Many Canadian consumers are aware that they are paying an exorbitant amount to get their hard earned money back to their loved ones and friends abroad. What most don’t know is just where during the transfer process they are losing their money. The answers may surprise you…
The Rate that is posted on the international money transfer service may not be the actual exchange rate between countries that exists on the open market. Money transfer companies typically state very clearly on their websites that the transfer rate paid may not necessarily represent the exchange rate posted on sites as Google or Yahoo Finance. This difference can result in up to a 10% up-charge that your bank or money transfer service is benefiting from. If you’re sending $10,000 per year, that’s potentially $1,000 you are paying just on the currency exchange.
Many transfer companies come with either daily limits or transfer minimums. If you exceed the daily limit (in most cases only $2,500 you can still make transfer’s, however, you must do so at a higher rate. Vice Versa many companies require that you transfer at least $1,000 in order to receive the rate that you were originally quoted otherwise, you guessed it, higher fees.
Some companies and at least one of the big Canadian banks claim to have ‘no fee’ for transferring money internationally. However, they have significantly marked-up their currency exchange rate so what you appear to be saving with their ‘no fee’ you are more than making up for in bloated currency rates!
Due to a lack of competition, the fees that banks and money transfer companies have been able to get away with for years have been fundamentally unfair to consumers. The costs associated with their out-dated infrastructure and ‘banking culture’ are passed on to their customers through service fees. However, a new wave of lean Canadian and global Fintech companies are changing the game in terms of offering lower and more transparent fees, ‘real’ exchange rates, security, and first-class customer service. What was once available through only a few providers is now going to be readily available to the consumers across Canada.
VoPay is preparing to disrupt the Canadian Banking and money transfer scene when we launch in 2016, and we will change the long-standing rules of money transfer. We will offer a much faster, more affordable, secure online money transfer option that will cause all competitors in the marketplace to take notice. It will be interesting to see what response will come from large money transfer companies and the Big 6 Banks who will no longer hold a monopoly over North American consumers.
The real message here for those looking to transfer money abroad is to consider looking at alternative money transfer options before making your next transfer. You want to ensure that you’re transferring your money for the most affordable, most convenient means necessary. With the rapid change happening in the Fintech industry, it’s becoming apparent that your best options for International Money Transfer may lay outside of the banks and companies you are currently using.
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