Market Research: Money transfer providers
What did we compare?
Sending money overseas can cause headaches. Rates and fees can be expensive and the process can be lengthy. However, the recent rise of web-based money transfer platforms has increased competition and encouraged some of the old hands to improve their offerings. We called three different organisations to get a feel for how each organisation handled a request for a quote.
We enquired about money transfers with a bank (Kiwibank), a broker (OFX) and a transfer agent (Western Union). To set a standard, we asked the operator to quote for a transfer of 10,000 New Zealand dollars to British Pounds on the 2nd February 2017. As foreign exchange rates can change every second this article is not meant to report on who has the cheapest rate. We include and discuss the rate but the main purpose here is to describe the experience of ringing each organisation.
The purpose of this market research was to approach each provider over the phone with exactly the same request and see how they handled it. Was it easy the way it should be? Did we feel valued as a customer? Or was it the opposite.
Comparison Table: Money transfer quotes
|How long to get a quote?||1 minute||1 minute 15 seconds||6 minutes|
|Time of quote||2:17pm||2:40pm||2:27pm|
|Time to completion||2-3 business days||2 business days||3-4 business days|
Bank - ANZ
Kiwibank had a real person on the line within 30 seconds and were able to provide an indicative quote within a minute. So full marks for speed but the rate was indicative, meaning that you do not get your exact rate until you actually execute. Their staff member was well-informed about the transfer process and happy to help. Kiwibanks’s international team’s phone lines are open Monday to Friday, 8.30am to 5.00pm NZT.
The rate quoted was 0.5663 which was the second best of the three rates. They charge a $20 fee if the transfer is done via internet banking or $25 if you visit the branch. There could also be a fee from the receiving bank in the UK. Hence for an outlay of NZD10,020 you would get GBP5,663.
You have to have a Kiwibank account to use their money transfer service and the transaction will take 2-3 business days to complete.
FX Broker - OFX
With OFX we were speaking to a real person within one minute and had received a quote within a minute and 15 seconds. The knowledgeable operator was quick to provide a quote and the phone call took less than three minutes. OFX also have a 24/7 free phone line.
The rate quoted was 0.5691, making it the best rate of the three. Transfers of NZD10,000 and over do not incur any fees so for an outlay of NZD10,000 you would receive GBP5,691. An added bonus of the OFX service is that you can secure a rate over the phone i.e. if you ring for a quote and like the rate you get you can fix it there and then.
You have to setup an account with OFX before they will transact with you. Transactions will take 2-3 business days to complete.
Transfer Agent - Western Union
Western Union had various phone based automated services (quotes and order tracking) that you navigate through before talking to an actual person. In took nearly 2 minutes to reach an operator and was nearly 6 minutes before we got an actual quote. The operator was very friendly and helpful but did not have the knowledge of the people answering the phone at Kiwibank and OFX, hence had to look up a lot of the details.
The quote was the worst of the three at 0.5314 and Western Union have a limit of NZD5,000 for each transfer so you would have to do two transactions. There is a NZD10 fee for each transaction so $20 in total. For an outlay of NZD10,020 you would receive GBP5,314.
The Western Union free phone lines are open 24/7. You need to setup an account with them and can move the money via credit or debit card. An advantage of Western Union is that they offer the ability to visit a branch to pay the money in, the recipient can do the same in the overseas country (although the fees would be different to the internet based transaction described above). The transaction will normally take 3-4 business days to complete.
Who performed the best?
All three firms contacted offer a good service and had helpful friendly staff as their customer contact point. OFX offered the most competitive rate but their ability to fix a quote over the phone is their real winning point. They also provide customers the ability to execute transactions from a mobile phone app.
Western Union offered the worst exchange rate but do offer the advantage of a branch network around the world if you choose to make an actual store visit. This enables extremely fast (15 minutes) money transfers and they also offer a money to mobile phone service in some countries.