Note the ....*In addition, the currency transfer market is unregulated and customers may question whether funds could be at risk with such services. *... in this article from the Financial Times.
Deal of the Week: Low-cost online currency transfers
By Steve Lodge
Published: January 30 2009 20:05 | Last updated: January 30 2009 20:05
What’s the deal?
HiFX, a currency transfer specialist, has launched an online service for sending modest amounts of foreign exchange overseas at low cost.
The internet platform allows users to transfer the equivalent of £250 to £10,000 at what it calls “discounted” exchange rates and with no commission or other charges.
Currencies that can be transferred online are: US dollars; euros; Australian, Canadian and New Zealand dollars; and Dubai/UAE dirham.
Rates vary slightly with the amount transferred – with better deals on larger sums – but HiFX says they are within 0.4 per cent of the wholesale “spot” market.
Users lock in to “live” currency rates that are updated online every six seconds. Payment for transfers is by sterling debit or credit card. The firm also covers any charges made by receiving banks.
Is this good?
HiFX says the service offers a better deal than the banks and undercuts online platforms from Western Union and PayPal.
It says banks typically worsen exchange rates by 4 per cent, as well as charging exchange and transfer fees. Some other firms also pass on fees levied by banks for receiving transfers.
The service could be useful for overseas property owners wanting to pay bills abroad, or for individuals sending money to family.
The live rates offer an opportunity to take advantage of currency volatility, buying on short-term rate improvements.
From the autumn, the service will also allow users to set “limit orders”, where transfers are triggered if the rate hits a pre-set level.
What’s the catch?
The service is initially limited to six currencies and only transfers from sterling. In the autumn, users will be able to transfer foreign currencies back into sterling.
HiFX does charge users paying on credit card an extra 1.2 per cent.
In addition, the currency transfer market is unregulated and customers may question whether funds could be at risk with such services. HiFX says it uses a segregated account for client monies and has indemnity insurance. Transparency of rates and charges can also be an issue with currency firms. To compare different services, HiFX says users should ensure they consider the final cost including charges – rather than just rate.
What’s the alternative?
Caxton FX is launching a similar online service in March that will allow transfers as low as £10 in 16 currencies. Transfers worth less than £50 will incur a £1 fee.
Citibank offers its customers fee-free euro transfers and payments to third-party accounts in Europe. There are no costs at all for transfers from euro accounts but those from other currencies attract a charge of up to 2 per cent.
How do I find out more?
www.hifx.co.uk
www.caxtonfx.com
www.citibank.co.uk
Money Transfer Agents - Covered by the FSA?
Originally Posted by IanR
