Credit/debit card commission for non-sterling transactions

[CarolineH]

I take all of my payments by credit or debit card rather than bank transfers.

I pay a commission of 0.6% on all european credit cards, whereas bank transfers from non-euro accounts are charged at 32 euros plue 0.1% commission.

One of my guests has been asking to do a bank transfer because it is cheaper for him to do this as his bank charges 2.75% for non sterling transactions.

I was surprised at this - I considered that banks make their money on the exchange rate and when I used to travel abroad, there were never any commission charges on credit or debit cards, except if there was a cash withdrawal.

Is this current practice for all UK banks now? (This is First Direct) and if so, should I be changing my payment methods?

[French Cricket]

It's been standard practice for a long time, Caroline, though mostly the banks 'hide' the charge by adjusting their exchange rate to compensate, so it's only the financial-savvy customers who realise . Sounds like you have one of those!

There are one or two banks that don't do it, mainly I think the building society types.

The cheapest way for anyone to make a payment to you from a non euro account is via Transferwise: £1 up to £200, 0.5% on higher amounts. They transfer in pounds to Transferwise, you receive into your bank in euros. No charge to you.

We started offering it as an option this year and now offer three ways of making payments: Transferwise, bank transfer and credit card via Paypal. Over 90% of our payments are now coming via Transferwise, with people delighted to have been introduced to it.

[Casscat]

I think I may add Transferwise as a payment option, but do people see it as a bit 'Western Union'?

[CarolineH]

Thanks, FC.

In fact, First Direct show it as a separate line on their statements, so I don't think you have to be too financially savvy. Although, he does want to pay his balance early for his holiday in August, ie before the election because he is convinced that the pound will drop after the election!

It sounds ideal - I'm going to ask this guy to try it and see how we get on!

Love LMH For the second time this week!

[Debby K]

I'm with Credit Mutuel de Bretagne and I ask my UK guests to pay by bank transfer to my French account, for me to receive the amount in euros. I never have to pay charges to receive their payment but I'm sure they do. No-one's ever complained.

[French Cricket]

I think I may add Transferwise as a payment option, but do people see it as a bit 'Western Union'?

No, not at all.

It's based on fair trade principles and is very open and up front. Honestly, I can't tell you how many virtual accolades I've had for offering it as a payment option this year - you'd think I'd invented it or something .

[Hells Bells]

Halifax Clarity Card doesn't have the commission charges.

[Nemo]

It's been standard practice for a long time, Caroline, though mostly the banks 'hide' the charge by adjusting their exchange rate to compensate, so it's only the financial-savvy customers who realise . Sounds like you have one of those!

I think it was at some point last year that the banks were forced to become more transparent on their statements. For those of us already "financially savvy" it's just become a nuisance as there are often two sets of charges listed with a foreign transaction, so it requires some accounting now to work out what you've actually paid, whereas before it was a simple one figure. I could compare the cost of a European till transaction and see what it had cost me at a glance, now I need a calculator.

I would use a transfer company though, and have done in the past, to pay for a large bill upfront like a villa.

[Cassis]

I used to use Transferwise when it was possible for us to request payments either by email or by a button on our site, and guests did not need to open an account with Transferwise themselves. They could pay by either bank transfer or credit card, but it was the latter which really made it an attractive option for all concerned. Unfortunately, for technical reasons they stopped this in February and I no longer find it a good option to offer. Just so you know, here's what TW said when I raised this with them:

Hi,

I saw your feedback and I thought that it would be best to write back to you, just to inject you with a bit of optimism.
You are very much correct that as we recently lost the old option to request payments, the temporary solution is to have the sender(s) sign up their personal TransferWise profiles. I do agree that this isn’t ideal but our intent was never to close it down for good and not roll out a replacement.

The good news is that right now, we are only a couple of months away from introducing a new product which would firstly, replace the old paylink functionality and also, provide our customers with more flexibility towards invoicing / requesting payments from third parties.

If you were to consider giving us another go within a couple of months, I could sign you up for a notification and that would remind you once the new money requesting method is revealed, then you could try it out and decide – whether or not it would be suitable for you to use. In case you would be interested in that, make sure to reply to this very same email as then I will know to add you to that shortlist as well!

Best wishes,

Juhan-Kristjan Levo ⁞ TransferWise Customer Support

I very recently asked them on Twitter if there was any news but got no reply so I plan to give them until end of May then email to see if there's been any progress.

[French Cricket]

I chose not to use the paylink at all, Cassis - I thought it might be a step too far for guests to receive in an email a direct link to make a payment via an unknown currency transfer company ... could smell a bit too much like a scam of the Western Union variety.

This is what my 'deposit request' email says:

"The easiest, and cheapest, method is to use a currency transfer service called Transferwise. This is a 'fair trade' service, based on the principle of peer-to-peer exchange; it is perfectly safe and has unfailingly excellent reviews (we use it ourselves). A transfer of less than 200€ will cost you just £1, and you'll exchange at mid-market rates that will almost certainly be several centimes higher than those proposed by banks. You simply transfer (via internet banking or via debit card, and in sterling) the funds to over your deposit, and a couple of days later we receive them in euros - it's as simple as that. I haven't included a direct link here as it's really not good security practice to ask someone to click on an email link to a (possibly unknown) payment transfer service, but Transferwise can easily be found through Google, as can its Trustpilot reviews. "

Nobody's baulked either at opening an account or paying via bank transfer.

[Cassis]

I appreciate what you're saying, but I'm not offering it again until (a) users don't have to sign up and (b) TW accepts cards again, which was the great attraction.

Our deposits are usually quite small - most often 50€. I'm not convinced that there's a lot of benefit to the punters if I add another step to the process and ask them to sign up for a TW account as well as make a bank transfer.

I already offer the bank transfer option or PayPal or cheque (French). When TW first came out it was ideal because it rolled transfer and card into one and cut out PayPal commission. I'll definitely go back to TW when they restore the original service, though.

[CarolineH]

I spoke to them this morning after being alerted to their service and they said that the user can pay by card or by bank transfer. However, they will need to sign up with Transferwise.

The way the (very nice, german) lady explained it to me was : The original quote that the user sees on putting in the amount to transfer contains a 3% rate protection deposit which covers them if the exchange rate changes between the original agreement and when the users funds are transferred to them. Most of the time, when the rates stay stable, this 3% deposit is refunded directly back into the users bank account, and it is for this reason that they must input their bank details.

They said that for me as a money requester, I had a choice : I either sent the customer my bank details, or I could give them an email address to input and when the payment was made, I would receive an email and I could fill in the bank details of the account that I wanted the money to go into.

[Joanna]

I'm about to take a booking from an Italian couple - repeat guests so there aren't any trust issues to worry about. I was thinking of suggesting Transferwise to them since they paid by bank transfer in the past.

So I checked the Transferwise website and looked at their Trust Pilot reviews and it looks like they're having some issues at the moment - several people are complaining about long waits for money and even suggesting money's been 'lost' which is a bit worrying.

Has anyone had any experience with them in the last few weeks?

I'm thinking I'll stick to bank transfer or PayPal this time round but Transferwise looks like a good option for the future - if it works properly.

[Nemo]

I used XE trade a few years ago which worked fine once I had an account set up. http://www.xe.com/xetrade/

[cartnpa]

Joanna, I have received 6 payments via Transferwise in the last 10 days, all have gone through with no problems at all.