Home Economy Money transfer clients losing out by not shopping around
Just one in three money transfer customers shop around and pay the price
Only one in three customers transferring money abroad are shopping around for the best rates and fees, despite an increase in currency volatility, and could be wasting as much as £30 each time they send money overseas.
The new research from financial services market research experts Consumer Intelligence highlights the benefits of comparing rates and fees.
The study among consumers who have made money transfers in the past six months found 30% research the market, while the vast majority stick with their favourite provider.
Part of the reason for not making comparisons is that most money transfer customers use services infrequently – the survey found 70% sent money overseas twice in the past six months.
However recent currency volatility underlines the need to compare exchange rates on offer – the pound has dropped around 17% against the US dollar and 12% against the Euro since the EU Referendum last year with further volatility expected.
Consumer Intelligence’s study found sending £250 to the Eurozone would cost £20.82 more with the most expensive money transfer service provider, compared to the cheapest, while transfers in US Dollars cost £30.42 more.
Consumer Intelligence’s data shows almost all consumers transferring money to the US – the most popular destination for UK money transfers – convert their cash into dollars before sending. This offers security in the knowledge of what will be received, rather relying on a good rate at the destination bank.
More than half (55%) of those transferring cash believe the amount of money received is more important than the amount spent, highlighting that they do not focus on rates and fees.
Andrew Buller, Banking and foreign exchange director at Consumer Intelligence, said: “Money transfer providers are clearly delivering good services for customers given the low rate of shopping around and the high levels of loyalty.
“The key reasons given for switching provider by those who do move include speed of service and website functionality, along with better rates and fees. So price is not the only factor.
“However customers should consider switching, and focus more on exchange rates when transferring money as currency volatility can make a major difference.”
The majority of transfers made by consumers surveyed were for sums lower than £500, and the most popular method was online via a laptop or desktop computer which was used by 56%. Around 25% transferred money in a branch.
The most popular providers included Western Union, PayPal, Barclays, Halifax, Post Office, Lloyds Bank, HSBC, TransferWise, NatWest and Santander.