Expats dread changing their money between currencies because they always suspect they could find a better deal.
That’s one of the problems of sending money to a popular expat haunt like Thailand.
So many banks, money transfer companies and bureaux de change are competing to change your pounds into baht that finding the best foreign exchange rate is almost impossible.
TransferWise tries to be refreshingly different from the rest by giving examples of what other providers charge to compare against their rates.
The company explains that expats should suspect something is up as soon as they see the words ‘no fees’ or ‘zero commission’.
Watch out for FX gains
Everyone knows there are no free lunches, so these firms must be taking a cut somewhere along the line or they could not pay their bills and make a profit.
That’s a simple fact of business life – no money in equals no cash flow and no profits.
“Awareness of what the advertising is telling you is the key to unlocking the real cost of sending money around the world,” said a TransferWise spokesman.
A phrase to look for in the small print is ‘FX gains apply’ or something similar.
“That means instead of charging customers a fee or commission, the money transfer agent is setting an exchange rate that gives them a profit on every transaction,” said the spokesman. “You may not be paying a fee or commission, but you are paying to send your money to Thailand.”
A fairer way to convert cash
So how does TransferWise charge customers?
The company bases currency exchange on the mid-market rate, which is the sweet spot between the currency buy and sell rates used as a benchmark by financial institutions.
That allows the customer to benefit from the best available exchange rate.
Then a fee is applied depending on the currency. These fees vary between currencies and are published on the TransferWise web site.
Working out how much baht you get for your pound is then easy – some simple arithmetic with the mid-market rate and add the fee and that’s it.
Transferring the money to Thailand is also straightforward.
Just send the money from your sterling account to your Thai bank account and the money should arrive between one and four banking days, depending on the currency and where you are.
“Security checks we have to make because government regulators set the rules slow the process down a bit, but as much as we would like to, there’s nothing we can do about them,” said the spokesman.
Get a quote and send money now to Thailand by clicking here