Cheap foreign currency transfers, 2018 update

Back in 2013 I last wrote about using peer to peer providers to transfer money from the UK to France, and in particular I looked at Transferwise and CurrencyFair in comparison to Moneybookers (now Skrill) that I had used up to then.

I concluded that the peer to peer services provided a better rate of return, and that I would be using them going forward.

Earlier in the month I needed to transfer £500 to my French bank account in order to pay the property insurance. In the last few years both Transferwise and CurrencyFair have introduced mobile apps to make it even easier to convert and send your money, and when I found that the Transferwise app on my iPad wasn't working I uninstalled it and reinstalled it to fix the problem.

Once working I thought I'd look to see what other iPad money transfer apps were available, I'd give them a spin, and see whether any of them offered me a better rate or transfer amount.

So here's my experience of this very limited test.

Remember, the requirement was to transfer £500 into Euros. I decided that if there were any fees on top to be paid then I'd reduce the amount I was transferring as needed, so in all cases I would be spending exactly £500.

First up Transferwise, their iPad app is easy to use, for my £500 I was offered a rate of 1.251 and £3.54 of fees, meaning I'd end up with €558.57 in my French account.

Next, CurrencyFair. They don't have an iPad app, only an iPhone app, so on my iPad it has to be stretched and I have to tilt the screen 90 degrees to be able to use it (I have a cover with integrated keyboard on my iPad so this is a pain to use). They offered a rate of 1.1198 inclusive of fees, resulting in €559.90.

Then I looked for some other companies to try and found 3 more:
WorldRemit. Their iPad app enabled me to check the rate before I created an account (nice, not everyone did this), and their rate was 1.1162 with £2.99 fee on top meaning my £500 gave me €555.88 into my French account.

Azimo. I couldn't do anything with their iPad app until I had firstly registered with them (boo), but they did offer me the first transfer fee-free. Their rate was 1.11307, the transfer fee would have been £1 (but first one free remember), so I'd have ended up with €556.54.

And finally, Small World. They have a proper iPad app (hurrah), but it's stuck in portrait mode. As my iPad in its cover is permanently in landscape this means a cricked neck when you use it - Grr.
Anyway, next to one side, I didn't need to register first to get a quote (good), and it was a healthy 1.12 exchange rate, the best so far, mind you there was a £5 fee on top of that which would have evened things up if they too hadn't had a first-transfer-free policy as well.
So with them I was getting €561.84, the best overall.

And so tempted by this offer I registered with Small World and made my transfer through them. Of course for money laundering requirements I had to upload a photo of my passport which was easily done through the app, and I waited. Next day they verified my documents, the transfer went ahead, and 2 days later the money was in France.

In summary for £500 to €:

Transferwise	€558.90
CurrencyFair	€559.90
WorldRemit	€555.88
Azimo	€556.54
Small World	€561.84

So not a massively scientific test, but it does show that there is value in shopping around.

Two weeks later as I write this Blog post, I've just been through all the apps again to see what they now suggest I would get. Here's the second set of results, again for a £500 transfer:

Transferwise	€565.62
CurrencyFair	Couldn't give me a quote as the markets close at 8pm Irish time on Friday's
WorldRemit	€561.45
Azimo	€559.27
Small World	€563.20

My conclusion is to probably remain with TransferWise and CurrencyFair as my preferred options, although I have used TransferWise the most over the last few years. I will try the others maybe one or two times more and might keep Small World as a 3rd transfer option.

We're talking about money, money

Musical introduction
Paraphrasing the lyrics from "Money's Too Tight To Mention" from the great Mick Hucknall of Simply Red (who my wife Liz has a real crush on -- I think its the red hair), "We're talking about money, money", or to be more accurate, "We're talking about money transfers, money transfers", but since this doesn't have quite the same rhythmic structure to it, I doubt that anyone has written a song about transferring money from one country to another.

Moneybookers the story so far
I wrote in 2007 about the benefits of Moneybookers for easy (and cheap) foreign currency transfers, giving step by step instructions as to how to use their service and I've used them now for many years to transfer money from the UK to my French bank account, and I've stayed with them when Moneybookers increased their transaction fees in 2008 as they were still cheaper than the high street banking alternatives.

But I think its now time to change allegiance.

The internet world moves on and Moneybookers rebranded themselves a couple of years ago as Skrill, but the domain name and the service all remained the same so all was good.

However in February 2012 Skrill/Moneybookers wrote to me to advise of changes to their terms and conditions. Most significant of which is that they've introduced an 'inactivity fee' of €1 per month if you haven't logged in or made a transaction using your Skrill account within the previous 18 months. This inactivity period was then reduced from 18 to 12 months in December 2012 so I can see the trend happening here ...

OK, so I have to regularly login to my Skrill account to avoid the inactivity service fee, but is it still good value for money?
Last month I needed to transfer £1000 to my French bank account so I thought I'd review whether I was still making the best choice for my foreign currency transfer.

First up, I bank with Nationwide Building society, so I thought I'd see what Nationwide would charge for an overseas Swift transfer, but the website didn't actually tell me, and I had to phone up to find out what the interest rate applied would be!

Nationwide would charge £25 for the transfer and offered me a transfer rate of 1.191, meaning I'd get €1161.23 paid into my French bank account from my £1000.

Next I looked at Moneybookers/Skrill, Skrill offer the wholesale exchange rate minus 2.49% and then charge £1.48 on top to withdraw funds into a Euro account.

I had to do a bit of math to convert the Skrill exchange rate from Pounds per Euro into the reverse Euros per Pound, take off the 2.49% exchange rate loading, and the withdrawal fee and I worked out I'd get €1192.14 for the same £1000 - i.e. €31 more.

Better, but can I improve on this exchange rate?

The new big thing in the world of money transfers is peer to peer
The principles of peer to peer money transfers are dead simple, instead of using a bank to transfer your money from one currency to another, you find someone who wants to transfer money in the reverse direction (from Euros to Pounds in my case), and just like you might do in and old fashioned marketplace you swap the money between yourselves. In truth this is no different to how the financial institutions emerged from the Coffee houses of 200 years ago, but now accomplished using the internet to bring buyers and sellers together to swap money between themselves.

There's an article explaining how peer to peer money transfers work over on the Quidco blog, but since the article is written by TransferWise who offer a peer to peer service, you can also read a less biased report on 5 ways to transfer money abroad on LoveMoney.com.

So trying them out for real, I looked in more depth at CurrencyFair and TransferWise, both of which offer a very similar service.

TransferWise is the simplest, you enter how much of what currency you want to convert, the recipient bank account details to transfer the money into, you're given an indicative exchange rate, and if you accept it your conversion is 'booked'.
You then transfer the money from your bank account into your transferwise account, and once your money arrives the transaction is done.

Last year I tried TransferWise for the first time and it worked pretty well. There was a slight hiccup because when the money was transferred from my UK account into my TransferWise account they couldn't associate the deposit with my account because my transferwise account had been created in my name whereas our bank account is in joint names. I guess its due to money laundering regulations that they check that the account names match, but a quick email giving the full names on all the accounts sorted the problem out and the transfer was done.

TransferWise now accept debit cards for payment so it's now even easier to transfer money in just one step.

For £1000 TransferWise offered me an exchange rate of 1.2146, there was a fee of £4.48 to transfer the money into my French bank account, so in total I'd receive €1209.16 - an increase of €17 on top of Skrill, a welcome improvement.
(NB: Looking today on TransferWise the transfer fee now seems to have increased slightly to £4.98 so the difference will be less)

This time though I thought I'd try the other big peer to peer transfer service, CurrencyFair. CurrencyFair offer a very similar 'QuickTrade' service whereby they do the matching, or they offer a 'Marketplace' service where you can actually see what other currency swaps are being offered and either accept one of them or request a different rate, hoping that someone else will decide to take you up on your offer.

CurrencyFair's QuickTrade offered me a rate of 1.2114 with a €3 transaction fee to deposit the money into my French account, so I'd receive €1208.40, but as I said you can try to better that in the Marketplace so I thought I'd give that a go.

First step in the process was that I found that I had to record the different currency holding accounts in CurrencyFair. I needed to create GBP and EUR accounts and then deposit the required GBP with CurrencyFair before I could try to do a transfer, but it didn't take too long to do this, setup the transfer details from my bank, and thanks to same day transfers the money arrived at CurrencyFair within about an hour.

With the MarketPlace you can nominate what rate you want to convert the money at, so I thought I'd ask for 1.2160 which was slightly better than the QuickTrade rate and would have netted me €1213 if it had matched successfully.

15 minutes later my trade was matched, but unfortunately not for the full amount, I was only partially matched but at least my first £204.97 was now converted to €249.25.

Result!

Unfortunately I then watched for the rest of the day as the market dropped and the rates offered on CurrencyFair slid slowly downwards, until at 8pm when the market closed and my conversion request was cancelled.

Next day I tried again, requesting the same conversion rate of 1.2160, but by then this wasn't a competitive rate and my trade sat there all day unmatched until 5pm in the afternoon when I cancelled the request and booked the best rate on offer at that time, 1.2000, converting my remaining £795.03 into €954.03.

So over the two trades and after paying the €3 transfer fee I managed to receive €1200.28 into my French bank account which duly arrived a day or so after initiating the transfer out from CurrencyFair.

So in summary ...
Firstly its clear that TransferWise and CurrencyFair offer a better transfer rate than my previous favourite Skrill/Moneybookers, although in my case it wasn't a massive difference - €17 or 1.4% more currency, but its worth remembering that all of these still beat the high street banks hands down.

Secondly you have to look carefully at the fees and exchange rates offered. TransferWise charges you a fee in Pounds (£4.98), CurrencyFair's fee is in Euros and is lower (€3), but when I was doing my transfer CurrencyFair's exchange rate wasn't quite so good, so this eliminated the fee difference.

Thirdly, by using the CurrencyFairs's Marketplace that shows you real time exchange rates offered by other customers you can get an even better rate, or if the market is sliding away from you, you won't, and locking in to a guaranteed rate earlier in the day could have been a better option.

With both companies your money should be safe, CurrencyFair is regulated by the Central Bank of Ireland and TransferWise by our own FSA.

In conclusion I suspect I'll continue using CurrencyFair and TransferWise for my foreign currency transfers, and will close my Skrill account if I'm not going to use it.

PS: Here's the full lyrics to Simply Red's "Money's too tight to mention"

Nationwide backtracks on transaction charges in Europe from 1st November

Nationwide FlexAccount changes

In April 2009 I covered the news that Nationwide had started charging for overseas card transactions, but fortunately had still kept European cash withdrawals and debit card payments as fee free - which I was delighted about as we'd had occasion to use French cash dispensers when we didn't have enough Euro's in our French bank account.

Well I am really upset to learn the news reported on MoneySavingExpert that Nationwide has killed this and will start charging for all overseas transactions from November 1st this year.

Nationwide will introduce a new 2% payment handling "loading" fee for European currency and it will introduce a £1 fee per cash withdrawal.

Currently there is no loading fee and there is no cash withdrawal fee so it's a double whammy if you go and get €100 out of the cash machine.

The society tries to sweeten the deal by providing free European travel insurance if you pay in at least £750 per month, which is a nice-to-have benefit but is only worth £50 to £100 for a typical family. Splash the plastic a lot and you could be worse off.

MSE advises looking at their analysis of cheap credit cards for foreign spending (which includes Nationwide's credit card which isn't going to introduce these fees) and switching to another card provider. Think I'll be taking this advice.

Nationwide drops its no fee policy for overseas card transactions

Nationwide overseas card charges

I've written a few times about different aspects of Banking in France, like the shock of having to pay bank account charges in France, using Moneybookers to transfer money to my French bank account and trying to work out whether it's cheaper to use paypal or visa to pay an overseas bill.

I haven't blogged though about my other favourite French Financial trick, my Nationwide FlexAccount debit card.

When we were over in France at Easter I realised that we were imminently going to run out of oil in the central heating tank and despite having used Moneybookers to transfer over a load of money before the holiday, I could see we weren't going to have enough Euros to pay to fill the tank up.

So all I did was to go to the nearest cash dispenser (which happens to be in the pretty floral town of La Cheze, just 2 miles from the Gite), and withdraw a few hundred Euros, then pay the withdrawn cash into my French bank account at the post office (which seems to involve an awful lot of form filling in for what is a simple task, but that's French bureaucracy for you!)

With pretty much any other bank or building society you'd be slapped with an overseas card handling charge for withdrawing cash from a UK bank account whilst overseas. And heaven help you if you make a cash withdrawal with a UK credit card because as well as the overseas handling fee you'll get charged a cash withdrawal fee and interest from the day you take the cash out.

Fortunately up until now Nationwide with its 'proud to be different' motto has absorbed any charges that the overseas bank or Visa may have levied and all you pay is the transaction amount converted to Sterling - and the conversion rate is usually pretty good as well - certainly much better than you would get if you went to a travel agent. So the Nationwide FlexAccount debit card has been long recommended by financial websites for overseas spending.

But all that's changing and from the 6th May 2009 Nationwide will start passing on the Visa overseas transaction fees it pays, at the rate of 0.84%, but rising to 1% in July 2009.

There are some exceptions though, and the first and most important is that for European card transactions there's no change - whether you withdraw cash in a Spanish ATM or pay for a romantic hotel booking in Italy with your FlexAccount card you still don't pay any additional fee. And so of course for me therefore there's no charge for French cash dispenser withdrawals (phew).

Secondly, if you have a Nationwide cash card (not debit card) then there's also no overseas charge as these cards are issued by MasterCard, but don't hold your breath as it's likely that these will also start incurring a fee soon as well.

There's more details of the overseas fee and precisely which countries Visa (and hence Nationwide) charge an overseas transaction fee on the Nationwide website along with more general advice about using your Nationwide card abroad.

All is not lost however and despite these fees for non-European withdrawals the Nationwide card still comes out significantly cheaper than many of the rival banking providers. There's further details and a comparison of overseas ATM withdrawal costs on the Lovemoney (ex Motley Fool) website.

Moneybookers - free foreign transfers - 7 day offer

Moneybookers - Cheap inter-country transfers

I've written about Moneybookers before on this Blog, back in July 2007 when I explained how to setup an account for low cost international money transfers (roughly 1.80 EUR per transfer), and in November last year when I noticed that Moneybookers had slightly increased their transfer charges.

Today I received an email from them MoneyBookers telling me that they're refunding all transfer transaction fees for the next 7 days - either the next upload of funds (which is free from the UK) or overseas transfer, whichever comes first.

Seeing as I was thinking of transferring some money over to France anyway to pay for our forthcoming Easter holiday spending and to cover the monthly payments of electricity, water, local taxes and changeover cleaning fees, I acted a bit quicker and transferred some money over straight away.

I know it's only a few Euros saving but as the man on the telly says, "every little helps" !

PS: Offer only runs for the next 7 days so be quick !

Which is cheaper - Paypal or Visa?

Just now I was paying for some video editing software I bought off ebay from an Australian seller and as I reached the paypal checkout page and saw the option to choose how the foreign currency amount would be converted I got to wondering (and Googling) as to which would be cheaper - Paypal or my credit card?

For overseas card payments you're offered the option of either letting paypal do the foreign currency conversion (which is the default) or letting your credit card do the conversion.

Thinking that I was bound to be being taken advantage of with the Paypal default I thought I'd do a bit of research into the two options, and was pleasantly surprised.

I bought the Ulead Video Studio 10 software for AUS $17.90 including Airmail shipping to the UK.

Firstly I found from my bank's credit card terms and conditions (helpful copy I found online) that they "will change the amount to sterling at the exchange rate used by the payment system and will charge 2.95% of the value of each foreign-currency transaction".

Then I Googled across a very useful Visa Exchange Rate calculator that lets you choose your credit card currency (GBP), the purchase currency (AUS $), enter your bank fee (2.95%), and in return are provided with a handy little print-out-and-put-in-your-wallet exchange rate table as a ready reckoner for when you're overseas.

Today Visa's exchange rate for AUS$ to GBP is 2.16 to 1, which means that with the bank fee my purchase will cost £8.53.

In comparison Paypal offered to charge me £8.37 using their own AUS/GBP exchange rate of AUS $2.13665 to £1.

So even though Visa was giving me a better exchange rate this was more than wiped out by the credit card overseas handling fee.

I thus paid with Paypal and saved myself 15p which I will be investing wisely !

By the by, the video editing software is so that I can try over the Christmas break to put together for our website some videos of our Brittany Gite. Next up I need to buy a firewire card ... so I'm back off to ebay for that purchase ....

Moneybookers increases its foreign currency transfer fees

Moneybookers - Cheap inter-country transfers

Oops!

I noticed the other day that I'd gone overdrawn in my French bank account to the tune of €160 and as I've only got a €200 overdraft limit and the French banks get really unhappy if you go overdrawn a quick international funds transfer was needed.

As usual I'm using Moneybookers for transferring money to my French bank account, as I wrote about last year.

In the intervening year it seems that Moneybookers have increased their fees though, back in July 2007 they were charging £1.30 to withdraw funds into a French account, it's increased slightly now to £1.60 per withdrawal. They've also changed the foreign currency exchange rate they use from European central bank daily interbank rate plus 0.95% to an unspecified "wholesale exchange rate" plus 1.75%.

Overall these two changes mean Moneybookers isn't such fantastic value as it used to be for overseas transfers, but I still believe it's good value when compared to the £10 or £20 that the high street banks would charge for an international SWIFT transfer.

Hassle free and cheap foreign currency transfers with Moneybookers

Moneybookers - Cheap inter-country transfers

One internet service that I've not written about before, but use several times a year for our French home is Moneybookers for transferring money to my French bank account.

Our French bank account is with La Poste (the French Post Office) and although we don't need lots of money in the account we do need to pay for direct debits and cheques such as electricity and water bills, council tax (taxe de habitation/taxe fonciers), pay our agents that look after the house, etc.

So periodically we need to transfer money over to France from our UK bank account.

If you go into a UK bank and ask them about transferring money over then you'll often get quoted a poor exchange rate and have to pay a £15 or £20 bank transfer fee. Given that we knew we'd need to transfer money over on a semi-regular basis we were keen to find a more cost effective manner and after a bit of searching came across Moneybookers which we've been using successfully for over 3 years now.

Here's how it works:

Moneybookers acts as an electronic bank which you can transfer money into and withdraw money out of. The clever bit is that it has interconnections to banks in 30 or so different countries so you can transfer money directly in and out of bank accounts in any of these countries for free. The list of countries directly supported is quite extensive and includes most of Europe including the UK, France, Spain, Germany, Switzerland, Portugal as well as USA, China, Brazil, India, Singapore, Australia, etc.

The fees vary slightly depending on the countries concerned but are almost all free to deposit money and either £1.30 or £2.40 to withdraw funds depending on whether you want the money transferring direct into a bank account or paid out by cheque. In addition any foreign currency exchange is converted at the European central bank daily interbank rate plus 0.95% - a considerably better rate than you would get from a high street bank.

Transferring money to my French bank account using moneybookers is a straight forward four step process:
1. From my UK bank account I firstly transfer the required funds into my moneybookers account as a manual standing order payment
2. When the money arrives in moneybookers I receive an email telling me my account has been credited (this is usually 3 or 4 days after I sent it)
3. I then login to moneybookers and request a withdrawal of my moneybookers account balance into my French bank account
4. About 4 or 5 days later the moneybookers withdrawal arrives in my French bank account

Setting up the service is pretty straight forward, here's a summary of the process:

Once you've registered your moneybookers account you need to create a standing order from the source bank account (which in my case is the UK but can be any of the 30 or so countries moneybookers operates in).

Click 'Upload' and you'll be presented with four different ways of crediting your moneybookers account - I use Bank Transfer (which is free) or you can use Maestro/Switch which is also free, or credit/debit card (1.9% fee):


Use these details to setup a standing order from your UK bank account - which must be in your name (for compliance with anti-money laundering regulations).

Next you need to setup the corresponding withdrawal facility within moneybookers to your French bank account (or wherever else in the world you want):

Click 'My Account', then 'profile' then 'Manage' (next to 'List of bank accounts'), and 'Add'.

On the next screen choose the country your destination bank account is in (so France in my case) and enter the bank's details:



Click 'Next', then enter your account details:



And that's it!

In the 3 years or so I've been using moneybookers I've had no problems at all, the only thing to be aware of is that by having to transfer your money via moneybookers as an intermediary it can take up to 2 weeks from start to finish to clear into your French account, but considering the savings over other transfer mechanisms I consider this an acceptable compromise - you just have to be organised enough to transfer funds before you need them!

---

Categories: France, Banking

Cheaper overseas bank charges promised by SEPA

SEPA is coming!

Since 2000 the European Central Bank has been working towards SEPA (The 'Single Euro Payments Area') which we're promised will be delivered early in 2008.

If you've ever tried using your credit or debit card abroad then you'll realise that most banks treat this as a licence to print money and charge you outrageous fees for the audacity of using your card abroad. Fees vary (and have increased in recent years) with most providers adding around 2.75% to the purchase price and converting the currency at a less than favourable rate.

That's of course if you can get your UK card to work at all overseas. If anything chip and pin has made things worse when you take your card abroad as the UK has been first to implement the new European standard you can often find that your card not accepted outside of the major towns and cities. We've had this problem ourselves with our UK cards not being accepted at French 24 hour petrol stations, and although the situation is improving and we still see other UK drivers sometimes struggling to get their cards to work.

Anyway, SEPA promises to change all that with "a single set of euro payment instruments" and "efficient processing infrastructures for euro payments".

Even though we don't use the Euro in the UK, SEPA should usher in a new era of more streamlined, simpler and more efficient debit and credit card payments, both whilst travelling abroad and for European visitors to the UK. As well as finding your cards more widely accepted the big advantages should be increased acceptance of overseas cards in the Euro zone (and vice versa) and reduced card handling fees.

SEPA isn't going to happen over night but the end goal is that you should be able to trade overseas as easily as you can trade in your home country with flexibility to make payments, receive cheques and setup direct debits with our European colleagues as easily as we can in the UK.

For Gite owners like myself it may in the long run mean that I no longer need to keep a French bank account to pay my utility bills and council taxes from, and I can manage everything from a single domestic bank account.

The first phase of SEPA comes in January 2008 and it's progressively being implemented through to 2010.

For more details there's lots on Google, but three I picked out are a SEPA overview on silicon.com, the European Central Bank's SEPA homepage which describes progress towards the vision and "All you need to know about SEPA" from Albany software.

In the meantime a cost effective option is to have a Nationwide Building Society credit or debit card, they promise not to charge any handling fee for any of their cards if you use it abroad - further details of their Overseas card promise on the Nationwide BS website.

French Bank Charges

Grumble, grumble

Just received a bank statement from La Banque Postale (aka, La Poste, whom we bank with) and see that we've been charged our annual debit card fees of €24.50 for the first card and €12.25 for the second card.

The story of how we ended up with banking with La Poste (the French Post Office) is a long one (summary is that I felt at the time that they had the cheapest banking fees) and the story of actually managing to open an account was an even longer one (which I will get around to regaling on the Blog at some stage), but since we've been with them all in all it's been a fairly trouble free banking existence. I've even managed to get one of the bank cards replaced after it stopped working and successfully sorted out issues like forgetting my online pin number and having to get it reset.

All in all things have gone fairly trouble free and we're fairly happy with them.

Of course we don't use the account all that much, really for spending money when we holiday in France and for paying the regular insurance, electricity, water, council tax, etc bills through. When we opened the account we decided to have a cash/debit card each and so of course we get charged two sets of card fees (with the second one at 50% reduction).

For English readers who don't have a French bank account it may come as a surprise to talk about paying charges for having a bank account, but in France it's just a way of life (taxes are of course the third love of the French after Wine and Bureaucracy). All bank accounts levy charges for the service they offer which vary on whether you want a debit or credit card, whether you want remote access to the account by telephone, minitel or internet, and by what kinds of service they offer you (you pay more for accounts with higher cash withdrawal limits for instance).

As I said we went for the cheapest bank and also the cheapest type of account (limits of only €500 cash withdrawal or debit card spending per week). As well as the annual card fees (which have slowly crept up from €33 for the two cards in 2004) we also pay what I think is an annual account fee which was €4 for 2006.

Of course in the UK we can still benefit from free banking but with all the talk of banks being forced to reduce their overdraft fees I'm sure we'll see annual fees like this being imposed soon on our side of La Manche ...