Exchange Rate & Fees
Fees are variable and often come by surprise. Western Union’s website admits that “Fees start at $4.99 to send up to $20 online.” But they never explain what the full range of fees is, on our testing we have been charged as much as $160 to send $4,000 abroad! (through debit card funding). That is remarkably more expensive than it would have cost with some of their competitors like Transferwise or Currencyfair.
For mobile transfers, the fee is more reasonable but still very high: $1 for up to $10 sent.
Our research, backed by statistics from data from the World Bank demonstrates that Western Union’s fees and exchange rates are more expensive for the end-client than with competitors. On most currency routes that competitors like Transferwise or Azimo are able to handle, Western Union is more expensive. On its online platform you can see that the differences are sometimes quite small, while on WU branches, it is normally a lot more expensive.
$1 to $7,500, or currency equivalent, based on the online calculator. It is safe to assume that if you need a bigger amount sent, you will be either moved to WU Business Services or get higher permissions on your account upon a compliance check.
The minimum amount to transfer online is $20 or equivalent.
Western Union money transfer is notorious for relatively high margins. While in many cases, and particularly on cash to cash transfers into areas where remittance providers are scarce. Even the former secretary general of the UN has proposed to look into this phenomena carefully because high remittances cost lead to a direct impact on some of the poorer countries in the world.
The costs of sending money even through more popular corridors is extremely high in comparison to some of the competitors.
From WU.com’s online calculator taken 16:04 UK time with a real mid-market rate of 1.35 USD to AUD, these are the rates that were provided:
These rates represent a margin of 3-4% just on the exchange rate, while the fee for a Debit Card payment represents additional 4%! In comparison to that view Currencyfair’s online calculator below:
The rates offered by Currencyfair was 1.3325 which represents a margin of just over 1% which is far more reasonable for this corridor.
Although some may say comparing Western Union’s rates to the pure-online providers isn’t fair because WU has far more costs in the form of thousands of offices and hundreds of thousands of employees, we say that Western Union should revamp their pricing model to stay competitive in these the popular routes of GBP-EUR-AUD-USD.