It's a matter of weeks until the Payment Services Regulations could finally end the currency exchange rip off for the 21 million adults who exchanged money in the last year, as well as the 3 million SMEs that sent and received money overseas.
Right now, banks and brokers are hiding the true cost of foreign currency. They quote an attractive price to consumers- all the while hiding the full cost in a poor exchange rate, charging on average an extra 29% on a typical GBP to EUR transaction.
The second Payment Services Directive (PSD2) states that the use of “non-transparent pricing methods should not be allowed”, as it prevents consumers from establishing the real cost of a service. Indeed, 71% of ‘savvy’ UK consumers who regularly transfer money abroad miscalculated the amount they are being charged when shown a typical bank’s pricing structure.
In the 2015 General Election, the Conservative Party pledged to bring an end to non-transparent pricing structures that disproportionately affect SMEs and consumers. However, the draft Payment Services Regulations, which will transpose the PSD2 into UK law, fail to uphold the transparency mandated in the original legislation.
We only have a few weeks to use the PSRs to make foreign currency transactions as transparent as same currency payments, so consumers and businesses alike know how much it costs to use their own money.