Mercury/32 - Telegraphic Transfer Fees

For many customers, especially those in Europe, making payments to international suppliers can be a difficult or frustrating experience. Banking arrangements in the USA and South Pacific nations make payment by cheque easy and inexpensive, but this does not appear to be the case in many European countries.

Many of our European customers have told us that the easiest way for them to pay us is by Telegraphic Transfer, where their bank transfers the funds to us electronically using transfer agents such as SWIFT or IBAN. Unfortunately, our experiences with Telegraphic Transfers have been uniformly unsatisfactory, sometimes verging on the grotesque.

The problem with Telegraphic Transfers mainly comes down to who pays the fees for the transfer. It appears that most European banks assume by default that they should deduct their fees from the amount remitted: if we were only talking about a Euro or two, then that would be bearable, but many banks charge as much as €20 to send a telegraphic transfer, an amount that we simply cannot absorb.

What is worse is that not only does the originating bank deduct their fee from the amount transferred, but any bank involved in the transfer typically also deducts a fee. Most banks do not hold accounts with every bank in the world, so it is quite common for as many as three banks to be involved in the actual transfer of funds - the customer's bank, an intermediary bank, then my bank. On one infamous occasion, a customer in Germany transferred the equivalent of US$135 to me by Telegraphic Transfer, but the amount that arrived here after bank fees was only the equivalent of US$68 - nearly half the remitted amount had been eaten up in bank fees. I'm sure it's clear to everyone that we simply cannot accept that kind of deduction from the invoiced amount.

We want to support our European customers who prefer to pay by Telegraphic Transfer, so we will still accept payment by this method. But to simplify the process, we have to charge a uniform fee of US$30 on any Telegraphic Transfer made to us: we have chosen this amount because ten years' experience has shown that it is approximately the average amount lost in transit over all the TTs we receive. Provided you have paid the uniform fee, our undertaking to you is that we guarantee we will accept your payment no matter how much is deducted from it by banks in transit.

We apologize for any inconvenience this requirement may cause, but the issue is unfortunately well outside our control.