This is the deal, I'm an American living abroad, I have a bank account in my host country, I understand how the exchange market works that the bid and sell prices are different. Let's say I request payment from upwork for the amount of 100.99 $ .99 cents is the fee and 100$ is supposed to go to my bank. When I receive the notification from my bank it shows that only 95 $ were transferred. It looks like upwork handles the exchange rate way bellow market price. My request is please let my bank handle the exchange rate, else it looks like upwork's third party banks are stealing, cause after all the deposit is made in dollars, not pesos.
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Upwork does not set exchange rates, the banks do. Banks do not exchange currency for free. When you withdraw $ 100, $ 99 of that goes to the bank to be processed. Whatever happens after that is out of Upwork's control and is down to the sending and intermediary banking partners.
Contact some American banks and ask for the cost of sending $ 100 from an account there to a bank account in your country. You'll be really happy to receive $ 95 worth after you did that.
Ok here is proof of concept, according to https://www.investing.com/currencies/usd-cop the current BID fro USD/COP is 3,088.08. However; according to upwork as of today the exchange rate is 2934.3150 COP/USD., that's way bellow market prices. I also don't understand why upwork's signature looks like I'm trying to sell pesos in exchange of dollars. It should be USD/COP not COP/USD.
Bank of America charges between $ 35 and $ 45 Dollars to transfer money abroad, plus the exchange rate costs.
You are looking at FOREX rates, not retail rates. NOT the same thing at all, and again, either way it is the banks that earn money on currency exchange rates, not Upwork.
Petra with all due respect, I'm not asking how much other banks charge. I'm actually offended by your answers, you are pretty much telling me that I don't need to inquire and Just stay quite and be happy. I just want to know from where these exchange rates are coming from, and if there are other fees that I should be aware of?
@Oscar Q wrote:
the current BID fro USD/COP is 3,088.08.
You need to get a banking license and to create a bank if you want those rates. If you are Upwork, or Oscar, or me, you will need to go through a bank to change currencies on your behalf.
And banks take a cut for this. That's why you never get those rates.
It looks like only Upwork has these banks with huge fees. I withdrew money from another freelance website and they charged me only $3.5 for transferring $480 while Upwork ....you know how extravagantly they charge.
Sorry but it's absurd to think banks taking 3% spreads on forex transactions is "normal".
Any decent banking relationship would get those spreads down meaningfully as the true market spreads are fractions of a percent.
i have had similar problems paying a consultant in a India, the exchange rate is charged a 3% fee, which works to a 6% effective spread. Western Union or Moneygram with local exchange rates would be much cheaper than Upwork's supposed "bank charges".
Essentially these are additional fees that I think are undisclosed in the contracts. I would be shocked if some percentage wasn't being taken by Upwork.