If you’re an expat looking to send money to the Philippines, then you’re a rabbit in the headlights trapped into paying out sometimes extortionate fees.
Sending money around the world is not cheap because if you need to transfer the cash, then you are in a captive market and will have to pay whatever the going rate is to access your money.
The best you can hope for is stumbling across a company that will over a cheaper price than rivals.
Don’t hold your breath, though.
Banks and money transfer specialists all take advantage of the same infrastructure to send their cash between countries, so the base cost for a transfer is pretty much the same for all of them.
Even the exchange rates they are charged are similar.
The only real variable is a discounted rate they may receive because of the volume of money they transfer.
Look for savings
On top of the infrastructure charge comes the business cost.
This is the amount that where expats can find savings.
The business cost is the margin each bank or money transfer firm adds to the infrastructure cost – effectively this covers business overheads and provides the profit.
Search for money transfer to The Philippines online and hundreds of thousands of foreign exchange rivals are returned.
Choosing the cheapest can take time.
And cost is not necessarily the only factor to consider.
Speed, exchange rates and charges are important, but so is trust and security.
Some exchange bureaux adjust the exchange rate to mask the business cost.
TransferWise offers a solution
One newcomer that has taken the money transfer scene by storm is TransferWise.
The firm claims to charge lower fees than banks for cash transfers and regularly shifts money between Britain and The Philippines.
“Banks set their own rates to make money from you. We try to give a clear indication of the real rate and our charge for sending the money,” said a spokesman for the firm.
Typical fees for transfers of £400 or more are 0.5% of the amount sent in each transaction.
The minimum fee is £2.
TransferWise pledges not to include any hidden costs in the exchange rate and quotes transfer rates as the mid-market rate posted on Google, XE and other information sites.