Western Union has announced that it plans to offer customers in the United Kingdom the ability to send up to £50,000 to overseas bank accounts with no fees applicable after the commission they receive on the currency exchange rate. Furthermore, Western Union is supporting this feature on its mobile app – likely a bid to respond to incredibly low-cost international transfers offered by services like TransferWise and crypto currency platforms such as Ripple.
The company has previously been slow to respond to digital-based forex competition and remittance products. Of their $81.8 billion USD in consumer transfers supported throughout 2017, Western Union collected $400 million in consumer revenue with projected growth rates of around 20% year on year. Sending money overseas via apps has long been supported by services such as TransferWise and Venmo, whereas Western Union’s support has been lacking significantly in the international transfer markets that are accessible via mobile applications.
A quick bank-to-bank transfer test via Western Union of £15,000 to US Dollars using their mobile app shows a receiver amount of $19,756 USD. A similar test using TransferWise’s app shows a rate of $19,750 USD. Given TransferWise’s dominance in the low-cost international bank to bank transfer market, this offers an attractive alternative. Similar rates are also observed between GBP:AUD, GBP:PHP and GBP:EUR trading pairs.
However, some trading pairs at certain amounts give more favorable exchange rates to TransferWise, such as £1,000 being worth 109,108 Bangladeshi Taka compared to Western Union’s 105,615 comparative rate. A £150 transfer to Singapore also offers $269 Singapore Dollars compared to Western Union’s $260. This should only give credence to the idea that individuals wishing to send money overseas should compare apps against one another to find out which one offers the best price.
One of the major draw cards for individuals using TransferWise is that they can have borderless bank accounts, allowing them to receive payments into USD, GBP, AUD and EUR denominated accounts that are held in their names. Western Union doesn’t offer this service just yet, but comes with the additional flexibility of allowing people to pick up transferred funds in cash. TransferWise on the other hand offers a free debit card that operates with a number of different currencies and does so with minimal exchange rate fees when compared to the larger banks in the United Kingdom.
Mobile-based money transactions overseas are fast becoming a low-cost solution to remittance and other forms of international financial transfers. With competition in the space heating up, consumers will find a plethora of options when it comes to sending money overseas using nothing but their mobile phones. Just like how many mobile-optimized forums exist such as ViperGirls that people can also enjoy.
Additionally, we expect to see the cost of international transactions to reduce significantly throughout 2019 with many new players expected in the space. Whether TransferWise, Western Union or a rival service becomes the biggest name in mobile-based foreign exchange is still up for debate – only time will tell which one wins out in the end.