With more and more people living and working overseas, it's not just when you go on holiday that you have to think about transferring currency these days. However, despite this fact it can often seem like the whole process is more confusing than it's ever been.
Every time you are quoted what, on the surface, looks like a good rate, you have to make sure there are no further charges or hidden fees to pay. If ever you are promised a 'free transfer' or 'no commission' you would be advised to be aware that there's really no such thing.
All banks and currency brokers have to make money somehow, and despite the way currency exchange is often sold to consumers on the surface, they all do it the same way.
Banks deal at what's known as the 'interbank rate', sometimes referred to as the 'mid-market rate', and you'll be quoted a rate at a small margin from that interbank rate, otherwise known as a 'spread'.
The greater the margin from the interbank rate, the greater the profit the currency company will take, and the worse deal you'll get. Typically, a foreign exchange company will take a smaller 'spread' than the big banks.
Sometimes an inferior rate can be masked by other promises, or conversely, a better rate may have extras put on top of it adding to your costs.
It is estimated that £300million is wasted every year in the UK on fees paid to make currency transfers, and we think enough is enough.
At World First we are pushing for greater transparency in the foreign exchange industry, and for a better understanding about how currency companies make their money. With that in mind, it was decided we needed to do something to make our pricing easier to understand, and we stopped charging fees on any personal transfers from the UK, starting from December 2013.
It's important that consumers are able to make genuine comparisons between the different companies based on pricing and service. To help make it clearer for the growing number of customers who need to send or receive money from overseas, we are calling for others to follow our lead.