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In a week full of whisteblowing, an internal Santander memo reveals Santander charges six times more than fintech startups for international cash transfers, accounting for 10% of the banks global profits in 2016. The bulk of the profits come from the "FX margin" rather than fees directly charged to the customer.
“It’s a massive consumer rip-off, but the Santander document doesn’t surprise me. What does surprise me, is how long they’ve been able to get away with it. This is a major issue – three-quarters of consumers who regularly send money abroad can’t work out the final cost when fees are factored into the exchange rate. Consumers and businesses are losing £5.6bn a year in the UK because of rate mark-ups.” Research by Guardian Money in August last year confirms how expensive it is to use a high street bank to transfer money overseas. We found that when transferring £200 into US dollars NatWest would give us $229.31, but TransferWise would offer $260.95 – nearly 15% more.
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