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The High Cost Of Exchange
Weekend AGE - 24 November 2002Individuals and small-business customers are getting a raw deal on foreign exchange, according to foreign exchange service OzForex (www.ozforex.com.au). OzForex canvassed for ex quotes from six major providers, five banks and one non-bank to buy £8,000 to send to the United Kingdom by telegraphic transfer. The results showed the best provider on the day charged a margin of about 1.2 per cent on the underlying "Interbank" rate, with the worst provider charging a margin of more than 2 per cent.
Each 1 per cent of margin equates to about $230 of extra cost on the British pound purchase before additional transfer costs are paid.
The managing director of OzForex, Matthew Gilmour, said that, unlike the sharemarket, where investors big and small have access to the same price to buy or sell shares, foreign exchange is not a level playing field.
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