Here’s why the banks get away with overcharging for forex

The forex market is worth upwards of R15 billion a year to the major banks in SA. That figure is now a few years old and is likely much higher today.

AAA-rated companies get excellent rates from the banks because they have the negotiating power, but there are only a few thousand of these companies in SA. Below that, among individuals and small- to medium-sized businesses, the banks are making a killing.

“The reason is simple: individuals and smaller businesses do not have the negotiating muscle of the larger companies, and the reality is that most smaller players are paying 2% to 3% to the banks on every cross-border transaction,” says Harry Scherzer, CEO of Future Forex and a qualified actuary.

“It’s a pernicious system that the banks have been getting away with for far too long.”

This is where Future Forex is starting to make waves and challenging one of the banks’ most treasured markets. It is slashing forex fees by up to 50% for individuals and up to 30% for companies.

Scherzer pulls out a few sample rates from the banks and explains how they work. “Most of their costs are hidden where you can’t see them, right here in the buy-sell spread.”

One bank is charging what is known as a mid-market rate of R17.49 to the US dollar (USD). What’s important to focus on, says Scherzer, is the buy rate of R17.27 and the sell rate of R17.71. That’s a difference of 43c in the USD. The bank will buy from you at the lower rate and sell to you at the higher rate. You can be both a buyer and a seller to the same bank, each time handing over 2% to 3% of every transaction entering or leaving the country. In other words, the bank is making 43c off you for simply converting rands to dollars or vice versa.

“Most of the banks’ costs are buried in hidden spreads. This spread fee is quite apart from the more visible charges, such as SWIFT, commissions or admin fees,” adds Scherzer.

Future Forex has a hidden fees calculator that is well worth visiting if you plan on sending or receiving money from overseas.

For example, if you are purchasing R500 000 worth of USD and the rate quoted by the bank is the upper rate shown above (R17.71), the calculator shows you are paying R5 422 in hidden fees, and that excludes SWIFT (typically R300 to R1 000) and other admin fees.

“It’s easy to see how these costs can quickly add up and, frankly, there’s no more work involved in sending R5 000 or R500 000 since these payments are almost entirely electronic,” says Scherzer.

“We decided it was time to bring some sanity back to the market and charge a single, low and transparent fee.”

Scherzer warns that playing around with the calculator can be infuriating as customers quickly realise how much they have been overcharged over the years. “We’d rather they find out now than continue paying exorbitant fees into the future.”

It’s the service that counts

Apart from drastically reduced forex fees, Future Forex was set up to provide the kind of service that the banks promise but seldom deliver. It’s a level of service that, until now, has been unknown in the industry.

Unlike banks, which often rely on chatbots or understaffed call centres, Future Forex assigns each client a dedicated account manager – available via WhatsApp, phone, or email.

These experts provide guidance, track transactions, and address any queries or hurdles, delivering a white-glove service typically reserved for private banking or large corporates. For those who would rather do it themselves, the Future Forex platform offers live exchange rates, real-time payment tracking, and easy document uploads through a user-friendly mobile app or desktop interface.

No more regulatory hassles

Cross-border payments come with regulatory complexities. Future Forex simplifies the process by handling all paperwork, including advanced payment notification (APN) and approval of international transfer (AIT) applications at no additional cost, ensuring compliance with the South African Reserve Bank and South African Revenue Service.

Award-winning

This new approach to forex earned Future Forex the ‘Company of the Year’ award at the 2025 Africa Career Summit, as well as numerous accolades in 2024.

The company never stops developing, says Scherzer. “We are constantly innovating, seeking ways to further reduce costs and service to our clients, and that will never stop.”

Follow this link to contact a Future Forex expert or request a quote for your transaction. You can also give them a call on 021 518 0558.

Brought to you by Future Forex.

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