site, the lower the fees for everyone, with a range between 0.1% (higher volumes) and 0.4% (lower volumes).
Xendpay is completely free, operating a Pay What You Want model (explained in the below video)
A new player has just entered the market – Lebara Money – focusing on the migrant money transfer market and offering a “like it, lock it” feature, which allows people to lock in the rate they want for up to 30 days.
The savings using a rate-lock are dependent on timing, but can be substantial. For instance, someone planning in June to send £1,000 home to India in July could have locked in a pre-Brexit rate on June 22 and been £147 better off when the transfer was made on July 6. Of course, the reverse can be true with a rate lock, and you could end up losing out if Sterling rebounds. But it’s a useful feature in volatile times.
A fee of 0.5% to 1% (dependent on destination) is charged when locking the rate, but the money to be moved is not required until the date of the transfer.
Selma Ribica, Director of Lebara Money, said: “Before now, only large corporates and wealthy people moving huge sums of money around the world have been able to lock in competitive exchange rates, despite the more fundamental need migrants have for such a service, even if they are moving much smaller amounts. As our first step in meeting the financial needs of migrants across the UK and Europe, the unique Lebara Money transfer service is a good example of how we will make our customers’ lives easier and save them potentially hundreds or even thousands of pounds.”
Ratheesan Yoganathan, Founder and Chairman of the Lebara Group said: “Launching Lebara Money as a dedicated service for the migrant community is an important step for us and for the people we serve. Migrants have distinct financial needs that are often poorly served currently, if even recognised by the mainstream industry. We are excited about solving these needs for our customers and look forward to adding new, additional products to the Lebara Money transfer service in the future.”
Meanwhile, FairFX says that if you find a cheaper transfer elsewhere, it will refund you the difference: the “Fair Pay Price Guarantee”.
With HIFX, transfers are free over £3,000 and under £3,000, you pay £9. This works out at 0.3 per cent if you are transferring£2,999, but significantly more expensive for small transfers. HIFX majors on the slickness of its services rather than the rates.
