Foreigen transaction fee clear disparity between main banks alternative banks

j813ys

Why do the smaller offerings eg. First direct, Monzo, Virgin, Starling, Chase all have fee free use of debit cards abroad whilst the main banks eg Lloyds, Natwest, Barclays, HSBC all charge fees, or make you pay for not having the fees?

Surely it should be standard in todays globalised world. If the smaller ones can do it, surely the big ones can.

grumpy_codger

Fees have nothing to do with the actual cost. As simple as that.

"In todays globalised world" even in the same country for the same goods you can find highest prices twice (or more) as much as the lowest.

They charge as much as their customers are willing to pay (or don't care how much they pay).

BTW, the same HSBC offers product(s) with low fees for customers that do care. So does Halifax.

eskbanker

j813ys said:

Surely it should be standard in todays globalised world. If the smaller ones can do it, surely the big ones can.

Just to add to the above explanation of why there shouldn't be any expectation of standardisation as such, the bigger players are the ones with a higher cost base, arising from a range of factors including running branch networks, operating legacy systems, etc, so smaller ones can be nimbler and able to offer more competitively priced products.  The 'best buy' savings tables tend to reflect this too....

zagfles

The difference isn't so much between providers but products. First Direct are part of HSBC and only just recently changed to fee free foreign usage. I have two Barclaycard credit cards, one with fee free foreign usage inc cash, and one that charges. And a Halifax Clarity which doesn't charge but most Halifax cards do.  

Foreign exchange markups are an easy way to charge people without them noticing. So providers tend to offer products with no fee for people who have a bit of a clue, but they want to continue taking advantage of majority who may only travel once a year and who don't bother looking at fees or rates. A bit like gullible people believe the sort of rubbish like "commission free" foreign currency when there's a 10% buy/sell spread hidden in the rates.  

born_again

j813ys said:

Why do the smaller offerings eg. First direct, Monzo, Virgin, Starling, Chase all have fee free use of debit cards abroad whilst the main banks eg Lloyds, Natwest, Barclays, HSBC all charge fees, or make you pay for not having the fees?

Surely it should be standard in todays globalised world. If the smaller ones can do it, surely the big ones can.

If that was the case, then no company would be able to offer something different.
Like fee free. Which they will claw the money back another way.

Even fee free cards can be charged for ATM use, as the charge is for levied by the bank running the ATM. Very much like some ATM in the UK, where you can be charged for using it.

wmb194

HSBC's Global Money account isn't bad.

https://www.hsbc.co.uk/current-accounts/products/global-money/

Rob5342

eskbanker said:

j813ys said:

Surely it should be standard in todays globalised world. If the smaller ones can do it, surely the big ones can.

Just to add to the above explanation of why there shouldn't be any expectation of standardisation as such, the bigger players are the ones with a higher cost base, arising from a range of factors including running branch networks, operating legacy systems, etc, so smaller ones can be nimbler and able to offer more competitively priced products.  The 'best buy' savings tables tend to reflect this too....

It's also about the customers too. Smaller providers have to offer something to get people to switch to them, bigger ones have an established set of.xustomers, a lot of which will stay no matter how bad the deal they get is so they take advantage of that and charge more. 

j813ys

Well well well, it looks like lloyds are now bringing fee free abroad to the masses.

https://www.lloydsbank.com/current-accounts/all-accounts/club-lloyds.html

It's still on a paid for account, but I'd imagine most with it wouldn't pay that fee.

Hopefully the rest will follow!

username

I think it's a case of because they can charge for it, they can, and will. Banks aren't obliged to be charitable, nor should we expect it from them.

Also another passive income stream for them - I suppose that's how TSB can justify the £1 abroad spending charge, plus the FX markup. I didn't think such a thing still existed, I remember getting bitten years ago buying something in USD on my Lloyds card. It wasn't anything massive, maybe 5 bucks or something on an album on a download site.

(Interestingly all of the banks with the spending charge are/were used to be part of LBG at some point or another - https://www.moneysavingexpert.com/credit-cards/travel-credit-cards/).