Why don't banks charge fees for ACH transactions?

Transfer from abroad to Germany

For a transfer from abroad to a German account, by and large the same rules apply as for transactions in the opposite direction. Depending on the country of origin, consumers can use the SEPA transfer, otherwise the international foreign transfer applies. So the idea seems to be better to transfer money with a service provider who specializes in money transfers.

  • The SEPA transfer from abroad to Germany must have reached the recipient account within 1 working day if it is an online transfer. 2 working days apply to paper SEPA transfers.
  • Various costs can arise: Fees for processing, fees of the sender, recipient and / or correspondent bank & non-advantageous exchange rates.
  • It is difficult to determine the total cost in advance as the prices of the banks vary and there are always several banks involved in the process.
  • There are providers with whom you can transfer money from abroad to Germany at the mean exchange rate (the exchange rate of the financial markets). There is a small fee that is transparent from the start. You can do that with Wise, for example. In this way you avoid the sometimes bad exchange rates and hidden costs.
  • If you would like to use your bank, a conventional transfer with IBAN or SWIFT-CODE and the name of the recipient is possible. In retrospect, for example, you can use a currency converter to check how high the costs of your transfer were.

Cost of a transfer from abroad to Germany

It does not necessarily have to be the case that a foreign transfer is associated with costs. As a rule, there are no transfer costs if the money transfer is made from bank account to bank account within the SEPA area or EEA (European Economic Area) and in euros.

As soon as transfers from abroad to Germany are not carried out in euros and there is therefore a currency exchange, the sender and recipient must expect costs. This sometimes even applies to the SEPA area if a transfer is made to Germany from a country with a currency other than the euro. Then the IBAN and BIC can be used, but a bank has to exchange the currency - for example from Swedish kronor to euros.

But what are the specific costs of a transfer from abroad? In principle, it is impossible to make generally valid statements about the amount of the costs. Too many factors such as the amount, the banks involved or the selected fee option influence the transfer costs.

Calculating the transfer costs in advance is also impossible because the fees of the correspondent banks remain in the dark for the consumer.

However, it is very easy to say what types of costs are incurred. An important pillar are the fees that any bank involved in the transfer process can call up. You can find the fees in the list of prices and services.

Transfer fees arise, for example, as a processing fee, but brokerage, third-party fees and a fee for incoming payments on the German account can also be charged.

Each bank decides for itself whether this is done as a percentage or a fixed amount. The house bank, recipient bank or intermediary correspondent banks charge special fees for special services.

Such surcharges increase the transfer costs most often because the client has a particularly rapid processing in the form of a Express transfer wishes. The second major item is all those expenses caused by the exchange rate.

The fintech startup Wise was founded in London in 2011.

  • You can Transfer at the "real" exchange rate of the financial markets, the so-called mid-market rate

  • You can recalculate the fee on the homepage and this is always transparently displayed to you before the transfer is completed

  • An international transfer with Wise is up to 5x cheaper than banks

  • In Germany TÜV-certified service

  • Customer support in German via chat, email or phone

  • Regulated by the Financial Conduct Authority (FCA), the UK Financial Markets Authority

  • Over 7 million customers already use Wise

You can easily process classic bank transfers in foreign currencies via Wise. This avoids non-transparent fees and bad exchange rates from your house bank or the correspondent and / or recipient bank.

to offer

If a currency has to be exchanged for euros, banks use their own exchange rate. This is different from the real mid-market rate, which you can easily find by doing a Google search.

The mark-up increases the profit for the bank that ultimately carries out the currency exchange. The rate differs not only from the real exchange rate, but also between banks. Experience has shown that credit institutions do not deal with it transparently, which means that customers often have to actively inquire first.

Three types of fee sharing for paid transfers

If you want to transfer money from abroad to Germany, you can choose between three payment options. The decision means that the allocation of the transfer costs between sender and recipient is clearly regulated.

You can choose from the following three types of fee sharing for paid transfers:

Costs are shared between the client and the beneficiary

Sender assumes all costs

Recipient pays all transfer fees

In most cases, SHARE is the default setting, but some banks choose OUR. In general, it is advisable to discuss the selection with the beneficiary.

Under certain circumstances, the decision is almost made by itself. If you have to pay an invoice or if the recipient should receive the full transfer amount for other reasons, OUR is the perfect choice for the client. Then you pay all costs and the beneficiary does not have any deductions from the money transfer from abroad.

Alternatives to international transfers

Consumers transfer money from abroad to Germany safely and reliably not only with banks. As an alternative, specialized service providers are increasingly being offered that enable money to be transferred from abroad.

It is mostly young FinTechs who score with innovative business ideas and a infrastructure that is clearly superior to traditional banks. As a result, these companies not only process international transfers faster, but also more cheaply.

The most popular money transfer providers are the following:

  • PayPal
  • Wise
  • TransferGo
  • Azimo
  • World Remit
  • Western Union
  • Xendpay
  • MoneyGram

Many of these FinTechs use a global network of bank accounts, which means that currency exchange is no longer necessary, as is the case with providers who exchange their customers' money with one another. In fact, it does not leave the respective country, which reduces the fees and shortens the transfer time.

Some service providers such as Western Union, World Remit and MoneyGram even allow cash pickups.

Neither the client nor the beneficiary need a bank account, as the money can be deposited at one of the company's locations via credit card, instant transfer or cash, and the recipient can collect it as cash at a location in the destination country. This can usually be done within a few minutes.

Consumers should find out beforehand whether the provider they are considering actually covers the country in question.

The combination of fees and exchange rate is also important when choosing a service provider. Each provider uses its own course, but the differences are not too great.

Basically, the exchange rates at Azimo, Moneygram and Co. are much fairer and closer to the real mean exchange rate than is the case with banks.

Wise even uses the real exchange rate, which also means foregoing profit. Only the fees apply to the sender. In contrast to an international transfer with banks, clients already know in advance how much money will actually reach the beneficiary. The fees are shown transparently, so there are no nasty surprises.

Foreign transfer by country

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