When Victoria’s resident Dick Newson tried to send € 1,000 to a friend in France through a transfer of money from his Scotiabank account, he did not expect it to be a nuisance.
“We were able to send it and said ‘Made,'” said Newson in an interview with CBC News last week. “Two weeks later, our friend said: ‘I still don’t have my money.'”
He is not alone in his frustration, according to a bank researcher, who points out that transferring money internationally can be expensive, difficult or confusing if his point of origin is a Canadian bank.
In general, an international cable transfer requires information, including the name of the recipient, the name of its bank and the codes, including the international bank account number (IBAN), the Banking Identifier Code (BIC) or the World Intebanchial Financial Telecommunication Society (Swift) world.
Newson told CBC News that he had all the required codes, but was frustrated by the bank’s website, which he found confusing.
“I went to his international money transfer website and tried to enter all this information and I had many difficulties,” he said. While the Scotiabak website offers the service for $ 1.99, Newson said they told him that the price was not applied when he asked for help, and that he would have to pay $ 25 if he entered a branch.
Newson told CBC News by email on Monday that Scotiabank had “determined that the money had been deposited, but in a commercial or corporate account, and not in the personal person.”
In a statement sent by email on Tuesday, Scotiabank said he is “working closely with our client to ensure that this matter is resolved to his satisfaction.”
But Newson’s criticism is not just that money is missing. He believes that the process to send money at the international level should be simpler and more cheap, similar to how inter-e-transfers transfers work to send money within Canada.
“It should be so easy to go through the bank to do the same [internationally]”, said.
Canadian banks do not face much competition
International Trade Economist Werner Antweiler points out that Canadian banks do not face great competition in this country when it comes to handling foreign currency and moving money worldwide.
“It is an oligopoly. He is just a handful of banks that are in a very cozy place,” said Antweiler, professor of Economics at the Savauder School of Business from the University of Columbia British in Vancouver.
“And that means that they can keep relatively high rates. Especially those rates that are invisible to most customers.”
Although he did not speak specifically about Newson’s situation, Antweiler said that Canada’s banks do not have to provide the same level of interconnection as many foreign banks.
“At this time we do not have the type of simplified system, for example, that is in its place in the European Union, where transfers are carried out in real time and a really low cost,” he said.
“Our Canadian banks make it really difficult to keep money in a foreign currency,” Antweilier said, and pointed out that problems around money transfer can also be applied to markets a little closer to home.
He pointed out that although he can have a US savings account. In some Canadian banks, he can only deposit or withdraw funds with many of those accounts.
“Actually, I can’t make this account in the United States. It is not linked to the United States payment system,” he said regarding his own US dollar account in Canada.
Canadian banks even charge money
Bank charges to send money at international level can be as high as $ 45 in institutions such as RBC.
To receive a bank transfer, banks such as TD Bank will charge $ 15, in addition to any rate that the sender had to pay.
The Canadian Banqueros Association, which represents both banks, points out that international money transfers have costs because they are more complex than national transfers.
In a statement to CBC News, the association, which represents more than 60 financial institutions, wrote that the cost of moving money internationally remains consistent regardless of how much money is sent, “that is why banks generally charge a fixed rate instead of a percentage of total payment.”
Antweiler points out that currency conversion is only part of the process, which also includes anti-fraud measures, and he accepts that these procedures cost money.
“There will always be transaction rates. But the question is, how high should be and what is reasonable?”
Antweiler also points out that often the exchange rates offered by large institutions are higher than alternative money transfer systems.
For example, Canadian competition Bank EQ Bank offers online international transfers using a system backed by the British financial company Wise. Eq Bank says that their change rates are usually lower than the main banks, and make it clear how much it will cost immediately.
“I’m going to send … $ 300 Canadian … but how much will the recipient receive in his bank account at the end of the day?” Dan sprout said, senior vice president and head of EQ Bank in Toronto, highlighting the belief of his company that the highest exchange rates of a traditional bank also serve as a type of indirect rate.
“Many clients when it comes to a larger financial institution, it may not be clear to them. It is actually completely hidden,” he sprouts.
Competitors trying to make it easier and more cheaper
Canadian alternatives to larger banks could see the opportunity to attack customers who send money outside Canada, and some announce cheaper international money transfers for their customers.
The Fintech WealthSimple company recently launched a new set of products, with some free traditional wire transfers for several weeks and providing access to an alternative system of lower cost, also through Wise.
Wise offers its own accounts, as well as a debit -style card that allows customers to receive and spend in multiple coins or online. In a statement to CBC News, Wise said that the average rate charged is .53 percent of the money that is sent, compared to what the company states is an average industry from two to five percent.
The lowest cost is part of the appeal for companies such as WealthSimple.
“You know exactly what you are paying and will be significantly cheaper, or without rates,” said Hanna Zaidi, vice president of payment strategy at WealthSimple.
She says that her company does not need to charge so much for bank transfers because it simply does not have the same costs as a traditional institution.
“We don’t have bank branches. We don’t have all these administrative rates and overloads with which we must deal,” he explained.
The increase in competition can promote traditional banks to respond, and Antweiler points out that there are more profits as more customers seek international money transfers.
“Entering the market as a new competitor and offering a cheaper product will obtain its market share,” he said.
Victoria’s man’s money is still missing
Back in BC, Newson acknowledges that you may have to play the waiting game, but said you would like to see the banks compete more when it comes to making it easier to send money abroad.
“I would only want banks to advance to that and say, you know, we would like to make it easier.”
However, he also noticed that he has spent more than a month and still did not return the money, while his friend in France is also SANS L’Art (without effective).
“Scotiabank has done what he can of this end,” he said, adding that he felt the bank “step forward” to get additional details to help.
So next time? He says he will use a competitor service that may not depend on traditional banks.
