| Both the costs and time are due to: - the number of intermediaries in the chain: the bank to which the money is going usually doesn't have an account with the bank that sent the money, so effectively the transfer is split up into multiple transfers between banks - foreign exchange volatility: when sending money abroad, the bank gives you a firm quote now for the rate at which they will convert one currency to another; they reduce the chance they will lose money by charging you a rate worse than the current mid-market rate. - operating costs: banks have to run processes for AML, KYC, CS etc. - risk/fraud costs: provisions for actual losses from internal/external fraud To your later questions: - many companies have tackled this issue and aim to make it cheaper and/or faster: Moneygram, Western Union, OFX, HiFX, CurrencyFair, TransferWise, ... Which is the cheapest service for the currency pair in which you're interested? How much do they charge? |