A coalition of major banks this week confirmed they had gone live with a new international framework for consumer cross-border transfers, under which customers will be shown the exact fee and exchange rate before sending money abroad.
The framework, developed under the Interbank Messaging Consortium, requires participating institutions to display all applicable charges up front, in what industry observers described as a significant step towards transparency.
"For the first time, customers can see precisely what they are paying," an unnamed executive said. "There is now no ambiguity."
The ambiguity had previously been the only part customers understood.
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Under the new rules, five founding institutions — BeigeBank, HeritageBank, AppBank, RevolvingBank and Birdish Bank — will present the total cost of each transfer, including the margin applied to the exchange rate, immediately before the transaction is confirmed.
The figure will appear on screen, clearly formatted, in the moment before the customer proceeds.
The figure is unchanged.
"Transparency was the priority," a senior compliance professional said. "The pricing was reviewed separately."
Sources familiar with the framework confirmed the review of pricing had concluded that the pricing was appropriate. One participating bank noted that early testing had shown customers completing transfers with full knowledge of the cost, and that completion rates had not moved.
A phased approach
Institutions confirmed the display of fees represents phase one. Phase two will assess whether the fees themselves warrant examination. The examination will follow a consultation. The consultation will build on the framework. The framework is now live.
By the conclusion of the pilot, the word "transparency" had appeared in the accompanying documentation forty-one times. The word "lower" did not appear.
"This is about empowering the customer," an industry observer said. "The customer is now fully informed."
The customer remains charged.
In the meantime, participating institutions confirmed they remain committed to putting the customer first. Customers can now see exactly what they will lose, in real time, before they lose it.
The Immutable Ledger