For years, bank customers in SA have griped about the excessive costs of sending and receiving foreign exchange: an average 2-3% of the transaction value unless you’re an A-list client.
Customers have put up with this for far too long because they lacked an alternative. Paying 2-3% on every forex transfer positions the banks as toll collectors on every cent that moves across our borders. A few years ago, this was reckoned to make the major banks upwards of R15 billion a year – at almost no risk.
Future Forex has disrupted the oligopoly in this space, charging 30-50% less for forex than the banks while offering a level of personalised service the banks have long promised but never quite delivered.
Losing such a significant portion of your funds just to move them to an offshore bank account seems absurdly unnecessary given the technological advances that should make this a cinch.
So why are these bank charges so high?
“For one thing, it is difficult for most customers to work out exactly how much they are being charged by the banks, since most of the costs are buried in the buy and sell prices. The wider the spread between these two, the more you are paying,” says Harry Scherzer, CEO of Future Forex and a qualified actuary.
Some costs are more visible, such as the SWIFT fees, which usually vary between R500 and R1 000. Some banks will also add a “commission” fee, but the real damage is in the hidden spread. Banks are neither transparent nor consistent in how they charge this fee, but few bother to question it.
“We spend a lot of time educating customers on how the banks actually charge for forex, and in truth, it can be exceptionally misleading,” adds Scherzer.
Future Forex charges roughly 50% less than the banks on forex for individuals and as much as 30% less for businesses, though this depends on the size of the transactions and other factors.
That’s a massive difference for South Africans purchasing property abroad, investing offshore or for companies involved in imports/exports.
For those investing offshore, these savings can make a substantial difference to your portfolio performance over 10 or 15 years.
The same is true for companies involved in international trade. A 30% saving in forex translates into higher margins and more profitable businesses, and those savings scale with transaction size. For SMEs, this improvement to the bottom line isn’t pocket change – it’s a game-changer.
“Forex costs in SA have been way too high for too long, and we’re here to challenge that status quo,” says Scherzer.
The banks’ forex stranglehold increases the costs of everything that crosses the South African border – offshore investing, buying a villa abroad, tax emigration, settling estates, or importing goods.
“This market’s begging for a shake-up, and we’re delivering,” Scherzer says.
Tech meets a personal touch
Future Forex isn’t just cheaper, it’s also smarter and fully customer-centric. Most bank customers have had the experience of dealing with call centres or chatbots when chasing a forex payment or trying to resolve an issue, and it can be infuriating.
Future Forex blends cutting-edge tech with hands-on assistance from a dedicated expert. “Our platform is easy to use, efficient, and cost-effective, but it’s the human element that truly sets us apart,” Scherzer says. “Every client gets a dedicated account manager to help navigate compliance hurdles, track transfers and avoid the normal headaches that come with forex transactions.”
Future Forex clients can conduct their entire international money transfer process using a mobile or web app (available on Apple and Google Play), while also having the option to work directly with their account manager if they prefer to do so.
The regulatory maze
Forex isn’t just pricey in SA – it’s also a regulatory nightmare due to our complex exchange controls. However, Future Forex streamlines this process, handling SA Revenue Service (Sars) and SA Reserve Bank (Sarb) compliance at no extra charge. This includes managing Sarb approvals, Advanced Payment Notification (APN) numbers, and Approval of International Transfers (AIT) applications.
“We deal with the red tape, so our clients don’t have to worry about it,” Scherzer adds.
“Customers are fed up with banks raking in billions while offering slow and impersonal service. We’re offering South Africans a much-needed alternative to the banks, one that is cost-effective and backed by white-glove service.”
Contact
Future Forex can be contacted via email or by phone at 021 518 0558. For more information go to Personal Forex or Business Forex.
Brought to you by Future Forex.
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