Here we show you who has the best money exchange rates for sending money to or from Chile. Below are 11 actual transactions from Afex, Xoom, PayPal (Multicaja), Wells Fargo (ATM withdrawal), and American Express (credit card charge). You can copy and paste the table below into Microsoft Excel to more easily read the numbers.
Click on the image to enlarge too after you read the summary below.
You need to understand that the money transfer agent is profiting (i.e. charging you money) when you transfer money between Chile and another country in two ways: (1) the transfer agent profits by giving you less than the market rate for converting pesos to dollar or dollars to pesos (2) and they charge you a fee. (The market rate means the exchange rate as it is determine by the currency trading markets around the world, in order words this is the number when you type “convert 1 USD to CLP” in Google Chrome.)
Here are 6 different ways to send money between Chile and and another country.
Afex—you can send money to your bank from Afex offices in Chile. (Afex mainly exists for tourists and other foreigners to receive money from MoneyGram or other transfer agents where they pick up the cash in person.) You can send money to an American or other bank by going to their office and selling pesos there. If you will do this frequently, you can set this up with the branch to initiate this transfer automatically by sending pesos from your Chilean bank account to Afex’s Chilean bank account.
American Express—when you use your American Express credit card in Chile,you pay a fee to American Express plus they charge you another fee by giving you less that the market conversion rate on that day.
Multicaja—they transfer funds from your PayPal account to your Chilean bank account.They are one of the most expensive.
Wells Fargo—bank ATM. Here you get charged two times: Wells Fargo charges a fee and the ATM where you withdrawn the cash charges you a fee. There are no ATM fees in Chile, except when you use a foreign debit card to withdrawn funds. Then the fee is 4,000 pesos. Banks do not profiting from exchange rates; they give you the market rate.
Xoom—is an online site for sending dollars from an American bank to deposit into a Chilean bank or someone can go pick that up at Afex.
PayPal—we show this example to explain how PayPal is charging you when someone sends you money with PayPal. PayPal is operating as a global banking monopoly with no apparent regulatory oversight and no competition. When you send money with Paypal there is no currency exchange profit. Instead PayPal deducts a fee instead from the recipient., unless the sender is paying the fee. As you can see in the chart below, PayPal is charging around 4%, which is very expensive.
Understanding How Much Money Transfer Costs You
Below is a list of 11 actual transactions between Chile and the USA.
The chart shows the transfer agent (Afex, American Express, Multicaja, Wells Fargo ATM, Xoom), the market rate of pesos per dollar on that date, the actual rate the transfer agent paid and the fees they added on top. Then we show their actual profit, meaning how much they deducted from the transaction in terms of dollars and then show that again as a percentage. How much they deducted is what they took from your transaction or what is cost to to send money. If it costs you 4% then you only collect 96% of what you sent and lose 4% in transaction fees.
As you can see, on average, Afex is cheapest way to send money from Chile. Their average commission is 1.3% percent. The most expense transfer agents are with Muticaja 2.5% and PayPal 4%. Xoom is 2%. American Express 1.3%. Wells Fargo ATM withdrawal is charged fees twice: by Wells Fargo and by the bank in Chile who owns the ATM when the money was withdrawn.
Pesos to Dollars and Dollars to Pesos
The direction you are sending money determines whether you are buying or selling pesos. If you send money to Chile (like with Xoom or Multicaja) you are selling dollars and buying pesos. If you send money from Chile to, for example, the USA, you are selling pesos and buying dollars. For the transactions below, the direction does not matter. The only thing that matters is the spread: meaning the difference between what you hand them and what they give you in the other currency. For a credit card, there is no money transfer per se, instead the credit card company charges your card in the currency in which the card is denominated. They profit the same way as the money transfer agents: they charge a conversion rate profit and a flat fee.
Copy this table to the clipboard then paste into Excel to read it easier.
|Transfer Agent||Dollars||Pesos||Date||transfer fee||agent rate paid||market rate that day||conversion rate profit %||agent total profit: transfer fee + conversion rate profit||agent profit percentage|
|American Express||$ 205.25||120,000||9/13/2014||5.54||584.653||593.000||1.41%||$2.65||1.29%|
|Multicaja||$ 375.00||207,740||8/25/14||$ 10.00||553.973||597.401||7.27%||$17.26||4.60%|
|Multicaja||$ 350.00||165,023||9/25/2013||$ 10.00||471.494||496.037||4.95%||$7.32||2.09%|
|Wells Fargo (inclues Chile bank ATM fee)||$ 25.43||50,000||10/1/14||$ 11.67||599.778||599.778||0.00%||$5.00||n/a|
|Xoom||$ 95.00||55,198||9/26/14||$ 4.99||581.029||598.669||2.95%||$2.19||2.31%|
|amount sent||amount received||date||transfer fee||comission %|
|Paypal||$ 550.00||528||8/28/2014||$ 15.00||4.00%|
Here is the table in graph from. Click on the image to enlarge it.
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