💬 Sent money through a new app, lost 2% to hidden markup

A colleague kept telling me about a newer money transfer app. He said the fees were close to nothing. Last month I tried it for a transfer to my parents instead of my usual bank wire. Setup was easy. Verification took about a day. The app showed a transfer fee of zero rupees right on the screen. I felt smart. I sent around 4 lakh rupees and went to bed happy. A few days later I was comparing notes with my brother. He'd sent a similar amount through our regular bank. When we worked out the numbers, something was off. The rate the app gave me was almost 2% worse. I compared it to the rate shown on Google that same day. That's around 8,000 rupees less reaching my parents. Zero fee, and I still paid more than I would have through the bank. I felt like an idiot. I went back and read the app's terms. There's a line somewhere about rates including a service margin. It's the kind of line you skip. I skipped it. I trusted the big zero on the screen. I'm not naming the app because it was one transfer and the rate might have been odd that day. My brother thinks I'm too nice about it. He wants me to complain. I just don't have the energy. So I'm back with my regular bank for now. At least the rate and fee are both shown there. I can check against the market rate before I confirm. It's slower and it looks more expensive. But I know what lands at the other end. My mother asked why I was so quiet that evening. I told her it was nothing. Now I check the amount that arrives, not the fee, every single time.

I'll push back a little. Not every app does this, and I used one for 2 years without a problem. The trick for me was comparing the rate with that day's rate before sending, every time. Some days it was close and some days it wasn't. Your colleague probably never checked the rate himself. Does your brother's bank give a better rate every month, or was that day lucky?

Don't feel too foolish. I did the same with a bank once and only checked afterwards. What I do now is send a tiny amount first, see what the other side gets, then send the big one. It costs a little extra but I haven't been surprised since. Did the app show you the rate before you pressed send? If it did, take a screenshot of that line next time.

A friend of mine had the same thing. His app also showed zero fee on the front screen. He only noticed because his sister in Hyderabad sent him a screenshot of what arrived. After that he kept a note on his phone with 3 options and what each one gave that day. Takes him 5 minutes. Try that before your next transfer. 8,000 rupees is a lot of groceries.