Transferring money to Thailand from your home country, be it the US, Canada, Australia, or the UK, has been a pain point for just about every expat at one time or another. But we all have to do it.
The scale of it is huge.
In 2019, Over 7 Billion USD was remitted to Thailand. Among the top sending countries were the US, Germany, Australia, UK, and Sweden. (Source)
You can bet your bottom dollar a huge amount of that can be attributed to expats funding their Thai bank accounts, and of course sending money to Thai partners.
We all know banks are generally a rip-off when it comes to sending money, but hiding your money under a mattress isn't exactly a safe bet these days – not that it ever has been.
This sucks: because they have us like a puppet on a string; free to slap on big fees and unfair exchange rates when we want to transfer money.
When you sit back and think about it, it's the strangest thing: You are charged to withdraw your own money!
Okay, so you are abroad. You expect to pay a small fee, but not for the bank to make a big profit out of it. And believe me, they do.
There is a solution, and I'll get to that in a moment. But first let's look at how the fees rack up.
The 4 Pain Points of Transferring Money to Thailand
1: Transfer Fee
The SWIFT transfer fee can be anywhere from £10-25 / $15-30. If you make regular transfers, say two a month, that's going to run you near on £250 / $320 a year!
And we're nowhere near done with fees yet. Read on.
2: Receiving Fee
After the transfer fee, you get hit by the receiving bank for another amount of about the same. Most banks such as Bangkok Bank charge a maximum of 500 Baht.
So you've already paid twice to transfer your own money, and that's without the currency conversion charge.
3: Currency Conversion Charge
Out of the three fees, this is the evil one.
Most people presume you get the mid-market transfer rate. This is the one you see on XE .com. But then you do the math and realize that you've been shortchanged, massively!
In the world's currency markets, traders define the rates at which they are willing to “buy” or “sell” a specific currency. The mid-market rate is simply the midpoint between demand and supply for a currency, and because of that, it changes all the time.
But that's as technical as you need to get. The most important thing to know is that the mid-market rate is considered the fairest exchange rate possible. The mid-market rate isn't a secret either. It's the rate you will find on independent sources such as Google, XE and Yahoo Finance.
Unfortunately it's not the rate they pass onto you.
It's one of the ways they can hide the true amount they're charging. Most banks take the mid-market rate and apply a margin on top, without being transparent. So you have no idea how much they're over charging you by.
By hiding their charge in the exchange rate offered to you, banks make huge profits at your expense, and you're none the wiser.
You can offset the loss slightly by choosing to send money in your home currency, but many people sending money to Thailand make the mistake of choosing to convert to Thai Baht at their source bank instead of at the Thai end.
Remember: This means you lose even more money, because your bank steals a nice chunk of cash on their own exchange rate, a rate they set themselves – not the “mid-market rate”.
That said, the Thai bank will still convert your currency to Thai Baht at their own rate too, and make a enough for a meal out. But they generally won't squeeze your pockets as hard as your sending bank (your home bank).
4: Transfer Times
So, you've had your pockets skimmed on all fronts.
You have paid two transfer fees, and a currency conversion charge.
But even after they've dipped their finger in your honeypot multiple times, the banks still can't promise the money will be there within 48 hours. That's a real kick in the teeth.
Hell, sometimes it takes as long as 5-7 days!
Like It or Lump It, Or…
Sending money to Thailand is expensive, but what other option do you have except the bank?
You could carry money through customs, but then how often do you fly home to be able to do that?
To be honest, I hate carrying a ton of money around with me. It's just not safe.
Western Union is too expensive, but good if you need cash wired immediately. And PayPal steals 3.5% on a transfer and charges up to 4% currency conversion fees. Yes, I said up to 4%. It's 3% for the UK (where I'm from).
Well, as you probably guessed, the point of this post is to reveal that there is a solution. Thank Buddha!
Seriously, I waited years for this. You can now transfer money to Thailand with ZERO bank charges, get the Mid Market Rate currency conversion and only pay a small fee.
Typically that fee, on £1,000 is 0.35%.
I know, it's hard to believe, but I'm doing it and so now are hundreds of readers of TheThailandLife.
Check this out:
Here is the rate I got from Wise on 13th May, 2020 on 1,000 GBP:
Yes I know, the Pound (£) is weak and getting weaker.
But now look at the bank transfer rates of four high-street banks. Wise (formerly Transferwise) beats them both, comfortably.
The exchange rate is lower and the fees are higher.
Now look at the market rate for the same time of day on XE.com.
Unbelievable, right? The overall Wise rate is actually slightly better!
So: not only did I get a better rate than my bank, I got a better rate than XE. com, which is the mid-market rate.
But that's not all: I only paid a £6.81 fee. Usually, my bank (Nationwide) charges £20. Plus I'd have to pay 500 Baht (£12) to my receiving bank in Thailand.
So altogether, with the favorable exchange rate, I saved over £50 with Wise (formerly Transferwise) over transferring with my bank!
Sending USD to Thailand
For my friends from the USA, here's how things size up in dollars:
The dollar isn't very strong against the Baht at the moment, but again, the Wise rate is better than the market rate on Xe.com (below).
Usually the rate is the same or slightly better, but note that rates change by the second at times in the market. You can also check Reuters for comparison.
I was so over the moon with my transfer that I popped off an email to them and asked if I could get more information so I could blog here about it (see below on how it works).
They wrote back and offered to give my readers a free transfer up to £1,000/$1,000. Click that text link back there < to get the free gift.
Banks could charge you up to 5% in hidden costs when sending money to any bank account abroad. Wise is up to 8x cheaper. It's only fair.
How Does Wise (Transferwise) Make Sending Money to Thailand So Cheap?
Well, with investment in the company from the likes of Richard Branson, I guess anything is possible.
But actually, it's quite genius.
Once you initiate the transfer, Wise searches for other people doing a transfer from the location you are sending to, and effectively swaps the currency.
Of course, money transfers being as frequent as they are, this means there's usually several matchers available, making the process very quick.
My first transfer completed within 48 hours; 2-3 days quicker than my bank.
There are readers in the comments section who've received their money to Thailand within 24 hours.
The process is completed by making several individual conversions using effective market exchange rates that work in your favor.
In other words, different parts of the transfer can be converted using different exchange rates.
Normally it takes a day or two to process conversions. For bigger amounts it could take longer.
Here's a cool video that explains how it works:
Here's a Quick Benefits Summary
Wise, formerly Transferwise, was founded on the principle that people deserve transparency, fairness and better value when it comes to their money.
I think the large majority of us would agree with this principle and have waited a long time for a service like this.
Wise is on average 7x cheaper than traditional banks when you send, spend, or withdraw money around the world. (Though this depends on each country).
Here's a quick benefits summary:
- No home country bank fee.
- No receiving country bank fee.
- Get the true Mid-Market rate currency conversion, or better!
- Fast transfer, especially on amounts below 5k. Approx 48 hours.
- Once you're comfortable with the system, you can use the iOS or Android app for transfers on the fly.
Boy does it feel good to avoid those bank fees!
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