March 05, 2020
How to avoid costly mistakes when sending money abroad
When it comes to international currency transfers, it pays to have your wits about you. A large number of FX providers are not always forthcoming about their charges, and this lack of transparency can make it hard to know whether you’re getting the best deal or not. The good news is that with a bit of due diligence and the right partner, you can avoid these pitfalls and get the best value from your international money transfers.
Tip 1: Don’t rely on your bank
If you need to make a payment or send money overseas, it might be tempting to go to the bank and do it there. After all, they have the structures in place, and it will probably be cheaper and faster. But this isn’t the case at all. In fact, banks hardly ever offer the most competitive rates, and their service levels are unlikely to be particularly high or customised to your needs.
Tip 2: Don’t fall for promises of 0% commission or no fees
A lot of providers hook customers with promises of zero fees or no commission. And while this may be true on the surface, it just means they need to make their money elsewhere. This often takes the form of hidden fees where some FX companies add their own mark-up on top of the mid-market rate. Finding just how high their mark-up is may take some investigation but will likely save you from excessive hidden fees if you make the effort.
Tip 3: Watch out for fee spikes
Providers are free to change their fee structure without alerting you first. Sometimes charges can spike for just a few weeks then go back to normal. In some cases you won’t even notice, unless you are very diligent and take the time to track fee changes over the long term. Fee spikes are completely up to the provider’s discretion, and you’ll see disclaimers in the fine print tucked away on their website and other communications.
Tip 4: Be aware of mark-ups changing with the amount you send
Exchange rate mark-ups can change with the amount you’re sending. This can happen at any time, and if you don’t check regularly, it could come as a nasty surprise. For instance, you might be used to sending a certain amount for a certain fee. Then without warning, the fee structure changes, and a mark-up has been added to that amount. The solution would then be to adjust the amount you send to avoid the new mark-up based on the latest fee structure.
Tip 5: Compare prices for currency exchange going in both directions
You’d be forgiven for thinking that sending money to and from the same two destinations would cost the same. But that’s not always true. Whatever the case, be sure to double check the prices going both ways before choosing your money transfer route.
Tip 6: Don’t just focus on prices
While pricing is perhaps the biggest factor when deciding which FX provider to use, it’s by no means the only one. Other important aspects such as ease of use, speed of transfer, reliability and level of personal service are well worth considering too. Sending large amounts of money can be a daunting prospect, and you want to choose a provider that understands and caters to your challenges and individual needs.
At Currency Partners we’ll help you save money with preferential pricing and expert advice for all your international money transfer needs. Contact us for an online no-obligation business registration.