International money transfer is something that millions of people do around the world every day. From the global company paying international bills in Dubai, to the family looking to buy a house in Spain, to the migrant worker sending money to loved ones, transferring funds is a common task for most people.
But this same task can also be daunting and, if not done intelligently, can be costly. Most people are not aware of the hidden fees that come with international transfers. When you use a bank, foreign exchange broker, or money transfer company to send money abroad, there are generally two costs involved. the most obvious is the cost of the service to transfer your funds and then there is the not so obvious cost of converting your money from one currency to another.
These service providers never convert your money based on the interbank exchange rate and make a profit by exchanging your currency at a lower rate. the profit they make on the difference is generally known as ‘Spread’. This is a common practice and a vital revenue stream for vendors. Be careful, though, because they aren’t always that upfront with this cost, and frankly, you could be incurring high costs without even knowing it. Below is a list of ways you can make a secure international money transfer.
Banks are the most common way to send money
They are large regulated financial institutions and are efficient in transferring large funds due to their apparent security. Banks are used by large corporations, small businesses, and even individuals for international transfers every day, and they remain the most common method of transferring money. However, banks are increasingly coming under scrutiny for their hidden transfer fees and there are cheaper methods of doing this, especially if the amount you are sending is not extremely large. Banks typically charge people between £20 and £50 per transfer and the costs generally increase as the amount of the transfer increases. To transfer money through a bank, simply visit a local branch and ask a customer service advisor. Advise to do your homework first! Not all banks charge the same amount.
forex brokers
Forex brokers act as intermediaries between the client and the banks, usually having relationships with a list of banks and trying to offer the most competitive rates to exchange one currency for another. They mainly deal with foreign exchange, but can transfer funds for a fee. However, it can take several days to open an account and the process is quite slow. Foreign exchange services are beneficial when purchasing property abroad or for small businesses making international payments. When making international transfers above this amount, they offer competitive exchange rates above $5,000 and generally do not charge for transfer services above this amount.
money transfer providers
Although money transfer providers have the same dual costs as banks and foreign exchange companies, they are much cheaper when making international transfers for amounts less than $5,000.
They typically use bank-to-bank transfers, although some offer additional receiving methods, including cash pickup locations. Providers like these have been around for a long time.
Online money transfer providers
but thanks to Internet online money transfer providers that allow users to make international transfers at almost zero cost and still manage to make a profit.
They have different ways of doing this. Some providers have a mid-market rate that they use to reduce costs for users. Others match those who want to exchange the same sets of currency, which also helps limit costs related to currency conversion. On top of this, transfer fees are as little as $1 and some don’t charge the fee at all.
Finally, they are usually regulated by the financial authorities of their country of origin and have secure methods of sending and receiving using the latest in financial technology. Some take two to three days to receive funds, but the number of providers promising same-day transfers is increasing. Lastly, sending money online has revolutionized the money transfer market as customers find the sending process via computer or mobile phone to be easy and quick compared to the hassle of visiting a local branch.
Compare the money transfer market before you send money
Due to the Internet, the number of providers is increasing every year and providers are competing to attract customers. When you Google about international money transfers today or anything to do with sending money, the search engine brings you millions of pages listing provider after provider that promise the same, low cost transfer of funds.
But as seen in this article, not all providers are the same and it is better to shop around. Not all providers ship to all countries, have same-day transfer policies, and obviously don’t offer the same price for a particular transfer.
So comparing the money transfer market is a smart thing to do and luckily these days comparison has come to this market. Money transfer comparison sites offer you a list of providers and a list based on exchange costs and low transfer costs and provide more information on sending money. online.
But be careful, not all comparison sites are created equal and quotes are often approximate rather than exact. Of the few that currently exist, sendthatcash.com is the easiest to understand, giving users a quick way to compare between many companies offering different rates. It is completely free to use and goes straight to the point. They have an informative results page and review all the companies they list to make sure they are safe.