FX

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martyn94
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FX

Post by martyn94 » Mon 10 Apr 2017 14:04

There's an interesting piece in the Guardian about some leaked PowerPoint slides from an internal meeting at Bank Santander. They show how their staggering income from FX transfers would be slaughtered if people switched to lower-cost alternatives like Transferwise (their example on the slides).

It's here

https://www.theguardian.com/money/2017/ ... ansferwise

On their example, £10,000 from the UK to Spain, it would cost €64 using Transferwise, and €394 using Santander - €106 in explicit fees, and €288 buried away in the lousy exchange rate they give you. They were understandably concerned about losing a big slug of income, and almost cost-free profit.

When asked about it, Santander trotted out the bollocks you'd expect: many people really value paying an extra €330 flogging off to do it at their Santander branch, rather than grappling with the mysteries of the interweb from their sofa.

I guess that's an issue in a tiny minority of cases: but in the great majority it must be inertia and lack of information. If anyone here is still using banks to transfer money, you are being royally ripped off, and it's time to get your heads round something better.

But the nicest bit is that Santander's meeting was held in Andorra.
Last edited by martyn94 on Mon 10 Apr 2017 15:02, edited 1 time in total.

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Kate
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Post by Kate » Mon 10 Apr 2017 14:32

Soooooo agree....but unfortunately so many people are like me....I take the easiest option every time, not really from inertia (well, maybe just a little bit) but because I just don't get it - or want to spend the very small supplies of brain cells remaining on trying to understand something that I'm not interested in in the first place. I'm sure that I have lost hundreds and more over the years, just from sticking with the same bank or exchange company through lack of motivation to do the research or not questioning fees. I am exactly the kind of person the sharks circle cos they know that, through my own carelessness, I'm easy meat! :oops:

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Post by martyn94 » Mon 10 Apr 2017 18:11

Kate wrote:Soooooo agree....but unfortunately so many people are like me....I take the easiest option every time, not really from inertia (well, maybe just a little bit) but because I just don't get it - or want to spend the very small supplies of brain cells remaining on trying to understand something that I'm not interested in in the first place. I'm sure that I have lost hundreds and more over the years, just from sticking with the same bank or exchange company through lack of motivation to do the research or not questioning fees. I am exactly the kind of person the sharks circle cos they know that, through my own carelessness, I'm easy meat! :oops:
You don't have to be motivated, or do research. Just listen to Uncle Martyn, go to Transferwise on the web, or one of their apps, and take it from there. You of all people can't come over all feeble and say that you don't understand the interweb: you run a web forum, for God's sake.

Once you take the effort to put in your details as payer, and those of your payees (and I guess that most people, like me, have only one, or very few, regular ones), any subsequent transfer takes a couple of minutes.

Full disclosure: I have no connection with Transferwise, and I won't compensate you if they go belly up. I believe that some firms charge even less for larger transfers, but I no longer make transfers that big, so haven't bothered to research them. Once you have saved 80% of the initial cost, as in my example above, you start to run into diminishing returns.

martyn94
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Post by martyn94 » Mon 10 Apr 2017 18:32

Kate wrote:......,not questioning fees. I am exactly the kind of person the sharks circle cos they know that, through my own carelessness, I'm easy meat! :oops:
But that's what I hate about banks: the fees that they tell you about are the least of it. It's the gouging that they keep to themselves (the margins on their FX rates, or the commissions on their PPI, or the insurance on their mortgages, or the loading on overseas card transactions until very recently..). All the evidence is that they will try to get away with anything they think they can do from suckers like us. Even if you can't be bothered to save the money for yourself, it's your duty as a citizen to put your knee in their nuts to whatever small degree you can.

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Post by Kate » Tue 11 Apr 2017 08:42

Haha. Just because I run a web forum doesn’t mean I know what I’m doing!! After all these years, you should know that!!! :witch:

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Post by russell » Tue 11 Apr 2017 09:06

You don't have to do it online. I use RationalFX and request a transfer by telephone. The money is in my French account the next day.

Russell

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Post by martyn94 » Tue 11 Apr 2017 15:26

russell wrote:You don't have to do it online. I use RationalFX and request a transfer by telephone. The money is in my French account the next day.

Russell
I tried to check out Rational Fx on my iPad, but found that their site was a train wreck on that medium, which gives them zero points for professionalism. I will try to look on my proper computer later, but in the meantime....

I think that the balance of convenience depends very much on what you are doing, and what you are comfortable with. To make any FX payment, you first have to identify your payee - in Europe that means giving the payee's IBAN, a string of characters up to 34 long, which I would never dare try to do over the phone. Even if they would accept it that way, which in practice they don't in my experience. So you have to grapple with the internet to some degree (or, I suppose, write them a letter, whatever they are). If you've started that way, why not just carry on?

Once your payee is set up (as well as you as payer, obviously) I guess it's no less convenient, though no more, to do it by phone if you are only paying yourself here from yourself there. But 18 months ago, when my house here was being fettled up, I had a dozen payees set up on Transferwise (some being paid two or three times): it was a doddle on the internet, but would have been a nightmare over the phone. Even now, I have four different accounts that I pay into more or less regularly.

For myself, after quite a lot of transactions, I just feel more confident doing it on the internet. I have always had a subconscious fear (and I'm not alone) that my payment will zip off to Uzbekistan or somewhere, rather than ending up with my payee. On the internet, it's entirely down to me to get every detail right, which I do with anxious care. And that suits me.

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Post by martyn94 » Tue 11 Apr 2017 18:45

russell wrote:You don't have to do it online. I use RationalFX and request a transfer by telephone. The money is in my French account the next day.

Russell
I did eventually look at Rational FX on a proper computer. It seemed like the model of what I'd run a mile from. Very flash, with lots of stuff about what they don't do (ie charge you fees and commissions, as if that were new) and absolutely nothing about what they do do: ie charge you some particular amount for some particular transfer from A to B.

To get an actual quote, you have to fill in a web form with most of your personal details short of your inside leg measurement. I did it in the interests of science (on both their French and English sites) and have had no response a few hours later.

The killer for me is that they still deliberately conceal their take by building in an unstated margin into their FX rate, like almost everyone else. You could work out how big a rip-off that was, or wasn't, if you could find out what their rate is going to be (which I have tried to do, but failed) and compare it with the middle-market rate. But if you can't, you're just taking a punt.

If russell can work out from his contract notes that he has had outstandingly good deals, I am ready to stand corrected. But it seems too much like hard work for me, given the amounts I transfer, if I can use a strictly transparent provider.

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