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Skrill Charges - High for non EU / UK merchants
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Skrill Charges - High for non EU / UK merchants

randvegetarandvegeta Member, Host Rep

TLDR; It cost between 10 and 13% to use Skrill for non EU/UK merchants.

Long version;

So Skrill is pretty much available to anyone around the world, but the charges for non EUR/GBP accounts seem to be exorbitantly high.

Unlike with Paypal, Skrill does not appear to support multiple currencies, so your balance in your account is held as your 'preferred' currency. In our case, that would be HKD.

Let's assume you as a provider support multiple currencies, and you're using spot rates for the exchange. We're based in HK so our base currency is HKD, but the majority of our clients pay in USD.

Assume you have a service that cost HK$10,000 (US$1,274). Skrill uses this $1,274 fine, so client pays exactly what is advertised at the perfect exchange rate.

Skrill advertise an exchange fee of 2.99%, yet the actual rates used are much closer to 3.4% just on exchange. So that HK$10,000 becomes $9,660.

The transaction fee is apparently another 3.9% (ish), bringing the total now to HK$9,284 (rounded up here).

Now you want to withdraw your funds to your bank account. Despite being able to withdraw to an HK account, they will only process this in EUR, which apparently cost another 2.99%. However, they seem to settle in HKD, resulting in mandatory double conversion. EUR settlement is not possible. So if you want to withdraw to an HK account, you lose another 5.98%, which brings the total to HK$8,726.96.

Alright, no big deal, we have a UK account and EUR account in the UK and EU that we could use. So lets try that?

HK$9,284 should be about £925.85 spot rate, so around £898.15 after exchange fees. Unfortunately, the real rate used still appears to be around 3.4%, so what you really get is £894.37.

A spot rate conversion to HKD and that £894.37 = HK$8,967.62. So starting from $10,000, you end up with $8,967.62 (if you have an EU/UK bank account), or $8,726.96, meaning a total charge of 10.3 - 12.7% in total 'round trip' charges, all of which incurred at Skrill.

Even under the best of circumstances, where the initial payment is made in HKD, where you can save that initial 3.4% on the first exchange, you're still talking around 7-10%, making this one of the most expensive payments gateways around.

Of course if you're EU / UK based, and can process entirely in EUR / GBP, then the fees are pretty much just 4ish %, which is not much more than the likes of Paypal. But we process a fair amount through Skrill, and it seems that a very substantial portion of the profit margin is eaten just in fees.

Comments

  • pikepike Veteran

    Seems they don't want you to exchange money with them. Can't u use the euros or usd to buy hardware or other stuff?

  • randvegetarandvegeta Member, Host Rep

    pike said: Seems they don't want you to exchange money with them. Can't u use the euros or usd to buy hardware or other stuff?

    The funds in the Skrill account are held as HKD. So the exchange is mandatory. There is no way to change the currency to EUR or GBP either. The only option is to close the account and open a new one.

  • Have you checked out their VIP Programme? It does require a minimum overturn of at least €6000 per quarter but can get you lower FX fees + multi-currency wallets. If you are beyond their "Diamond" level (€90,000/quarter) they will do exchange at-cost (wholesale)

  • ClouviderClouvider Member, Patron Provider

    They still exist ?

    Thanked by 2MikeA LowVM
  • randvegetarandvegeta Member, Host Rep
    edited August 2018

    Clouvider said: They still exist ?

    Apparently yes. Chumps like me keep them going. They make more than we do per transaction :O.

    Tucker said: Have you checked out their VIP Programme?

    Nope.

    Tucker said: It does require a minimum overturn of at least €6000 per quarter but can get you lower FX fees + multi-currency wallets.

    Easily do more than 6k / quarter. I wonder what the rates are like though.

    Tucker said: If you are beyond their "Diamond" level (€90,000/quarter) they will do exchange at-cost (wholesale)

    I would never want to shift that much processing to Skrill. 90K /quarter is pretty significant.

  • I've been pretty happy with Skrill until last month, when they started charging a 2.50% fee on uploading funds by EU SEPA bank transfer. Technically this is in their TOS since January 2018, but they only started enforcing it this July.

    Considering how much a SEPA bank transfer cost with other banks, there's just no reason to use Skrill anymore. I'll empty my account there, Revolut looks like a decent alternative from what I've seen.

  • Have not used Skrill before, but still sad to know it is so expensive. It just helps PayPal getting more popular, which I do not want to see.

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