Sending money abroad from Prague: where the costs really hide

Sending 500 euros to your parents should be simple. Then you look at three apps and get three different answers for what lands on the other end. Nobody is lying; they are just showing you different parts of the price. Here is how to see the whole of it.

The three places money leaks

The fee. The line most people look at. It may be a flat charge, a percentage, or free.

The exchange rate. If you send crowns to an account in another currency, someone converts them. The rate you are offered often includes a margin above the wholesale rate. A "zero fee" transfer with a poor rate can cost more than a flat fee with a good one. The wholesale reference is sometimes called the mid-market rate, and you can compare against it.

Intermediary charges. On international transfers outside the SEPA area, correspondent banks along the route may deduct their own charges. The recipient can end up with less than you intended.

The most honest comparison is simple: for the same amount and the same speed, how much arrives in the recipient's currency?

Inside the EU: SEPA

If you are sending euros to an account in the SEPA area, the system is built for this. SEPA transfers are standardised, use an IBAN, and are generally quick and cheap. Czechia is in the EU but not the euro area, and EU rules on cross-border payments in euro limit what banks may charge compared with domestic transfers, though details vary by bank, so check your tariff.

Many banks also offer instant euro payments. Check whether your bank supports them, any limits and whether the receiving bank does too.

If your payment is in crowns to a Czech account, the domestic system applies, which is fast and normally free or low-cost. See Czech QR payments explained for how everyday local transfers work.

Beyond Europe: SWIFT and friends

For transfers to countries outside the SEPA area, banks use the SWIFT network, and you will need the recipient's account number, bank name and BIC (the bank's identifier code). Charges can be assigned in three ways, usually shown as OUR, SHA and BEN: the sender pays all charges, the charges are shared, or the recipient pays. Pick carefully; if the recipient must receive an exact amount, "OUR" is the option designed for that, but your bank may charge more for it.

Speed ranges from the same day to several working days, depending on the route, banking hours and checks.

Doing a fair comparison

Be careful with cash exchange

Currency exchange booths in the centre of Prague have a long history of poor rates and hidden commissions. Signs advertising a high rate may be for a tiny amount, with a different rate or a large commission for the rest. Our piece on tourist traps and scams in Prague goes through the common tricks. Use a bank or a regulated provider (our guide to digital banking in Prague compares the options), or take cash from a bank machine in the local currency and decline the offer to be charged in your home currency.

Taxes and limits

Sending your own money to your own family is normally not a tax event for you, but large or regular transfers can trigger questions from your bank under anti-money-laundering rules. Be ready to explain the purpose, and keep evidence such as a payslip, a sale contract or a loan agreement. Questions about whether a transfer is taxable in the recipient's country are for an accountant; see our guide to finding a tax adviser.

Scams to know about

Never send money to someone you only know online, or because a "bank" or "official" called and said to move funds to a safe account. Be careful with last-minute changes to payment details in an email from a landlord, supplier or solicitor; ring them on a known number first.

Common mistakes

Looking at the fee and ignoring the rate. Choosing "pay in home currency" at a cash machine. Entering the wrong IBAN digit. Sending a first big transfer on a Friday afternoon and hitting a compliance check. Not telling the bank why you are sending a large amount.

Regular payments and large sums

If you send money every month, a standing order or a scheduled transfer in your banking app saves time and avoids missed payments. For larger sums, banks and providers may ask where the money comes from and what it is for, so keep documents such as a payslip, a sale contract or a loan agreement at hand. This is routine, and being prepared makes it quicker.

Receiving money from abroad

The reverse also works. People abroad can send you money to your Czech IBAN, and your bank will show the incoming amount and the sender. If the payment arrives in a foreign currency, your bank converts it at its own rate unless you hold a foreign-currency account, so compare that rate too. Give the sender your full IBAN and your name exactly as it appears on the account.

Frequently asked questions

What is the cheapest way to send money abroad?

It depends on the amount, currency and route. SEPA euro transfers are usually cheap; for others, compare the amount received.

What is the mid-market rate?

The wholesale rate between two currencies. It is a useful benchmark for judging a provider's margin.

Why did less arrive than I sent?

Fees, exchange margin or intermediary bank charges may have been deducted, depending on the route and the charge option.

Can I complain about a bank or provider?

Start with the provider's complaints process, then the Financial Arbitrator of the Czech Republic for disputes with Czech financial institutions.

Today: get three quotes for the same transfer and note the amount received in each, then pick on that number alone.