The issue of transferring money across borders is always on the headline. It may be remittances of overseas employees that is getting to news, being one of the most economic drivers of third world countries. It could be about currencies that constantly move, and it could be about speculating on the movements of these currencies, but either way – it’s clear that the public understands that the topic of money transfer abroad is monumental.
MoneyTransferComparison, a guide that covers this area extensively has created a thorough FAQ that can help customers understand what they are in fact paying upon conducting an international money transfer.
First and foremost, it helps clients understand EXACTLY how much they are paying for the transfer. Most banks make their utmost efforts to conceal that information leaving clients unaware of the large fees that are being levied by the bank as a part of the deal. Most clients are only aware of fixed fees that will cost you to transfer money abroad. This fee which is about $20 on average globally (in each country’s domestic currency) seem quite negligible. After all what’s a $20 fee on a transfer of thousands of dollars?
The fee that these clients are unaware of is the margin that the bank is taking for exchanging their domestic currency into FX. If today’s Euro to USD’s rate is 1.16, the rate a client would get is around 1.14 (depending on the bank, the client, the nature of the transaction, it’s size and more variables). This may seem very insignificant and easy to overlook but if you are transferring your salary worth $50,000 over the course of the year, these 1-3 percent markups add up to $1,700 (not including the fixed wire fees).
Understanding this concept is essential in order to choose the best provider for your needs, and also to get a sense of realization how greedy can banks be. Banks are already making insane amounts of cash from a variety of activities, but mostly lending out money in one form or another. Taking excessive fees on simple actions like international money transfers is just the icing on the cake for them. All these fees combined don’t even make up 0.1% of their overall revenues.
Other important things you could learn at the FAQ is how this industry operates behind the curtains. If you think that by leaving the bank and choosing any provider whatsoever you will be off to a good start, think again. Commercial money transfer companies are going to give you a lot of hard time as well. Yes, their margins will be narrower to begin with in most instances (and they won’t charge wire fees at all, at least the leading companies), but it doesn’t mean they are going to give you the best deal out there. The key to great deal is negotiating your terms and speaking to several companies at the same time, letting them race against each other. If you are moving substantial sums of money abroad you could save as much as 50% of the fees this way, but if you are moving anything under $10,000 you are not going to get amazing offers and better off working with all-online money transfer websites.
Which other things should you know about money transfers?
Choosing a commercial money transfer provider for the purpose of speeding up the process won’t work. They, at the end of the day, use banks to transact that money between their different corporate accounts.
Choosing a commercial money transfer company will not be any easier than with banks in terms of anti-money laundering or regulations. These companies operate with the exact same Know Your Customers guidelines that banks do.
Choosing a commercial money transfer firm can indeed help you if you are looking for solid guidance that you aren’t getting with the bank. As long as you need to transfer $10,000 or equivalent many of these companies will appoint you a personal representative that will know you as a customer, whether you are a private client or representing a business.