How the money transfer industry uses UX dark patterns to hide fees

A case study of the international money transfer market

I recently took on the challenge of understanding why 96% of Americans that send money internationally are unhappy with their money transfer provider and 80% say they feel ripped off by their provider. That leaves 4% happy. Babies on a plane give higher satisfaction ratings.

I work for a personal finance comparison website that includes comparing cross-border payment services. We aim to help make decisions easier and more satisfying. I had to get to the bottom of this.

Because people need to get their funds where they need to go, their frustrations do not stop them from using these services. The U.S. money transfer market is an estimated $141 billion industry annually. That’s more than half of what was borrowed for mortgages ($231 billion) and more than student loans and credit card debt combined ($124 billion) last year, according to a analysis of the Federal Reserve Bank of New York, Center for Microeconomic Data.

Turns out this dissatisfaction with such a massive industry could be related to user experience. And not because it is done poorly, but because it works too well.

We often call this a “dark pattern”. The term was coined by user experience designer Harry Brignull to describe interfaces that intentionally use human psychology against our own interests. That’s a recipe that could certainly lead people to feeling “ripped off”.

What led us to suspect user experience was the culprit?

To better understand the frustrations and mindsets of money transfer senders, we identified five areas of importance to those sending money across borders:

  1. User experience
  2. Rates
  3. Transfer speed
  4. Convenience — including number of features, transfer options and countries
  5. Trust and credibility

With a detailed methodology, we assessed these factors by conducting usability testing with, sending live transfers, generating 2,430 quotes, and verifying over 585 data points collected from provider websites.

As we performed our research, the anxiety of choosing the right provider became apparent due to the overwhelming choices and the pressure of wanting as much of your money to arrive on time. We needed to recognize what providers were doing well to cut through the noise.

We awarded those that rose to the top with the first Money Transfer Awards. The five consumer considerations ended up being the basis for our award categories: Best User Experience, Best Transfer Rates, Best Transfer Speed, Most Convenient, and Outstanding Product (presented to providers who perform well overall). From the data collected, we tallied a score for each category per provider to determine if they were a winner.

To give context to these scores, we calculated category averages. These were the results:


Surprisingly, we found that the money transfer industry performed best in user experience and worst in trust. We also found that the winners of Best User Experience and Most Trustworthy did not overlap. Why was this happening?

A legal “hidden fee” 

For the Money Transfer Awards, we measured trust according to reliability and credibility. I like to think of credibility much in the same way as you’d judge a person on their trustworthiness: How much do you have to question what an individual says and their intentions when they’re talking to you? That person may not technically be lying to you, but they may intentionally leave out information or direct your attention elsewhere so that you don’t notice something they don’t want you to see.

A big factor that determined our scoring for Most Trustworthy was a fee “hidden” in the given exchange rate that was often higher than the mid-market rate. This rate is the benchmark used by traders, sometimes referred to as the “dealing desk rate.” Anyone can find it at the top of their search results when they Google “US dollars to British pound,” or whatever exchange rate they desire. But most people don’t — even when prompted to comment on a provider’s commercial exchange rate, which was demonstrated in our user testing.

For example, usertester6482 is asked to initiate a transfer of US $500 to Mexico, an unfamiliar exchange for him. His reaction is to not do his research, but he instead summarizes the state of the average consumer, “I have no clue because I have nothing to compare.”

Hiding in plain sight


“Match between system and the real world” is one of Nielsen’s 10 heuristics, the Godfather of usability guidelines. This particular heuristic encourages user experience designers to implement language that is familiar to the user in order to ensure information appears natural and logical.

The user experience of many money transfer sites seem to manipulate this by using common language to imply something it does not.

“Exchange rate” is used to explain the conversion, which is misleading to those who do not know there is a difference between the mid-market rate and the commercial rate. The assumption then becomes the clearly advertised “exchange rate” is the mid-market rate.

Furthermore, there is another way providers turn a profit on a money transfer. They charge a “transfer fee” that’s either a flat charge or a percentage of the transfer amount. Today, the transfer fee is usually displayed clearly (although this was not always the case in the industry). This practice also aligns with the aforementioned Nielsen heuristic, since the average user usually identifies a fee with, well, the word “fee”.

Seems innocent, right? However, the clear denotation of this fee can provide an illusion of transparency. You may even see providers promoting transfers with “no fees”, which can be exciting to consumers.

To illustrate this, Cynthia8834 is clearly concerned about how far her dollar goes but doesn’t know to check the exchange rates when comparing money transfers, saying "Some places don't have fees, which I like, because you're already sending this much money.”

Sorry, Cynthia8834, all that glitter ain’t gold. Unfortunately, because many consumers believe the fees are clearly denoted, just like Cynthia8834, they don’t think to examine the exchange rates when shopping for money transfer services in addition to transfer fees.

The appearance of credibility versus reality


This inconsistency between what a provider site communicates and the actuality is reflected in the data collected from the awards. We ask our users to rate on a scale of 1 to 5, “How would you rate this service for credibility?” with 1 representing “not at all credible” and 5 representing “very credible”. These responses give us insight into how trustworthy a provider appears to the user.

To the skeptical, we recognize brand awareness and reputation goes into a user’s judgement of credibility (not just their user experience). However, our results reveal that user experience certainly matters when a little-known brand like Sharemoney scores the same as Paypal on this question. And the provider that with the lowest score, Small World Money Transfer, also scores lowest in “website attractiveness” and second to lowest in “ease of navigating site”.

In contrast, the total score for the Most Trustworthy award reflects how credible a provider actually is — not just how it looks to the consumer. To make these scores comparable we converted each into percentages and took the average. This is the result:


Another question posed to our users was “Is the information easy to understand?” with 1 being difficult and 5 being easy. The 26 point spread between the average ratings of this metric and the average Most Trustworthy category score further supports our “hiding in plain sight” theory. Users believe they comprehend without effort, but they actually don’t, leading to frustration.


Only TransferWise and Circle, which use the mid-market rates for its exchange rates, score worse in both of these user testing questions (“How would you rate this service for credibility?” and “Is information easy to understand?”) in comparison to their “Most Trustworthy” category score.” They are also both the winners of the Most Trustworthy award. TransferWise excels in both appearance and reality making the difference only 3% for both user testing questions. Their painstaking effort to explain the existence of a mid-market rate to consumers, as well as a detailed FAQ, pays off.

For Circle, the delta was much greater leading to a 17% difference for each usability question and “Most Trustworthy” score. Unfortunately, their use of the mid-market rate is not paired with a quality user experience.

On the opposite end of the spectrum sit Western Union and Paypal with the greatest spread between comparing “How would you rate this service for credibility?” and “Most Trustworthy”. Ria and Moneygram have the most significant discrepancy between “Is information easy to understand?” and “Most Trustworthy”. All are veterans in the money transfer game. Could it be that their experience has made them masters in dark pattern?

Why do people feel ripped off? Powerful user experience.

We conducted the Money Transfer Awards research to understand why Americans are unhappy with their money transfer providers and why the majority feel ripped off. To be “ripped off” implies being cheated of something, which means that certain expectations of fairness were not met. After making several money transfers, consumers may sense that their money does not go as far as it potentially could. Yet they often don’t understand why due to the gap between the perception (conveyed by the user experience) and how the costs are actually calculated. This confusion may heighten a feeling of being ripped off.

User tester anonymous44 sends money transfers regularly — a few transfers per month. His participation encapsulates this betrayal. He typically uses Western Union and gives Xoom a shot for our testing. When anonymous44 is asked about the exchange rates, this user hesitates before Googling the going rate for “USD to GBP”. He is surprised to learn that he gets 2 pence less per U.S. dollar in his exchange rate resulting in a 2.5% difference. Upon this realization, he demonstrates his distaste and shock by muttering three time, “I don’t like that at all,” before moving on to the next question.

Whether it sits with you ethically that the money transfer industry may be manipulating a better user experience to take more money from consumers without their knowledge, our results at least lend credence to the power of user experience. Naysayers dare not argue user experience just makes things “look pretty.” Remember, like Uncle Ben to Spider-Man: “With great power comes great responsibility.”

Note: User tester names have been changed to protect their identities.

About the Author

Olivia Chow

Olivia Chow is content marketing manager at personal finance comparison website She was the project lead for the Money Transfer Awards 2017 and is a self-confessed UX nerd