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No equality in forex fees
No equality in forex fees - The Adelaide Advertiser 31 January 2005SMALL businesses and consumers are losing millions of dollars in foreign exchange transactions each year, according to online foreign exchange service OzForex.
A recent survey of exchange rate quotes from six major providers to buy $US50,000 (about $85,000) to send by telegraphic transfer found the best charged a margin of about 1.35 per cent on the underlying Interbank rate.
The worst provider charged more than 1.95 per cent.
In dollar terms this adds $1173 and $1682, respectively, to the cost of the transfer.
OzForex's Matthew Gilmour says thousands of small and medium-sized businesses around Australia are doing exactly these sorts of transactions through their banks every week, often resulting in thousands of dollars extra cost each year.
Mr Gilmour says that unlike the share market, where all investors have access to the same price to buy or sell shares, foreign exchange is not a level playing field.
"Price transparency depends very much on where you are in the food chain," he says.
"Larger corporate and institutional customers can see and deal at professional market rates - but smaller customers have little idea where the real market is," Mr Gilmour says.
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