Is Skrill the cheapest method to transfer money online?

Skrill Hidden Costs : Analysis of Cost, Speed, Hassle and Risk

  • skrill-logoRequirements :
    • Open an account using an email address, link your bank account using swift and routing number.
    • Upload funds:  funds need first to be sent to Skrill account using wire transfer (free -takes 3 business days) , or using a service called NETELLER (instant – cost 1.9% fee) – Note NETELLER did not work for me in Canada. Uploading funds to Skrill account using credit card cost 2.9%. ($3 for $100 and $1000 for $30)
    • For a direct deposit, you can use third-party service called NETELLER, however, it can only accept credit card to verify account and charges 3% for upload.
    • In Canada, you can’t transfer funds to the a merchant account, only can be used to deposit money with MasterCard or Visa, and can withdraw money only with Netteler MasterCard (fee of US$5 for withdrawal, you can’t use to withdraw for US$ but you can withdraw other currencies for a fee of %3.15 foreign exchange fee ). You can’t withdraw US$ in general even with other countries.
    • Example Scenario :  “A” living in Dubai , transferring to “B” living in London. In Dubai you can upload using MasterCard or wire transfer (there is fee of 1.9% -5%) , then  there is 5$ for using cash machine in London(every time you withdraw there will be 5$ + 3.15% exchange rate fee for each withdrawal)
    • In Canada, you can’t upload money because I tried to use my MasterCard and it was rejected, the customer service informed me that I can’t use it as it was issued in Canada or USA.
    • The Customer service informed me that there is a limitation to using the service in Canada or the USA (No withdrawal in US$ is allowed, MasterCard upload money is not allowed) basically it is useless here in North America.
    • Even for Neteller to be used in another country like Dubai it is very expensive (For withdrawal only , there is a fee of 5 US$ + 3.15% exchange rate)

 

Analysis Scenario  :  Real test to transfer $100

    •    Speed:
      •  Speed (upload funds) :  3 options to upload funds : 1- MasterCard (Instant) 2: Wire to Skrill account in the UK (2-5 days) 3-Neteller (although instant it does not work in Canada)
      • Speed (sending) : Sending instant to someone with an email account.
      • Speed (withdrawal) : two options for withdrawal : 1- Bank Wire (2-4 bus. Days) 2- Cheque up to 10 business days
    •    Cost:
      • Cost (Uploading) : using MasterCard fees :
        1.  Skrill fees of %1.9 ($1.9 US$ for $100 upload) + MasterCard exchange from $CAD to US$ (rate of %2 cost $2-$3 for $100)
        1. Wire Transfer : Free from Skrill + Canadian bank wire transfer fee (US$ 20- $30)
      • Cost (sending) : Cost 1% from Skrill ($1 for $100 )
      • Cost (receiving) : Free
      • Cost (Withdrawal) : Two options for withdrawal
        1. Wire Transfer : cost CAD $5 + Canadian Bank processing fee (Est. $20)  *** see below the transaction
        2. Cheque : Cost CAD $5  (only possible to withdraw in CAD$ , the exchange rate fee is %2.9)* ** see below the transaction
      • Conversion rate: Skrill conversion rate is more expensive than Canadian banks . Add %2.9 on the exchange rate as a fee. This applies if you withdraw using cheque, or use MasterCard to upload funds.

     

    •   Hassle:
      • Hassle(Uploading) : Credit card and Neteller (Does not work in Canada) are instant but require a Master card to upload. Other option a wire transfer to Skrill bank. Hassle is High
      • Hassle(Sending) : No Hassle.
      • Hassle(Receiving) : need a Skrill account that is linked to a bank account to withdraw.
      • Hassle(withdrawal) :  Bank wire or cheque will take 3-10 days. Very high hassle

     

    • Potential:
      • Only for certain countries in Europe, this has potential to transfer funds instantly (used in gambling) although still an expensive option. It allows users to transfer funds between themselves directly.
    • Risks :
      • North America has limitations on using Skrill , Only money flowing from Bank to Bank or Master Card to account.

     

    • Testing Results:
      • Tested for US$100 Costs breakdown:
        • MasterCard Upload  :  CAD $ 136 for US $100 (Real market Exchange rate is 1.34 ) exchange rate fee %2 (US$2)
        • Skrill upload fee: %1.9  ==> US$1.9
        • Cost of sending : %1 ==> US$ 1
        • Cost of withdrawal :
          • Wire transfer : Skrill fee 4.3 US$ + Wire transfer fee Canadian banks  $20 (I was charged $15 fee in Scotiabank) = US$ 24.3
          • Cheque: Skrill cost US$ 3 + Exchange rate fee (%2.9) = US$ 3.8 + US$ 2.9 = US$ 6.7 (withdrawal in CAD$)

     

    • Conclusion:
      • Very costly with high hassle, does not work in North America (no way to send US$ without multiple exchanging from CAD$ to US$)
      • Very complicated.
      • Even in Europe and Middle-east it is very costly and high hassle option