Lotus Foreign Exchange Money Transfer review: Fees, rates and transfer

If you’re looking for a convenient and cheap way to send money overseas, it pays to compare a few options before you decide which service will best suit your needs.

This guide will take a look at the money transfer services provided by Lotus Foreign Exchange. Lotus Foreign Exchange has 8 branches in Australia, and a presence in New Zealand, too. You can send money to friends overseas easily using their telegraphic transfer service, or via their partnership with MoneyGram.

We’ll take a look at the type of transfers you can make with Lotus, as well as the fees you’ll pay - and also highlight Wise as a smart alternative to look at when comparing your options.

What are the fees for an international money transfer with Lotus Foreign Exchange?

Lotus Foreign Exchange provides 2 different types of international payment - telegraphic transfers, and cross border payments powered by MoneyGram. The fees you pay for each service will vary. It’s also important to note that the full cost of your payment may include an extra fee in the form of an exchange rate markup. We’ll look at that later. Here’s what you need to know about the transaction fees for each of these services.

MoneyGram international transfers

When you send money with MoneyGram, you’ll first model your payment and be given a quote for the fees and exchange rates available. You can do this online, and pay using a credit or debit card, or visit an agent location like Lotus Foreign Exchange, and arrange the transfer there, paying in cash. It’s worth noting that the fees and exchange rates offered by MoneyGram agents are not always the same as those detailed online, so do check before you confirm the payment.

To give an indication of the costs, at the time of research you’ll pay AUD2.99 to send AUD500 to a range of countries including Mexico, France and the Philippines. However, you’ll also usually pay an extra fee in the exchange rate markup which can push up the overall costs of the transaction¹.

Lotus Foreign Exchange telegraphic transfers

Lotus Foreign Exchange also offers customers personal telegraphic transfers (TTs) to overseas accounts. If you want to make this type of payment you’ll need to visit one of the Lotus branches and complete a TT form, to get a quote for the fees and exchange rate on offer²,³.

You’ll need to check you’re happy with the rates and fees before you agree. It’s also worth confirming if there are likely to be additional charges due to the payment being routed via the SWIFT network.

The SWIFT network is a common way of processing international payments, which involves several partner banks working together to deliver money to an account overseas. It’s safe enough, but it can be slow and may also be costly, as up to 3 banks can be involved in a single payment. Each intermediary bank can charge a service fee for their role in processing the money, which can quickly mount up, and mean your recipient gets less than you expected in the end.

What are the currencies that Lotus Foreign Exchange supports?

As a MoneyGram agent, Lotus Foreign Exchange can provide payment services to over 200 countries and territories⁴. If you’re planning on making a TT payment through Lotus, you’ll need to confirm availability by calling your chosen branch before you visit.

If you are not able to make your payment with Lotus, or if you simply want to compare your options, check out the currencies and great rates available through Wise, here.

What is the Lotus Foreign Exchange exchange rate?

Working out what you should pay for your foreign exchange can be tricky. Because exchange rates change all the time it can be hard to know if a rate you’re offered is fair or not.

The best benchmark to use when comparing exchange rates is the mid-market exchange rate. That’s the rate that banks and currency services get when they buy foreign currency themselves. But it’s not often the rate they pass on to customers. That’s because many providers choose to add a spread or markup to the exchange rate they use. They can then keep this as an extra profit.

Adding a markup to the exchange rate is extremely common, but it can make it hard to know exactly what you’re paying in fees, and may mean your recipient gets less than you expected in the end. MoneyGram confirms in their terms and conditions that a currency exchange rate may be applied in addition to the transfer fees you pay[5]. This may mean a markup appears on the exchange rate you’re quoted, compared to the mid-market exchange rate for your currency pairing.

Let’s take a look at how this works in practise. Imagine you’re sending AUD500 to a friend in France. This is how the transfer will work with MoneyGram, compared to Wise - a mid-market rate provider.

*Fees and rates correct at time of research 23 July 2020

This example shows why the exchange rate really matters.

MoneyGram charges a lower upfront fee compared to Wise. But when you look at the impact of the exchange rate, you see that your recipient gets more - and you pay less - if you send using Wise. That’s because Wise uses the mid-market exchange rate with no markup, and just charges a simple transparent fee.

How long can a transfer with Lotus Foreign Exchange take?

If you’re sending money with Lotus Foreign Exchange via MoneyGram, you’ll have the option of having your payment delivered to your recipient’s bank account, or collected in cash. Cash collections are usually ready within minutes once the payment has been processed. Direct to bank transfers can take a little longer. You’ll usually find your payment arrives by the next working day, although some routes take just a few hours.

Sending money with Lotus using a TT may take a few days. Ask when you submit your payment, when it is likely to be received. If it is processed using the SWIFT network you can expect it to take up to 3 - 5 working days, depending on the destination country and the recipient’s own bank’s processes.

How does Lotus Foreign Exchange work?

Let’s take a look at how money transfers with Lotus Foreign exchange work in practise.

What kind of transfers can you make?

Lotus Foreign Exchange acts as an agent for MoneyGram. With MoneyGram you can arrange payments online or in person, and send money to your recipient’s bank account, or for them to collect in cash. In some countries you may also have your payment delivered to your recipient’s home, or sent to a mobile wallet. Not all services are available in all locations, to check with Lotus before you confirm your payment.

You can also send money to a personal bank account overseas, via Lotus Foreign Exchange’s telegraphic transfer service. In this case, you’ll have to visit the branch of your choice, compete a TT request form and your payment will be sent direct to your recipient’s bank account. TTs can be funded in cash, using a cheque, by EFTPOS or a bank transfer directly to Lotus.

Does the recipient have to sign up with Lotus Foreign Exchange?

The recipient does not need to sign up to an account with either Lotus Foreign Exchange, or MoneyGram, to receive their money.

Are there any limits to the amount you can transfer?

If you’re sending money using Lotus Foreign Exchange’s own TT service, you’ll need to check the applicable limits based on the country you’re sending to by calling your branch directly.

MoneyGram payments made online are capped at AUD13,750 per transfer, and an aggregate of AUD13,750 per month. However, by visiting an agent location, such as Lotus Foreign Exchange, you might find you’re eligible to make larger payments. This will depend on the destination country, and may mean you have to provide more details or paperwork to validate your transfer.

Is the service available to anyone?

You can use Lotus Foreign Exchange by visiting one of their 8 branches in Australia - or go online to make a direct MoneyGram payment.

What are some competitors?

Before you decide how to arrange your international transfer, you’ll want to check out a range of options to compare the services and prices on offer. Take a look at Lotus Foreign Exchange compared to some of these major competitors, to make sure you find the right deal for you.

• Wise for low cost payments direct to a bank account, which use the mid-market exchange rate and simple transparent fees
• Western Union⁶
• OFX⁷
• Ria Money Transfer⁸
• PayPal⁹

Making an international payment shouldn’t be hard, but to get the best service for your needs, you’ll need to invest a little time in research. Take a look at the different types of service available, remembering to factor in both the fees and exchange rates being offered by different providers. That way you can find the best balance of convenience and cost for your payment.

Don’t forget to check out the low cost international payments on offer from Wise. All payments use the mid-market exchange rate for transfers that are better value and more transparent than many other providers, and up to 8x cheaper than using your regular bank.

Join Wise

Sources:

All sources accurate as of 23 July 2020