Adventures of a foreigner in the south of Brazil.

Saturday, February 09, 2008

How not to bring money into Brazil

In two words: bank transfer. There is, on the international side, Moneybookers, which is a very reasonable option. On the other side there are Brazilian banks that engage in daylight robbery.

I recently tried a transfer of 400EUR to Brazil with Moneybookers. The exchange rate on the stock exchanges for EUR/BRL was 2,59 on the day of the deposit.

With a (big) Brazilian bank involved the calculation looks like this:

  • First you get cheated on the exchange rate: 2,49 instead of 2,59 (3,9% charge)
  • Second, there is a charge for an incoming international transfer of 105 BRL.
  • Third, there is yet another fee of 3,79 BRL for the currency exchange, on top of the exchange rate cheat.
  • Moneybookers fee 3,50 EUR. This is the only reasonable part of this affair.
In addition to that I have to physically sign and deposit a document confirming I'm not up to anything illegal with the dosh.

That means from EUR 400 I end up with BRL 887,89, which is an effective exchange rate of 2,22 or a 15,6% charge on the Brazilian side alone.

If, conversely, I pull the money out of an ATM I get the market rate plus a 1,5% charge on the European side (a tad more than Moneybookers), saving roughly 14% on the transfer. Given that document I have to bring to the bank after a transfer there is not even more legwork for getting the money into the account.

So ATMs it is from now on, and I have to say that for a genuinely modern banking system like the Brazilian one this kind of barriers for international operations is stick-in-the-mud, backwards and ridiculous.