According to research, almost 20 billion dollars are transferred internationally, every year and almost 5% of the total amount is charged from the people additionally, in the name of marked-up exchange rates.
You will be surprised to know that banks charge a fee as high as 13% of your total payment and if you have to send a larger amount, such as 20,000$ then it means, 2600$ can be charged additionally.
Although charges may vary from bank to bank, these results are created on the basis of average calculations.
What are mark-ups in Exchange Rates?
Many migrants work day and night in other countries so that they can send money to their families or loved ones.
And when they go to a bank to send money online, they charge unnecessary bucks from them. Banks can transfer money even with zero exchange rates or service fee, but markups have helped them in earning a lot of margins.
Banks usually transfer the currencies of their customer’s cash and add a markup. Basically, markups are the additional payments charged by banks, in addition to service charges and exchange rates while changing currencies.
Conventionally, only banks were used to transfer money internationally and by taking the benefit of this fact, banks charged a lot more money from their customers. Markups have a very negative influence on all international remittances.
How can we avoid markups?
In most cases, markups have kept hidden. No bank really exposes his all service fee publicly. Therefore, it may be tactical for any customer to avoid extra markups. However, there are some tips that can help you in saving your precious money.
For Instance, if you want to send money to Bangladesh, the banks may charge any hidden markups from the customers while converting cash into BDP. But if you do money transfer in Bangladesh by using any other platform, then you may get even zero exchange rates.
1. Check the inter-bank Rate
People don’t really notice extra charges because they only check how much money will be transferred to another country. Before making any transfer, check the forex rates and convert your currency according to your own calculations.
Then check, if the payment shown by the bank is the same or near to actual amount. It will give you a hint about how much extra money was the bank charging from you.
2. Try using trusted money transfer companies:
Since money transfer companies, transfer agents etc. have stepped in the field, the markups have dropped to a maximum level.
Different companies such as Ace Money transfers are providing minimal or zero exchange rates to people, along with negligible service charges. The majority of people have shifted their transfer systems from banks to several money transfer companies.