Generally speaking, when offering quotes to our private clients Prime Cap Payments marks up the wholesale rate of exchange we receive from the FCA regulated market-makers with whom our clients register by between 0.1 and 0.25%. Retail banks 'bake-in' their fee to their rate of exchange, but, customers have no come-back to the rate a bank quotes over platforms like internet-banking or via telephone and so customers are often forced into a take it or leave it dilemma.
The mark-up we incorporate in to our quote does vary depending on the contract type, the amount of currency a client is exchanging and number of other bespoke features woven into the service we deliver.
With the SDLT surcharge for overseas buyers sitting at a sizeable 3%, anything that a specialist company like us can give back to the client in a more competitive rate of exchange tends to be gratefully received - but, we have noticed is that few individuals, high-net-worth or otherwise, or/and their advisers are familiar with alternatives to the traditional banking currency exchange model. Would-be clients are unaware they can potentially save themselves up to that 3% when they convert their capital into to GBP Sterling. We work with the clients of a lot of solicitors and property professionals, but, the margin by which rates of exchange can be improved for clients tends not to be given much weight.
Whenever we are introduced to a potential client we suggest that they conduct a rate comparison. Rates of exchange move up to 52 times a minute and so it can be hard to accurately compare a rate of exchange published in the morning with a rate published at lunch time, for instance. Therefore we suggest clients ask their bank directly for an indication as to the rate of exchange they could expect were they to exchange £x or €y and then call or email us soon after.
In the most extreme of cases we have known banks to apply fees that reflect what is called the 'tourist rate'. The tourist rate is generally used to calculate cash or bank not bureau de change services and can see a rate inflated by as much as 5%.
The most significant saving we have delivered a client on a vanilla, property-related transaction, was 2.74% (a saving for our client of nearly $120,000). Our client banked with Wells Fargo and had already exchanged a significant number of dollars prior to our inclusion in the process. Not only were we able to compare against the initial rate the client received, but, we quoted directly against a real-time quotation offered to the client by their personal banker on the day of the exchange. This is how we can be sure of the significant improvement/saving achieved.