There is something very important you should know if you are looking to send money from one country to another. Many very well-known companies claim to offer a ‘zero per cent commission’ or ‘free’ international money transfer service for people and businesses sending money abroad.
‘0% Commission Money Exchange’ – The Real StoryBefore we examine the real story behind these 0% claims (and before we get to a rather nice picture of a lovely unicorn) let’s address one key issue: There’s no such thing as a free lunch. We all know that banks and financial institutions have offices to maintain, staff to hire, and other such expenses. In fact, every business in the world, big and small, has bills to pay. Yes, even CurrencyFair. This simply means that any business claiming to give you a 0% commission for international currency exchange is not telling you the truth. And we don’t like it when companies tell fibs. But don’t take our word for it.
The Sunday Times Reveals The True StoryLet’s see what the UK’s influential Sunday Times had to say about the matter:
A currency website is offering rock-bottom foreign exchange rates that are lower than the wholesale rates the banks charge to buy and sell from each other. CurrencyFair, Britain’s first peer-to-peer currency service, brings together people who want to exchange 17 different currencies, including the US dollar and euro. The website allows users to buy and sell currency, avoiding fees.Ok, yes, we included that part of the article because it made us look good but here’s the heavy stuff . . .
For example, buying €500 from CurrencyFair would have cost £425 on Thursday, including its £3 fee, while the Post Office was charging £435. Banks can be even less competitive: NatWest was charging £446 for the same amount even though it advertises a 0% commission.We’re sorry. We’re sure that they’re lovely people over at NatWest but let’s see that quote again:
Banks can be even less competitive: NatWest was charging £446 for the same amount even though it advertises a 0% commission.So remember, whenever you see a bank or financial institution trying to claim that they are not charging you any commission on your currency transfer, be on guard. If these institutions can convince you that they are being wonderfully generous with their ‘free’ transfers, they’ll probably soon start trying to convince you that there is a small group of unicorns living in the trees at your local park.