I am emigrating soon and have saved some money (in South African Rand) which I will need to take with me. It will just be enough to cover basic expenses for 3 months.

I am moving from South Africa to England.

I have sent money to England before from my SA Bank account (ABSA) to my UK Bank account (Barclays) and found it to be rather expensive. It was done via Swift. I therefore researched a bit to find if there was a cheaper option. I learnt that finding a service that would transfer the funds at spot rate rather than retail rate was a good option and that there are services which do not charge as much commission for the transfer.

I endeavored to use one of these services - Currency Fair - as they informed me that they would transfer the money to their ZAR account in the UK and in this way the cost would be cheaper. I continued with this until one of the final steps indicated that I would be charged an additional fee by my South African bank for the transfer.

I then set out to find out from my bank what the additional charge might be. Research indicated it would be around $25. However, the bank informed me that it would be impossible to find a cheaper fee for transferring the money than via a Swift transaction at the bank as I would be charged commission twice for using an external service (once by the bank and once by the service). This is not what I read online.

So, my questions:

  • Is it really more cost effective to use a service like Currency Fair - does using such a service really avoid additional costs? Or would it add costs?
  • Does the fact that they send money to a ZAR account in the UK make it cheaper? How does that work?
  • Is it true that banks transfer money at a retail rate as opposed to a spot rate?
  • Is there actually a better means to transfer money outside of South Africa than using the bank directly?

Thank you in advance :)

  • 1
    Underground cryptocurrency transfer.
    – user67084
    May 10, 2019 at 5:53

2 Answers 2

  • Is it really more cost effective to use a service like Currency Fair

Yes, it is, because you avoid the SWIFT charge. OBVIOUSLY both ends charge you, but unless you choose the wrong service that is the standard charge for an in country money transfer.

  • Does the fact that they send money to a ZAR account in the UK make it cheaper? How does that work?

ZAR is not a major currency. Start with finding a bank that allows you to HAVE a ZAR account in the uK. I know it would be problematic in germany and poland (because ZAR being not a major currency). Now, if you can not open an account - the rest of the question is irrelevant.

  • Is it true that banks transfer money at a retail rate as opposed to a spot rate?

Banks love to F+++ you whenever they can. Now, it is not true as a general rule - IF you ahve agreements in place. I change frequently EUR into PLN and I get a VERY good rate - but i get it because of negotiating with my bank.


There are two components to the cost of an international transfer from one currency to another:

  • The fee for transferring the money itself. This is generally a fixed amount and doesn't vary with the amount transferred (or at least not very much).
  • The exchange rate you get and how much it differs from some kind of notional "ideal" rate. With an ideal rate you could exchange money from one currency to another and back again and not lose anything. In practice the rates will be different each way and you will lose something. This difference is often called the spread. It will generally be directly proportional to the amount transferred.

Normal banks are usually rather opaque about both fees: they transfer via SWIFT and apply some random spread they choose.

The newer services dedicated to transfers are much better. They tell you both the transfer fee and the spread up front. But you still have to get the money to and from these services.

Your problem is that Currencyfair doesn't provide a way to send them ZAR to a South African account. So even though you can send it to them in a UK account, your bank is still hitting you with a SWIFT transfer fee as it's an international transfer.

You can then use Currency Fair to probably get a better spread, but you've still been hit by quite a large fixed fee.

Unfortunately at the time of writing, none of the other major providers (Revolut, Transferwise) seem to offer a way to transfer them ZAR within South Africa itself. So you may be out of luck.

  • Currencyfair provide a local South African bank account to which I must transfer my money, then they send it to their UK ZAR account, and then send it to my Barclays account. Does this influence your answer differently at all?
    – Dee
    May 10, 2019 at 7:02
  • @Dee: yes, I misunderstood what they are doing then. But then your bank is charging you $25 to transfer your money from one South African account to another? Is that normal? May 10, 2019 at 7:24
  • @Dee I just looked at Currencyfair myself, and they tell me to send ZAR to a UK IBAN (starting GB). So I don't think it is a local South African bank account, unless you're seeing something different to me. May 10, 2019 at 7:30
  • Yes I see the same. So then where is there any money saved using Currencyfair - if any?
    – Dee
    May 10, 2019 at 7:48
  • @Dee They might give you a better rate for actually exchanging money. May 10, 2019 at 8:00

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