Money Insider: How sending cash overseas is getting much cheaper - Spend & Save - Money - The Independent

Money Insider: How sending cash overseas is getting much cheaper

 

Transferring money overseas is a market that has been dominated for years by global banking institutions and established players including Western Union and MoneyGram.

There have been frequent customer gripes that the service is too slow and exchange rates used and fees levied make the transactions too expensive.

Fortunately the market place is changing. In the past 18 months we've seen some enterprising new entrants, with the likes of Azimo and CurrencyFair offering much cheaper money transfer options.

Overseas workers, retired expats, international students and foreign property owners are just a few of the groups that have benefited, and can now transact more cheaply thanks to this fresh competition.

Azimo recognised that migrants and UK expats send billions of pounds overseas each year, and has developed an online service which enables you to send money to 125 countries throughout the world.

The service gives the customer a range of options including payment direct to bank accounts, to mobile phones or for cash collection at more than 150,000 global locations.

The minimum transfer value is £50, and users can send up to £900 without need for ID verification. Lower overheads mean that transfers via Azimo will be charged at between 1 per cent and 2 per cent, compared with existing bank and wire services that frequently charge between 4 and 8 per cent. As a result, Azimo claims you could save up to £30 on a £300 transfer.

Another relative newcomer is CurrencyFair, an online, peer-to-peer market place which matches currency-exchange demands. It cuts out the hefty bank margins and results in customers having access to exchange rates very close to the wholesale rate.

Even though banks often offer "free" international money transfers or 0 per cent commission, the loading on the exchange rate is often a stealth charge and used to make a tidy profit on these transactions.

These new companies have lower overheads than the bigger players, and are able to pass on further cost savings by offering a direct service and cutting out some of the middlemen.

In much the same way that peer-to-peer lending is starting to nibble away at the UK savings and borrowing market, these new money-transfer options will appeal to price-conscious consumers looking to embrace new technology to obtain a cheaper deal when sending money overseas.

Santander student account could be just the ticket

The battle to win a decent share of the student-banking market has started early this year, with Santander unveiling details of its latest account package last Monday.

It's usually around mid-July when the new crop of student deals are announced, but Santander has been quick off the mark with an offer that may appeal to many teenagers heading off to university for the first time this autumn.

The new student account comes with an interest-free overdraft facility of up to £2,000, although looking at what was available from the other banks last year, interest-free borrowing limits of up to £3,000 were available, so that's worth bearing in mind.

However, the incentive that Santander is offering to new students could well be the deal clincher for many of the 2013 fresher intake. All new accounts opened since 24 June are eligible for a free, four-year 16-25 railcard, a sweetener that could prove a real money-saver to those students intending to use the railways to get to and from college.

The railcard will save students a third on their rail fares and an average of more than £170 per year, according to the Association of Train Operating Companies.

I'll take a more in-depth look at student bank accounts in a few weeks, once all the banks have shown their hands.

Andrew Hagger is an independent personal finance analyst from moneycomms.co.uk

Independent Partners: Bank beating exchange rates and no hidden

fees on all your international payments. Find out more

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
peopleThe report and photo dedicated to the actress’s decolletage has, unsurprisingly, provoked anger
Property
Home body: Badger stays safe indoors
property
PROMOTED VIDEO
News
The programme sees four specialists creating what they believe are three perfect couples, based on scientific matchmaking. The couples will not meet until they walk down the aisle together
tvUK wedding show jilted
Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Sport
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Arts and Entertainment
Robin Thicke and Pharell Williams in the video of the song, which has been accused of justifying rape
music...and he had 'almost no part' in writing it
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Sales Executive

    £20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

    Payroll & Accounts Assistant

    £20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

    SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

    £280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Senior BA - Insurance **URGENT**

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week