Archive for February 5th, 2013

Daylight robbery: Barclays skims €170 off a 5K EUR -> GBP transfer

Tuesday, February 5th, 2013

Last month (on Jan 18, 2013) someone I’m doing some work for initiated a transfer of €5,000 into my UK bank account. According to xe.com the mid-market rate that day was 1.1937940679 euros per pound.

So you might innocently expect to receive about 5,000 / 1.1937940679 = £4,188 minus any transfer fees.

The transfer went through an intermediate bank, who charged €17. Barclays charged “our commission” of a mere £6.

But the amount that arrived in my bank was not roughly £4,188 – £20 = £4,168 as you might hope.

The amount that arrived was £4017.74.

The friendly banks decided that the appropriate exchange rate for me that day was 1.23840, which is a full 4.5% higher than the mid-market 1.19379 rate. That’s £143 (€170).

Sure, I know there’s a buy/ask spread in currency and the mid-market rate isn’t what you’d get in any transaction. But taking £143 from your own customer just because you can is pretty fucking nasty. And so, via today’s arbitrary setting of the greed parameter in a bank computer, the voracious banking industry gobbles up just a little bit more of the money made by regular people. People who actually worked to earn that money.

It’s no wonder people hate their banks and that the financial system in general is so despised.