Hi All,

I am new to this forum but not new to Spain and certainly not currency exchange.

So I thought my first post should be an informative one (and also a bit of networking!)

I work for a currency provider here in Spain as the Head of Business Development.

Currency exchange can be mind-blowing when you look into the facts and figures.
Most people tend to think that it’s going to be really tough to use a currency exchange provider.
Infact, it’s easier than using the banks. And most of the time (especially with Spanish Banks)
the customer is often not given a very good deal.

To put things into simple terms - Using your bank can lose you upto 1% per transaction not to mention the fees for
sending / receiving funds. Although many Spanish banks now offer a ‘commission free’ service this is not as straight forward as
ot may seem. They won’t charge you for the transaction (true) however they have to make their money somewhere…
Exchange rate. Using a bank for a transaction of, for example, ?1000 - you may receive (for talking sake) a rate of
?1 = 1.42 - versus a currency exchange provider you would probably get 1.45 / 1.46 .

This is obviously a guide value etc but the fact remains the same, banks aren’t competitive.

The next problem I hear alot of in Spain is from the more mature expat who wants to transfer their pension month in month out and has to do so through a Bank as currency providers have a certain minimum amount. This means they have no other option but to transact through their bank and lose out.
(This is not the case for my company as we do not have a minimum)

So what does this mean to a person transferring regular amounts?

It means they get ripped off on a regular basis!!!

Now this is no way a post that I’ve thought of in order to generate more business for my company.
(Although I wouldnt turn it away!)
And I won’t include the name of the company either.

However, foreign exchange is a very competitive business these days so my advice is…

SHOP AROUND!!! Don’t just use the bank, you will be losing out.

We have all worked hard for our money, so why give some of it away for free???

I’ve added a little poll for my own research purposes, please do vote as his will help me to identify f this post has helped anyone!

I really hope this helps at least one person!

Kind regards,

RiveraDelSol.

Hi Riviera,

Thanks for the informative post. I believe we have other articles on the site that would support your advice too. I have a few questions though:

1. Since most of the currency exchange places have a minimum to transact, what should one do if they are only transfering a pension, or savings from back home to live on? If I can only pull 400? at a time from an ATM and only want about 400? at a time (not interested in carrying around more than 400? usually), is this not the most practical solution? Even if it costs 1-2%?

2. Let’s say I run out of money one day or am running low and need to transfer some cash into my Spanish bank account from abroad. What is the procedure to do so? How long does it take to arrive? Can it all be done online?

3. If the banks have to recover costs when they provide a low (or better) exchange rate, how do the Currency Exchange busineses make their money if each transaction is worth less than 1%? Sounds like they’d have to move a lot of ??? to recover their interests and multiple currency capital.

Thanks in advance RiveraDelSol.

Good Evening The Expatriator!

Thanks for your response.
I don’t want this post to sound or look like I am just trying to ‘plug’ my company as it were so again I won’t mention who I work for but I can only give you answers based on what I provide! So here goes…

When using a UK account and withdrawing cash at an ATM here - you will generally be charged more than 1-2% as these are tourists rates (you might not be aware of it because you just don’t benefit from the exchange rate - and they charge a commision)
The best way to counter-act this is to have a Spanish account to which your GBP funds are transferred (this was originally what I meant) now, this is were the banks really do benefit as they charge a fee for receiving (not always) and you get a poor rate of exchange. The only way around this is to use a currency provider to transfer the funds (basically act as a middle man) this then gives you a better rate and zero TT (telegraphic transfer) fee’s.
However, as you quite rightly stated, currency providers have a minimum, but not our company (theres the plug!)
This allows you to receive as close to the actual amount as possible every time you transfer. Another plug* I can assist in the opening of a Spanish account for clients to deposit funds into.

The procedure
Open an account with your FX provider (with us this is free - 3rd plug!)
Set up a beneficiary (you Spanish account)
These are one off set ups

Everytime you transact, instead of telling your bank to transfer to your Spanish account you tell them to pay to the FX provider
(to minimise your efforts you could set up a standing order)

The FX provider then deposits the funds into your Spanish account.

Simple as that!

Banks recovering costs
Banks are not FX providers, so their FX business is about 5% of their overall business.
They basically make a whole lot of money out of clients trusting them and not knowing other options.
For instance, the recent boom in the UK of people claiming back their bank charges for when theyve been overdrawn etc..
This has been allowed for many years, but nobody knew about it and the banks kept quiet…
FX providers still make money (I can assure you our company is not a non-profit organisation!)
This is how…

FX providers and Banks alike buy vast amounts of currency at what is known as the InterBank rate (the rate they sell to eachother)
These rates are not available to anyone else.

The profit is made on what is called the ‘Buy/Sell spread’ (the rate bought and sold at)

Therefore if the interbank rate is (for talking sake) ?1 = ?1.48
The bank will place a margin on that rate and sell it for ?1 = ?1.42
Because an FX providers business is 100% FX, the margin doesnt need to be as wide, therefore we could provide closer to 1.46/7

It doesn’t sound massive, but if you equate it over a few thousand pounds per year, the difference is amazing.

Now I feel like I’m rambling! I hope this answers your questions effectively and if it doesnt or you have any more, let me know!

RivieraDelSol

Hi Riviera,

Nope, you’re not rambling (at least not too much) 😉 .

I know the difference must be pretty big.

Here’s my example: a client pays me into my Canadian bank account for every invoice. They’re paying at least 35? for the International wire transfer fee, plus the bank’s spread between the currencies. Since there is some concern about the target of their bank transfer (for tax purposes), they haven’t yet transfered to my Spanish bank account and probably won’t in the future.

Can your FX company (or someone else’s) provide a solution for this situation? Does one still have to pay International wire transfer fees? If one transfers money to the FX company, how does it end up in the correct target account at the other end?

Thanks Riviera.

Hi There Expatriator,

Am just leaving the office and will respond to last post in a short while…

Kind regards,

RivieraDelSol

Hi again Expatriator,

Apologies for the late reply.

There are a number of options for this type of situation.

Lets firstly take out the variables - Lets say you are not able to use an FX provider due to not reaching their threshold amount.
Lets also assume that your client will never pay into your Spanish account for their own tax purposes, and lets assume that
as a result of this you withdraw the funds from an ATM here in Spain.

Given the above factors you clearly would be losing out (as we are both aware)

One of the ways to counter this would be the following;-

Your client pays you - however - this is sent to the FX provider

Your client would probably not do this if the FX provider was not based in Canada (for those tax purposes)
(I could personally make this work for you with ease as we operate in Canada < that is a plug!)
Most FX providers here in Spain are UK based etc, so it wouldnt be as straight forward for them.

The FX provider then transacts the funds to you, therefore taking out the need for it to be transferred to your account in Canada and then you transferring to Spain or withdrawing at an ATM using a foreign ATM card.

It’s that simple, honestly.

As far as speed goes you can work on what is known as a 1 day value (where the whole transaction process takes place the same day but this is generally used as an urgent payment process due to charges imposed by most high street banks) Normally we work on a 3 day value, meaning from the point of transfer to the point of receipt by you would be 3 days. This has no charges by any bank.

There are other things you should also take into account - these are;-

If you transfer a large amount of funds (regularly or not) this process may or may not be good for you.

Instead of making this particular post lengthy (again!) I’ll begin a new post regarding ‘Forward Contracts’
I don’t want to confuse the whole thing, but I figure the more I write the more everyone will benefit, and those that don’t wont read it anyway!

Hi Riviera,

Thanks for posting all of this information.  I hope that this is the right place to ask questions about a specific situation.

I am currently living in the US, and will be moving to Spain in the fall.  I will continue to work for a US company, and will be paid in US dollars, which will be sent directly to my US bank account.  I would like to do a one-time transfer of a larger amount of money (say about $20k USD) and I will need to transfer smaller amounts every 2 or 4 weeks (about $4k-5k a month).

From reading this thread, it sounds like using an FX company would be the best route for me.  I just have to shop around for the best rate and find someone that will transact these smaller amounts of money.  Is that correct?

Can you give me advice on finding such a company?  I’m sure I can randomly google FX companies and get quotes from everyone, but I’d rather not waste my time with many companies that will not be interested in the small amounts that I need to transact monthly. 

Also, once I do find a company, is the procedure something like this: I move to Spain and open an account in Euros.  Whenever I want to transfer money, I pay from my US bank account to the FX account.  The FX company then transfers the money into my Spanish account.  Is it that simple?  Can this be set up to all be done online?

Thanks in advance for answering my questions.  The information that you’ve provided already has been very helpful to me.  If there are FX companies that you can recommend (including yours), I’d love to hear them.  If you don’t feel comfortable “advertising”, I can provide an email address for you to send the name to me directly.

Regards,

Ansa

Hello! I am in a similar situation, I need to transfer US dollars to Euros and I am living Spain, Sevilla to be exact. I noticed this post is a few years old, I was hoping you would be able to tell me about your experience…. what company you choose?were reliable? This is the first time I will be transferring money through a company like this and I am a bit scared. Also I don’t know anyone else who has personal experience in this field. Any help would be greatly appreciated.

Un saludo

Christine

try using EDITED BY JURDY a money transfer price comparison service that provides independent comparison for people seeking the best way to send money abroad.

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