Why is direct money transfer to other people accounts so expensive?
In order to send a wire transfer, the money backing it must be available at the sending bank's account at their respective national central banks. That would be a branch of the US Federal Reserve for US Dollars, and a branch of the European Central Bank for Euros. In essence, a wire transfer is an immediate adjustment on the books of the central bank. SWIFT is a "messaging system" over which banks communicate what adjustments to make but does not actually move money. Banks must have a positive balance by the end of the day, or else they must borrow cash at relatively high interest rates. In contrast, credit cards, ACH/SEPA payments, debit networks, etc. have a minimum 24 hour clearing cycle, thus the bank has at least a day to come up with the money, e.g. by selling investments or holding on to more cash from a previous day. The US Federal Reserve is paying 0.10% interest, which is tiny versus other investments. Worse, the European Central Bank's deposit interest rate is currently -0.50%. They charge banks 1/2 percent to keep that money around. In the US, there is a significant opportunity cost to having that cash immediately available, in the Eurozone, there is an actual cash cost. In both cases, the costs are charged back to the customers who use telegraphic transfers as expensive fees.