Exchange Money and Lose on the Spot

by Winngie

16 October 2019

Exchange Currency

Financial Service

General

Peer to Peer

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Anyone who travels as often as me or lives in several different countries as I do may know that he/she needs to exchange money all the time. Each time, you will see how much the banks are charging and cutting from your money.

All payments and transfer fees are not so unclear, and you don’t know how much it costs you. In the information era, there is some information that has been covered but not opened to us. If you transfer a huge amount of money from your country to another country, you will feel amazed how much it may cost you and you will not be even sure how much you pay for each specific reason.

You will be battered to realize that the fees are as much as 13%. That’s on a round-trip exchange currency. It means if you exchange the money then change it back, you may lose 13% of the exchange amount. Of course you’re not going do a double exchange, but it gives you a clear idea of how much the banks can make out of you. The average fees are roughly 7% of the total exchange amount for a round-trip or 3.5% for one way.

Interbank rate is the rate the banks pay when exchanging money. This is the rate the banks pay when they are trading with each other. This is the “genuine” exchange rate. The banks make a margin on top of this, and give you their exchange rate with the fees covered. Mostly they do not open out the fee, and they just disclose the rate that you have exchanged. The reason why they charge that much is because this is a hidden fee. You don’t see the fee because you just see how much foreign currency you received when exchanging.

 

Country

Bank name Example currency

Round-trip fees

International

PayPal AUD/USD 3-9%

U.S.A.

Wells Fargo USD/EUR

2%

U.S.A.

Citibank AUD/USD

2.1%

Australia NAB AUD/EUR

10%

Australia

Westpac AUD/EUR 11%
United Kingdom Barclays GBP/EUR

13%

United Kingdom

Lloyds GBP/EUR

5%

Canada

Toronto Bank CAD/USD

6%

Canada RBC CAD/EUR

8%

The table above indicates the rates you receive if you wire money into your bank account in another currency. This is probably what will happen if you sale a house in one country and purchase another house in another country. It’s not the rates you receive when exchanging cash over the counter in the bank (although rates for both situations are usually very high). I include PayPal in the table above. Although they are not a bank, they are a popular option for international transfers. You will notice that the fees in the US are a bit more reasonable than the UK, Australia and Canada. But still, even the Wells Fargo currency exchange rates of 2% round-trip (1% one-way) cost some money to pay when there is no other lower cost option.

There are several options to avoid these fees, but it depends on how much money you are exchanging and which currencies you are exchanging. If you’re transferring $5k to $100k, you can avoid the fees and pay only around 0.5% by using any one of these currency exchange companies:

  • TransferWise – charges 0.5% one way or 1% round trip. They seem to be able to facilitate a transfer even if you do not have a bank account in both countries (but I have not confirmed this). The other alternatives on this list will need you to have a bank account in your name in both countries. TransferWise will definitely need the sender to have bank account and will need the sender to verify their identity with a copy of a passport or similar documentation.
  • OFX – charges usually 0.5% one way or 1% round trip.
  • CurrencyFair – charges usually 0.5% one way, and they also have a marketplace where you can trade with other people directly. (Note: Five free transfers with CurrencyFair if you use the link)
  • xe.com – fee varies depending on the currency.
  • Winngie-it gives you the best rate and best option. It is the best I have used.
  • Curexe – offers a transparent 1% cost on currency exchanges and goes down to 4% on higher volume transactions. They have awesome customer service because you can get a direct line to the founder 24/7.

 

The way for these services to work is that you transfer (via wire transfer usually or ACH in the US) to their bank account and then they will wire or direct transfer to you in the exchange currency. Usually this means you need a bank account in the two different currencies. You can get a bank account with multiple currencies which will solve this issue, for example, by setting up an account with HSBC in Hong Kong, Singapore, Australia or the UK.

There is also an option for using a foreign exchange broker to directly exchange money and pay the same rates that banks pay. This is something I have personally done, but it’s a little tricky to set it up. I would not recommend it unless you have over $500k to transfer. In other words, brokers don’t want you to set up an account. Just to exchange some money! They are looking for you to trade, and transacting hundreds of times, so that they make something on brokerage fees. One company you may use is Interactivebrokers. There will be a monthly fee and a minimum to open the account if you do this.

All of these previous options are more for transferring larger amounts of money. If you’re traveling overseas and just need some cash during your trip, there are basically two options: local currency exchange (cash to cash) or simply using your credit card. The best option depends on which country you are traveling to. Some countries have a local economy that relies heavily on exchanging to US dollars and you will find in these countries that the exchange rates for cash to cash can be quite reasonable (around 1% fees one way). Some examples are: The Philippines, Hong Kong or Ukraine. If you have US dollars, then the best option for these countries is to bring US dollar cash and exchange it when you arrive. Mostly you will not want to exchange at the airport as the rates are likely to be a lot worse than in the city center.

Credit cards are another option for getting your money when traveling. This can be either paying via the card or withdrawing from an ATM.

You want to be careful as most cards will double-charge you, not only for the currency conversion, but also an extra fee for withdrawing from ATMs and then on top of this an additional charge for foreign currency withdrawals.

So you can end up being charged in three separate ways for the same transaction: 1) The ATM fee 2) A percentage charge for cash advance or for foreign currency transactions 3) Another hidden fee on the exchange rate (again banks do not declare this fee to you they just tell you that this the “rate” they are giving you, but of course that “rate” includes their undisclosed fee.

There are some credit card options without additional fees whilst traveling, but all of them as far as I am aware will still have the hidden fee that they take when converting currencies.

 

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No More Feeding Big Chunky Bankers

by Winngie

3 October 2019

Exchange Currency

Financial Service

International Money Transfer

Peer to Peer

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If we just get on a time machine and fly back to 80s, the time of Marty McFly from “Back to the Future”. It would be tremendously difficult to explain how the world changed and how we are connected by a button of a small computers and even mobile phones. The time has changed, internet is already old and settled technology that we cannot even consider a life without it. If we go back 80s, even we cannot be sure to explain what we are having at this stage of the time. We are now well connected and well achievable.

The things on Internet are also on move and change rapidly. Big companies are losing their stance and small business who has no brick and stock having their time. There are no clear definition of supplier or demander, now all same in the same basket. No more people are stuck with big corporations and full of employees that earning good sum of money and enjoying being monopoly. The time changed, no more shopping mall needed, it is already online. No more bookstore, no more travel agents, no more groceries we are stuck on and need to visit, it is all one click away.

Banking? Big cold banks? Waiting for the line and getting ticket to remit your money? Still in this era? Money is a media that we use for mutual agreement. It is actually easiest one to transfer or remit. No need big exchange offices and no need to line up for banks declare all your recordings including your personal details.

Nowadays Peer to peer financial platforms are creating fresh start for the industry.

It is a demand that never been supplied well until lately, now all transactions are easy and manageable via online applications. Why people need to pay for the easiest transaction? Why we need to pay corporate bankers well paid salary? Peer to peer transfer options get the exchange offices, banks, lines, long waiting time out of our way. Now it is easier.

It is funny that one of the first material that we use as peer to peer, money! It is first peer to peer solution, barter is the forefather of all peer to peer business strategy. With the revolutionary speed of internet, there is no higher costly transfer deals, commissions and unnecessary waiting times.

Peer to peer Financial applications started replacing exchange offices. No more line up in the middle of street and waiting someone to charge you commission because you need them. Your hard worked salary, the money that you save for your kids, the salary for your family. Why you need waste your daily hard work to people who are sitting and getting commission. Why your hard worked money has been cut by big fat banks? It is painful for many working people that they need to look after their family back in their countries. Current business style is a monopoly, it is slow, costly and not even considering hardworking people who just want to transfer their money to their loved ones, who pays their school fees or rent. This is the motivation why peer to peer financial platform will be the one which replace robust monsters that cut our lumpsum money.

I am you and you are same as me.  We are all having same issues and same cut, why we need to feed big guys. Why we need to work hard every single day with dreaming our love ones, dreaming of being together one day we get together. However, giving large amount of commission, giving a share from our money to these big fatty chunky business monopolies. No, not anymore. That time is changing, taxi industry changed in good way for drivers and users, not anymore feeding this oligarchs of transportation. Travel has changed, it is cheaper now, affordable faster. All peer to peer business development, it is a revolution of business, it is the awakening of the customer. No more lining up and waiting for being devalued with our own money.

Yes, peer to peer financial apps already on the market, one day they will be the one change this vicious circle. Faster, cheaper, friendlier and yes, no more monopoly. Open space and plenty of options, this is revolution!

For Example, Meet Winngie Services. Winngie is a social platform for travelers, foreign students, expats, business people, and anyone travelling internationally. We help you transfer money abroad and exchange local money with real people. There are no hidden fees, no commissions, and no differences between the currency exchanges.
You decide the exchange rate and you find a solution that suits your needs.
We connect people with currency needs and help foster a mutually beneficial exchange. By cutting out the middle man, Winngie can help you drastically reduce the amount you pay while exchanging currencies. Say goodbye to your bank!

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User Story Sharing: What I Found Saves My Day

by Winngie

2 October 2019

Exchange Currency

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Everything is getting changing quick lately, and we are facing hard time to follow up new trends. I am sure there are many people like me who thinks herself as updated and following all details and news on time and aware of new concepts, we are more open minded and eyes open than previous generation for sure.

Actually I use Airbnb lately a lot, it is so handy and amazing to get a great deal. Uber, as a nice and proper way, gets the taxi anywhere I want, no more taxi line.

Lately I am using this application called as Winngie, and it is so handy. I did know it before but never try to use. Once I was in Tokyo for a business and on the way back to Thailand, I realized I had insane amount of Yen left, and I didn’t know how much currency difference I would lose if I exchanged it back USD and then Thai Baht. Then I just used Winngie at the airport first time ever. Wow! It is an amazing application. I got a Japanese lady who just came from Thailand and she has Thai baht on her and then we matched. We both got amazing rate, we met, and exchanged our money without even waiting on the line. I saved my money, and she was so lovely. We were both happy!

It is like when you line up on the exchange office and you see someone who wants to exchange money that you also want to get money. You know she will exchange money with very bad rate, and you will get that money from exchange office with worse rate too. Both lose and lose! However, you cannot stop her and ask if she can exchange with you directly.

Winngie is that platform. It does for you. I didn’t use before, and I always lost money. For me, it was a common process and it was something expected to lose over currency exchange rate.  Now no more!  I don’t think I will wait for exchanging bad rate.

When first time I used Uber, I felt same as well. No more taxi lining or waiting. It is not something I would like to wait for. Uber saves my time and I feel safer as all information of driver has already been registered and makes me more comfortable as my route has been recorded already. As a woman travelling alone, I feel more relax and safer with Uber. It happened in Airbnb as well, and now I feel same for Winngie as well.

It is so great to get some new application that helps us and work on our essential as a niche market. Work hard on what we need and solve the problems directly. I am so jealous of the mindsets of these platforms, solving the problems with way of changing the things in total.

I really need Airbnb, Uber and Winngie in my life, and I didn’t even know them before. It is like missing Iphone, but we haven’t had smart phone in our young ages. Fantastically, everything is on the move. Last time, it was Winngie, and I am not sure what would be the next one.

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