WASHINGTON—Although wire transfers might be the quickest and most convenient way to send money, the transactions remain exorbitantly pricey, especially when it comes to international transfers, Fintech News reported.
In fact, the World Bank’s Q1 2021 Remittance Prices World Quarterly report found that banks remain the most expensive type of service provider when it comes to remittances, with an average cost of 10.66%.
Banks surpass post offices, with an average cost of 8.79%, money transfer operators (MTOs) (5.43%) and mobile operators (3.12%).
Edgar, Dunn & Co. estimates that each year, $150 billion is unknowingly spent in hidden fees on foreign currency transfers. These fees are either extracted through an exchange rate markup, or a rate markup plus additional fees, Fintech news explained.
The same 2021 research further shows that only 4% of surveyed bank customers understand what they are being charged in these transactions.