Friday, September 30, 2016

Bank average cost per international transaction

McKinsey's latest Global Payments Report, which is always an interesting read. I felt that they really missed an opportunity to visualise the challenge faced by banks trying to bring down the cost of international transfers.

Here is their chart. Notice the distorted y-axis.

Here is the same data, with the y-axis to scale. 



Monday, September 26, 2016

How to pay affiliates in Pakistan

Are you running a global affiliates network? Paying affiliates in Pakistan can be expensive if you don't chose a specialised payments company. Banks usually charge £9-£25 for an international payment and up to 4% in conversion fees. Add to that unpredictable receiving and intermediary bank fees, and it's clear you can't run your affiliate network using SWIFT payments.

The two most popular choices for payouts to Pakistan Paypal and Payoneer. Paypal's mass payments tool lets you send money to an email address, making it very easy to get set up. The cost is typically 2% (max $30), plus a 2.5% exchange rate mark-up, but for many businesses it's the easiest way to get started and most of the cost is born by the payee. However, Paypal doesn't yet support withdrawals to local bank accounts in Pakistan, making it an unpopular choice among affiliates (list of supported currencies here).

Payoneer allows you to use GBP, EUR or USD for making mass payouts. For your affiliate to receive funds, they need a Payoneer prepaid debit card, which they can use to spend their Payoneer balance. The pay-out fee is $5.95, plus a conversion fee of up to 3.5%. they can also receive the funds to an local bank account in India and roughly the same cost.

If you are making a lot of payments, these costs quickly add up. Another solution is TransferWise, and we are currently trialling a mass payments solution with a limited number of customers. With TransferWise, the pay-out fee is £0, and the conversion fee is only 1% and there is no exchange rate mark-up or receiving fees. You can apply for access to the beta program here.

Wednesday, September 21, 2016

How to pay affiliates in India

Paying affiliates in India can be expensive if you don't chose a specialised payments company. Banks usually charge £9-£25 for an international payment and up to 4% in conversion fees. Add to that unpredictable receiving and intermediary bank fees, and it's clear you can't run your affiliate network using SWIFT payments.

The two most popular choices are Paypal and Payoneer. Paypal's mass payments tool lets you send money to an email address, making it very easy to get set up. The cost is typically 2% (max $30), plus a 2.5% exchange rate mark-up, but for many businesses it's the easiest way to get started and most of the cost is born by the payee. However, Paypal doesn't support India, so we're left with Payoneer.

Payoneer allows you to use GBP, EUR or USD for making mass payouts. For your payee to receive funds, they need a Payoneer prepaid debit card, which they can use to spend their Payoneer balance. The pay-out fee is $5.95, plus a conversion fee of up to 3.5%. they can also receive the funds to an local bank account in India and roughly the same cost.

If you are making a lot of payments, these costs quickly add up. Another solution is TransferWise, and we are currently trialling a mass payments solution with a limited number of customers. With TransferWise, the fee is 0.7% and there is no exchange rate mark-up or receiving fees. You can apply for access to the beta program here.

Thursday, August 04, 2016

How much does international business payments cost?

With the help of a research agency, TransferWise called up the high-street banks in the UK to see what sending £2000 to Germany, the US and India would cost for businesses. Turns out, it’s a lot, but they won’t tell you if you don’t ask.

Exposed: the hidden cost of transfering £2,000 to euros

The up-front fees charged by banks varies between £9 and £25. Santander is the most expensive, and Natwest is the cheapest. But that's not all, the banks all added a mark-up to the exchange rate. The worst one is again Santander, who added on 3.47% in the exchange rate.

It doesn’t end here however. We also investigated how much the recipient pays on the other end. Commerzbank in Germany took £14 and Bank of America took £24. Only in India were there no receiving fees.

Sending bank fees for £2000 to EUR


Name of bank
% exchange rate mark-up
International transfer fee
Exchange rate mark-up in £
Total sending fees
Barclays
2.02
£25.00
£40.39
£65.39
HSBC
2.07
£9.00
£41.45
£50.45
Lloyds
2.45
£15.00
£48.99
£63.99
Natwest
1.73
£12.00
£34.66
£46.66
RBS
2.29
£12.00
£45.72
£57.72
Santander
3.47
£25.00
£69.36
£94.36
Read the research here.

Sunday, May 15, 2016

The relationship between daily and weekly search volume from Google Trends

If you're familiar with Google Trends, you know that they provide data on a daily, weekly or monthly frequency. Google Trends only provide daily data for 90 days at a time, so sometimes we want to compare weekly and daily data. But how can we compare the daily and weekly search volume?

Google doesn't make any information about this available to the public, so I set out to find out through trial and error.

The graphs below show the daily search volume, weekly search volume, and the average daily search volume by week. Most of the time, the average daily SVI and the weekly SVI move in tandem. They have different values however, which is something we would have to keep in mind when combining several daily series into more than 90 days.

Also, at the end of the time period, where we have an incomplete week, the average daily and the weekly SVI differ.




Saturday, May 07, 2016

Google Trends bulk download service

The Google trends bulk download service is live. It allows you to specify an unlimited number of keywords, your desired date range, data frequency (daily, weekly or monthly) and if you need the search terms to be comparable in terms of search volume.

You create a request to the service by filling out this form. The service returns the raw files, along with the database ready tables containing historical search volumes for each search term, geographical data and related-searches data.

The Google trends bulk download service is a convenient way to access Google Trends for academic research, market analysis and competitor insight.

Leave a comment here to suggest further improvements.

Monday, April 25, 2016

How do remittance companies stack up against TransferWise on Google Trends?

The numbers from Google Trends below show how various companies focusing on international remittances stack up against TransferWise. TransferWise is the flat line, and the other companies' numbers are in relation to TransferWise's. Companies with a large offline foot print such as Western Union and Moneygram are in the lead world wide. Xoom, a remittance company acquired by PayPal in 2015, also do well.

If we zoom in on the UK, the story changes. While Western Union is still the most Googled brand in the remittance industry, the lead shrinks from 13X to 2.2X over TransferWise. Over time, the declining share of search volume of Western Union becomes quite clear. This might explain part of the reason that they are so eager to build their own online currency transfer platform.

World Wide


TransferWise is flat line.



Companies
Search interest relative to TransferWise
western union
 13.00
moneygram
 4.14
xoom
 1.38
transferwise
 1.00
post office money
 0.47
worldremit
 0.39
ria money transfer
 0.24
azimo
 0.20
transfast
 0.17
moneycorp
 0.17
caxton fx
 0.14
fairfx
 0.14
remitly
 0.12
currencyfair
 0.09
hifx
 0.08
transfergo
 0.06
worldfirst
 0.02
ukforex
 0.01
tawipay
 0.00

United Kingdom



Companies
Search interest relative to TransferWise
western union
 2.19
transferwise
 1.00
post office money
 0.83
moneygram
 0.58
moneycorp
 0.41
fairfx
 0.33
caxton fx
 0.28
azimo
 0.22
worldremit
 0.22
transfergo
 0.13
hifx
 0.09
currencyfair
 0.06
xoom
 0.06
ria money transfer
 0.05
ukforex
 0.04
worldfirst
 0.04
transfast
 0.02
remitly
 0.00
tawipay
0.00


If we look at the market over a longer period of time, the decline of Western Union's share of search volume becomes clear.