According to new research released today by online money transfer service TransferWise, a majority of Singaporeans who transfer money overseas use their bank but three in four people don’t know the true cost of sending money overseas – which includes both upfront fees and an exchange rate markup.
Commissioned by TransferWise, an online survey of more than 1,000 people was undertaken by research agency Toluna in December 2017
Singaporeans prize transparency of fees when they send or receive money abroad, and many believe their banks have been clear about the costs. The survey revealed that close to 75 per cent of people believe banks make it easy to understand the true cost of overseas money transfers. However, 88 per cent of Singaporeans underestimate how much fees are charged for an overseas money transfer (based on the example of sending S$1,000 to Europe or the US).”
TransferWise Head of Banking, Lukas May said, “Singaporeans are savvy consumers. These complex fees for international money transfers hide important information from consumers and Singaporeans don’t get the most value out of their transactions – whether they are sending money to support loved ones abroad or investing overseas.”
“On a scale of what matters most to them when transferring money, more than half of Singaporeans ranked transparency regarding fees and charges more highly than price.
“However, our research has found that people in Singapore are not aware of hidden costs of international payments. In fact, Singaporeans could be paying up to five times more than necessary when making money transfers abroad (based on the example of sending S$1,000 to countries such as Australia, Malaysia, Germany, Hong Kong, India, the UK and the US).”
Research by TransferWise also included price comparisons for money transfers from Singapore to abroad across the major financial institutions, which revealed that on average Singapore banks charge S$30-40 for upfront fees and exchange rate markup for an overseas transfer of S$1,000.
TransferWise commissioned price comparison research for money transfers across major providers including Citibank, Development Bank of Singapore, HSBC Standard, OCBC, PayPal, Standard Chartered, UOB and TransferWise. Countries include Australia, Germany, Hong Kong, India, Malaysia, UK and US. This data was obtained independently by market research company Consumer Intelligence in November 2017.
In particular, Development Bank of Singapore (DBS) is the cheapest of major bank providers when accounting for upfront fees as well as exchange rate markups. Whereas Standard Chartered and HSBC are the most expensive.
Payments company PayPal has the highest exchange rate markup compared to all other providers – more than 4 per cent across all routes and transaction amounts. Citibank is the bank that offers the highest exchange rate markup for overseas money transfers.
The research also revealed that it was most expensive to send money to India, followed by Australia and then Hong Kong, across all amounts of money to transfer.
Lukas added, “Many banks tell their customers they only pay a small upfront fee for international payments, but in reality customers pay much more through poor exchange rates.
“We want to equip customers with all the information they need so they can pick the most transparent, secure and cost-effective option when making overseas money transfers, especially as more Singaporeans are travelling and living abroad.”