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The Annual Savings of Switching to Borderless Account
Are you using your bank to send and receive business payments to and from Europe? If so, we’ve got data that shows you’re probably paying too much, including a price comparison from independent research agency, PCM.
Research Methodology
The research was carried out between the 15th May and 22nd May 2017 (“ Research Period ”) by market research agency, PCM in conjunction with Wise. The initial phase of the project was conducted on the basis of a mystery shopping exercise contacting the major UK providers used by SMEs, Barclays, RBS, Santander, Lloyds, Natwest, Western Union, and HSBC, (“ Researched Providers ”). The reference to “Provider Average” in the table below refers to the average fees/charges charged by the Researched Providers.
There are four types of fee recorded for this price comparison: an upfront international money transfer fee; the mark-up all the Researched Providers added to their exchange rate; the monthly fee they charge for having a account with them; international receiving fees incurred when people and businesses pay you from abroad; and payout fees associated with withdrawing money from your borderless account.
Research for all the surveyed banks on a single route took place on the same day to minimise exchange rate fluctuations.
Overall Price Comparison
We know that businesses come in all shapes and sizes, so we’ve indicated an indicative saving number based on the amount you send and receive across borders each year. We’ve classified these three levels as ‘Small, Medium and Large’.
| Small Business | Medium Business | Large Business | ||
|---|---|---|---|---|
| Sending volume | £10K of payments per year to EUR | £100K of payments per year to EUR | £500K of payments per year to EUR | |
| Receiving payments | 5 International payments from EUR per annum | 25 international payments from EUR per annum | 50 international payments from EUR per annum | |
| Wise | Annual Fees for sending, receiving, & payouts | £52.25 | £510 | £2,512.50 |
| Annualised Monthly fee | £0 | £0 | £0 | |
| Researched Providers Average | Annual Fees for sending & receiving | £450.16 | £3,178.52 | £13,557.20 |
| Annualised Monthly fee | £71.04 | £71.04 | £71.04 | |
| Annual savings from switching to Wise | £397.91 | £2,668.52 | £11,044.70 |
Below we go into more detail on how we ascertained the data for each of the following components of the above ‘annual savings comparison’.
- Monthly fees
- Sending fees (upfront fee + exchange rate markup)
- Receiving fees
- Payout fees
Monthly fees
The monthly fees listed below were collected online during the Researched Period. Monthly fees are the fees that the Researched Providers charge for maintaining an account with them.
| Name of bank/broker | Monthly Fees |
|---|---|
| Lloyds | £6.50 |
| RBS | £5.00 |
| Santander | £7.50 |
| Barclays | £6.00 |
| Natwest | £5.00 |
| HSBC | £5.50 |
| The Researched Providers average | £5.92 |
| Wise Borderless account | £0.00 |
Sending money fees
We commissioned independent research agency PCM to research the cost associated with sending £2,000 and £10,000 to EUR via the Researched Providers. Here’s a summary of their findings:
| Amount sent | Sending Bank Fees | Exchange Rate Mark-up | Total bank fees and charges | Wise Fees | Wise is x times cheaper |
|---|---|---|---|---|---|
| £2,000.00 | £20.16 | £52.00 | £72.15 | £9.95 | 7.25 |
| £10,000.00 | £19.91 | £222.47 | £242.37 | £49.75 | 4.87 |
How did we come to our annual ‘send money’ savings estimates?
In order to provide our indicative annual ‘send money’ savings figure, we estimated the number of £2k and £10k transfers a business of each size might make each year.
| Business Size | Annual Transfer Volume | Number of £2k transfers per year | Number of £10k transfers per year |
|---|---|---|---|
| Small Business | £10,000 | 5 x £2k transfer | |
| Medium Business | £100,000 | 25 x £2k transfer | 5 x £10k transfer |
| Large Business | £500,000 | 50 x £2k transfer | 40 x £10k transfer |
We then multiplied the ‘per transfer’ savings (independently provided by PCM) by the number of payments shown above to indicate how much you could save across a year of sending money abroad..
| Small Business | Medium Business | Large Business | ||
|---|---|---|---|---|
| Sending volume | £10K pa | £100K pa | 500K pa | |
| Wise | Upfront sending fees | £49.75 | £497.50 | £2,487.50 |
| Exchange rate margin | £0 | £0 | £0 | |
| Total fees | £49.75 | £497.50 | £2,487.50 | |
| Researched Provider Average | Upfront sending fees | £100.79 | £603.50 | £1,804.28 |
| Exchange rate margin | £259.98 | £2,412.23 | £11,498.42 | |
| Total fees | £360.77 | £3,086.8 | £13,373.7 | |
| Annual ‘Send Money’ Savings from switching to Borderless account | £382.1 | £2,589.3 | £10,886.2 |
A note on research methodology:
The international transfer fees for sending money abroad using the surveyed banks’ phone or website service, and in-branch service were recorded. The fee is calculated as the average of the fees charged for these three methods for the surveyed banks (online, branch and phone). The exchange rate markup is calculated as the difference between the exchange rate offered by the relevant bank and the exchange rate listed on Reuters at the time of the phone enquiry.
Receiving fees
Below you can see outlined the international receiving fee associated with a business account from each of the Researched Providers. This data was also independently sourced by PCM during the Research Period.
| Name of provider | International Receiving Fee per payment from EU | International Receiving Fee per payment from Non-EU/EEA |
|---|---|---|
| Lloyds - (Online/phone banking) | £0.00 | £6.00 |
| RBS - (Online/phone banking) | £7.00 | £7.00 |
| Santander (Online/phone banking) | £0.00 | £0.00 |
| Barclays - (Online/phone banking) | £0.00 | £6.00 |
| Natwest - (Online/phone banking) | £7.00 | £7.00 |
| HSBC - (Online/Phone banking) | £8.00 | £8.00 |
| Researched Provider average | £3.67 | £5.67 |
| Wise | £0.00 | £0.00 |
In order to provide our indicative annual ‘receive money’ savings figure, we went estimated the number of payments a business of each size might receive over the course of a year.
There is no cost associated with receiving money into your Borderless account.
| Small Business | Medium Business | Large Business | |
|---|---|---|---|
| # of payments received per year | 5 payments | 25 payments | 50 payments |
| Wise | £0.00 | £0.00 | £0.00 |
| Researched Provider Average | £18.35 | £91.75 | £183.50 |
| Annual ‘Receive Money’ Savings from switching to Borderless | £18.35 | £91.75 | £183.50 |
Payout Fees
Wise charge a 50p payout fee associated with withdrawing funds from your Borderless account. In the below example we have included a withdrawal cost for each payment received.
| Small Business | Medium Business | Large Business | |
|---|---|---|---|
| # of payments received per year | 5 payments | 25 payments | 50 payments |
| Wise | £2.50 | £12.50 | £25.00 |
| Researched Provider Average | £0.00 | £0.00 | £0.00 |
| Annual Savings when using Borderless | - £2.50 | - £12.50 | - £25.00 |
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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