…and it’s not the overnight inter-bank rate.
We had to send 25 Euros to an agency of the German government. They would accept no form of payment but a bank transfer – no cheques, credit cards, money orders. It had to be a bank transfer to a specific branch and account.
So we paid our local TD Bank $30 in fees to handle the 30 seconds of paperwork (which itself is absurd in this era of electronic funds transfers) and waited for the transfer to work its way through the system.
When, after a few weeks, there was no response from Germany, we followed up to find that the recipient only got 5 of the 25 Euros sent. So it was back to our bank where we were told they “think” it’s because the transfer was handled by 2 banks in Germany, each of which took a 10 Euro fee, leaving just 5 Euros for the ultimate payee.
Our “helpful” banker offered to do some more research to confirm that, but indicated that would entail a further $10 service charge. Instead we could assume that’s what likely happened and just send the missing 20 Euros. For another $30 TD Bank fee. And keeping in mind that the German banks will skim off another 20 Euros when it gets there.
So at the end of the day, a 25 Euro ($40) interbank transfer to Germany cost:
- Funds to payee – 25 Euros ($40)
- TD Bank fees - $60
- German bank fees – 40 Euros ($64)
For a total of $164!
Now there’s a problem I’d like to see old Flim-Flam Flaherty try to fix – the usurious fee structure on the international movement of money in this so-called global economy.