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A look at the exchange rates: Oya versus other major money transfer operators

26th October 2020

Sending money to Nigeria can be stressful. You have to check the exchange rates from different providers in order to figure out if they are giving you a good deal or charging you hidden fees in their exchange rates (also known as ‘exchange rate margin’ or ‘mark-up’). This is easier said than done as most money transfer operators regularly change the amount of exchange rate margin that they add to their rates depending on the day and even time you send money. Then you have to check the transfer fees that you are going to pay which can change depending on the amount you are sending and with some providers can also change depending on the day you want to send money. Not very transparent, right?!

All this makes it difficult to know which provider to use and when. That’s why at Oya we make a special effort to be completely transparent about how much we charge our customers. We don’t add any exchange rate margin or hidden fees and offer our customers a clear, fixed transfer fee (£1.99) irrespective of how much or how often they transfer.

Last week we decided to see how Oya’s rates and fees compare to four other major money transfer operators – WorldRemit, Transferwise, MoneyGram and Western Union – at different times picked at random by our team during each day. You can see the date when the analysis was done in the table further below. To make for a fair comparison, all rates and fees were taken at exactly the same time for Oya and the other four money transfer operators (you can also see the time in the table). The analysis was done based on a transfer amount of £500 into Naira.

 What does the analysis show?

In each instance, Oya had a better rate compared to WorldRemit, MoneyGram and Western Union and a virtually identical rate compared to Transferwise (both Oya and Transferwise don’t mark-up their rates). Transferwise charged a transfer fee of £4.49 compared to Oya’s £1.99 for sending the £500.

You can see our detailed analysis in the table below.

Pound to Naira Exchange rate comparison

Exchange Rate and Transfer Fee Analysis: 19th to 23rd October

Note: Transferwise deducts the transfer fee from the send amount before sending the rest whereas the other money transfer operators including Oya add this on top of the send amount.

The column called ‘% Diff Vs. Oya Rate’ shows the exchange rate margin which the money transfer operators have added to their exchange rate. For many people, exchange rate margins are harder to understand and so people continue to pay these when making their transfers. Notice how these also differ depending on the date and time of the transfer, making it harder still to understand exactly how much exchange rate margin you are paying.

Now let’s take our analysis a step further and see what happens when we calculate the ‘effective exchange rate’ for Oya and the four other providers. The effective exchange rate incorporates the transfer fees within the rate and is useful as it can show you which provider is giving you the best deal overall when you also consider the transfer fee.

The formula to calculate the effective exchange rate is as follows:

  • ‘NGN received when sending £500’ divided by ‘Total payment (GBP)’ (which includes the send amount and transfer fee)

When we take the fee into account, Oya was the clear winner offering the best overall ‘effective’ rate compared to the four other money transfer operators.

Assuming that you had sent £500 per day last week (at the exact time as our analysis) and considering the effective exchange rate at the time (i.e. including the fee you would have paid for the transfer), using Oya you would have got an additional:

  • NGN 11,245.98 compared to WorldRemit
  • NGN 6,266.52 compared to Transferwise
  • NGN 8,389.00 compared to MoneyGram
  • NGN 11,310.90 compared to Western Union

Imagine what this amount could be over a longer period of time like a month, a year or over several years sending money to Nigeria.

Effective Exchange Rates Analysis: 19th to 23rd October

Effective Pound Naira exchange rates
Effective Pound Naira exchange rates

What can I do?

Don’t pay over the odds when sending money to Nigeria. Make sure your money transfer operator isn’t adding an exchange rate margin hidden in their exchange rate. Check the rate you are getting from other money transfer operators against the rate from Oya on or in the Oya app (the Oya rate is always without a mark-up). Furthermore, don’t forget about the transfer fee. Over time it all adds up and that’s money that is going into the pockets of the money transfer operators rather than reaching the friends and family for which the money was inte