You can save money by using Xe for international money transfers instead of the banks. We recently ran a survey on money transfer habits. We found out that a staggering 74.8% of you choose the bank when you’re sending money internationally.
The numbers don’t lie
We decided to do a little cost comparison between money transfers from Xe and several banks around the world, including Westpac in New Zealand. We calculated how much NZD you would need to transfer with Xe and with Westpac in order to receive $10,000 USD.
The results? A $327.42 NZD difference in how much you need to transfer to receive the same amount—and you’ll spend less money by transferring with Xe.
You’ve had an account with your bank for years, they’re trustworthy, and your money feels safe with them. So it’s a no-brainer to take advantage of their money transfer services, right?
Time to reconsider?
It might not be as quick, easy, or cost-effective as you might think. We have previously described in other content why transferring with Xe is easier and more convenient than using the bank, with reasons including:
- Fees & other costs. The money you’re transferring isn’t all you can expect to pay. When you transfer with the banks, in addition to the service fee for your transfer, you’ll also likely be charged additional fees from intermediaries and other parties that handle your transaction. And that’s not even getting into the exchange rates…
- Transfer speed. This will vary depending on where your money is going, but limited bank hours and the numerous intermediaries that your money will likely travel through could mean longer travel times for bank transfers.
- Options. Though some banks offer online or over-the-phone money transfer services, the majority of them will require you to come in during business hours to initiate your transfer. And once you’re there, you may not see the same variety of money transfer options, or your bank could impose limits on how much you can transfer.
Let’s focus on the exchange rates. Do you get different rates when you transfer with banks as opposed to an online money transfer provider like Xe? Are the banks really more expensive? Let’s look at the numbers.
Why are the banks more costly?
We’ll start with the exchange rates. Money transfer providers are free to set their own exchange rates, and many providers—banks included—often choose to add margins to their exchange rates that will bring additional profits to them, at the cost of a worse exchange rate for you. On average, the exchange rates offered by banks will be 4-6% above the mid-market rate at the time.
But that’s not the only place you’ll see extra costs. Bank transfers function by sending your financial information from bank to bank through the SWIFT system. While the SWIFT system does ensure transfer speed and security, banks pay multiple fees to utilize the SWIFT system, and these fees will trickle down to you.
Let’s break it down. When you transfer through the banks, you can expect to pay the following in addition to providing the amount you want to transfer:
- Money transfer transaction fee
- Intermediary fees (the amount will vary depending on how many banks your transfer travels through)
- Incoming transfer fee (for your recipient)
- The hidden margins added to your exchange rate.
Is this the first you’re hearing about these costs? You will be informed of the upfront transfer fees, but many banks aren’t transparent about the fees hidden within the transaction—meaning that you won’t know how much you’re paying until you’ve already done it.
What do you pay when you transfer with Xe?
At Xe, we make it simple for you. You won’t be surprised by any hidden third-party fees after you’ve sent your money. The amount that you pay when you confirm your money transfer is the amount that you can be sure you’re paying.
You and your recipient are better off taking your money transfers to Xe. Not only will you get more for your money, but you’ll know exactly what you’re getting and how much you’ll be paying.
Does that sound good to you? Sign up for a free account today to send transparent, cost-effective money transfers.
Sending money from another country? Check out our comparisons between bank and Xe money transfers from Australia, Canada, and the United Kingdom.