UK banks have cut charges on small foreign currency transfers over the past three months by almost 22 per cent, most likely owing to increasing market competition, according to recent market data.
The drop in bank charges benefits those making regular international transfers, such as sending money to a relative abroad or paying for services on an overseas property.
The figures from the International Money Transfer Index (IMTI) show that even with the drop in charges, banks are still charging three times more than specialist currency brokers. For example, for £1,000 transactions UK banks charge 4.8 per cent (down from 6.1 per cent three months ago) while specialist firms charge 1.6 per cent.
The IMTI is put together by intelligence and comparison service FXcompared and incorporates international money transfer data from all major banks in the UK, US, Canada, and Australia. This monthly data is then compared to the cost of using a nonbank provider.
Daniel Webber, co-founder of FXcompared, said: “It is likely the reason we have seen such a sharp drop in the amounts banks are charging is down to competition from currency brokers.”
“There is still a very big difference between what you pay to a bank for moving money overseas compared to what you would pay a broker,” he said.
Globally, the IMTI has shown that UK customers save more on international money transfers compared to the US and Australia, with Australia being the most expensive.
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