[msrpotus]

What stops banks from dropping those fees to compete with TransferWise? Are they serving a fundamentally different slice of the market?

[charlesdm]

Probably nothing, but the loss of customers probably doesn't make up for the fees they currently make.

[xioxox]

Banks in Germany are competitive with TransferWise for fairly large amounts (several thousand euros). You can achieve sub 0.5% charges with DKB, including the exchange rate penalty, for example. The main problem is that the pricing structures are opaque. Often the exchange rate is not properly advertised (and may not apply depending on the time of the transfer) and there are additional charges to include.

[faramarz]

Banks are starting to compete, and they have great advantages to put them right in the middle of the battlefield.. if they move fast enough. For them it would be FX trade volume play and they can forego the fees to the end customer