XE.com - Hidden Transfer Fees

I don't know if this is something that is limited to XE.com or is across the board with all providers.

I transferred HK$185 to someone in Hong Kong and used XE.com because they appear to have no fees for transactions of this size. I setup the transaction then subsequently realised that the bank in HK would charge an additional HK$60 to receive the fund so I contacted XE.com to add it on. This was not a problem as they have yet to send the money.

After a couple of weeks, there appeared to be no money sent to the HK account so I requested a trace. From the trace I was told only HK$5 reached the account as the HK$240 was all deducted in fees (primarily SWIFT fees).

I was surprised because there was no warning of fees at the time I made the transaction. Yes, they do have terms and conditions which talk about intermediary fees (which I subsequently read) but I thought it would be sensible to prevent people from making transactions where the money will be eaten up in fees.

I was told over the phone that the bank they use (Bank of New Zealand) frequently change the pathway they use to send money so the fees change all the time. Regardless, I thought they could at least warn people about the possible fees, especially for common destinations where they have lots of transaction experience.

Has anyone else had similar experiences? And what platform have you used to ensure that the receiver actually gets the exact amount you wanted to send?

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Comments

  • +4

    Next Time try https://transferwise.com/au. You can specify the amount in recipient currency. I have tried Euro, US$. These worked well for me.

    • Thanks ranap, I did look into transferwise, ofx and currencyfair. They all seem to do the same thing and charge either a small fee or no fees on their end. However, there's very little to no information on what fees are charged on the way and prior to the reciever getting the funds. Is it normal to not know the exact amount that the reciever will get in their own currency?

      • +1

        Don't know about the others but on TransferWise, I have done bank to bank transfer and you can see clearly how much is the fee and how much the recipient will receive.

  • Read page 24 of their PDS - all such fees are fully detailed.

    • Thanks Ocker, I did read that afterwards but I was expecting some warning at the time of the transaction especially for small transactions like this one. Yes, they say they can't predict the exact fees but a warning at least? Or even some examples of recent fees so you can add some padding to your transfer to ensure the full amount arrives?

      Is this something all providers have or do some have a better arrangement that ensures they know the exact amount that the reciever will get.

  • It is not the providers that charge the fee, rather the receiving bank take the fee before paying the recipient. It is a form of compensation for missing out on foreign exchange commissions - basically the same as the 3% fee most credit card companies charge on overseas transactions.
    The fees varies from receiving bank to bank, and also the routing method the remitting institution uses.
    For example, if the recipient is USA based and the remitter's bank send the funds to the receiving bank from their own USA bank account, via the domestic wire system (CHIPS) then the receiving bank will most likely not charge a fee. If the remitting bank sends via the international transfer system (SWIFT), then a charge will mot likely be levied.
    Long story short - you have little chance of knowing if a fee will be charged, and what that fee will be.

    • I appreciate that, it just seems weird that this isn't expressly stated when you transfer money. It sounds like you shouldn't use any of these companies if you want to the reciever to get an exact amount of money.

  • Can you paypal pay things like this. I assume they take about 3-5% FX margin, but for such a small amount, its probably worth it.

    • The seller's platform wasn't setup properly for international deliveries so they took the purchase on card but the delivery fee they asked me to send it to their bank account.

      After this debacle, I got them to setup a "shipping product" on their site so I can pay for that using card. But I never thought it was going to be this complicated given the process on XE.com was quite seamless.

  • If Citi has a branch in the location you’re sending to, open a Citi account here. They transfer money from Australia to accounts at their other branches for no fee.

    My wife (who is from the U.S.) still has some accounts etc which she pays every month. We put the appropriate amount of AUD into an Australian Citi account and then transfer it to our U.S. Citi account. It is transferred almost straight away, and at least overnight, and there are no fees.

    We did a bit of research before we decided on this method, but it came down to Citi staff both here and in the U.S. saying that this was their recommended way. No other bank seemed to have an interest in helping us with the problem. There are not huge sums of money involved, but Citi had a solution already worked out.

    And no, I still don’t have Citi as my main financial institution.

    • Thanks Kandrew, I needed to transfer to someone's Bank of China account but still really good to know for the future. I’m just surprised that in this day, telegraphic transfers are still expensive and convoluted.

      • Sorry, I missed that bit in your post.

        I wonder if there’s a Bank of China branch in Australia.

        Alternatively, transfer to the Citi account and then do a direct debit to the account at the Bank of China. That’s effectively what we do each month as none of my wife’s accounts are paid to a Citi account. We have had to set up direct debits.

        (And I was shocked to discover in 2012 when we began this, that a direct debit in the U.S. meant someone would get a checkbook (sic) and write the check (sic), put it in an envelope, put a stamp on the envelope, and finally post the ‘letter’. Things have developed a little - for some accounts - since then. But only for some.)

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