High inflation is currently worrying many consumers. There are also items that cause unnecessary costs. An example: Banks in Germany are currently charging double the UN targets for international transfers. That costs billions.
German financial service providers charge much higher fees for cross-border transfers to family and friends than those stipulated in the UN Sustainable Development Goals for 2030. This is shown by a recent analysis of World Bank data by the technology company Wise and Prof. Sandra Sequeira from the London School of Economics.
These payments are also called remissions. Wise’s latest Remissen report sheds light on average costs in some of the largest G20 countries, including the US, UK and Germany. In addition, the study forecasts the development of fees up to 2030. According to UN Sustainable Development Goal 10c, the price should then drop to less than three percent per transfer.
In 2022, remittances of around 206.6 billion euros will be transferred from twelve G20 countries to other countries. An estimated 11.7 billion euros in fees are incurred for this. This corresponds to an average fee of 5.66 percent. Even if the costs are falling compared to the previous year, they are still well above the UN target of three percent by 2030. If the twelve countries examined were to meet the United Nations sustainability goal today, the transfer recipients could receive 5.2 billion euros more.
Based on figures from the World Bank, the study expects remittances from Germany totaling 22.4 billion euros for the current year. This corresponds to an increase of around 33 percent compared to the previous year. The transfer costs are expected to fall from 6.53 percent in the previous year to 5.83 percent in the current year. This puts Germany well ahead of Italy (4.37 percent) and Great Britain (5.62 percent). In France, on the other hand, the fees at 6.41 percent will even slightly exceed those in Germany in 2022. In total, people from Germany will pay 1.4 billion euros in fees for remisses in 2022. An increase of 27 percent over the previous year. If Germany were to comply with the UN requirement today, consumers could save around 730.7 million euros.
Between 2012 and 2021, people paid a total of 15.3 billion euros in fees for money transfers from Germany to families and friends abroad. The only consolation: During this time, the fees fell from around eleven to 6.53 percent, partly due to offers from digital payment providers. But still sensitively high.
About the research: Calculations in this report are based on Remittance Prices Worldwide (RPW), Q2.2022 published by the World Bank. Transfer costs expressed as a percentage always reflect the cost of transferring $200. The entire methodological analysis was carried out in consultation with Sandra Sequeira (London School of Economics).
No consumer can do without a checking account. In view of the significant price differences between individual banks, consumer advocates are demanding more cost transparency from providers. And they advise bank customers to find out more about any costs that may arise.
The FOCUS Online Guide answers all important questions about pensions on 135 pages. Plus 65 pages of forms.
