While domestic transfers are usually free of charge, handling any international payments can become quite expensive very quickly, especially if you make them regularly. Nowadays, you can order a jacket you’ve just found online even if the seller is thousands of miles away from you in another country.
If one could lower the transfer fees and currency exchange rates, there is a huge sum of money to save. Read these 5 simple tips to help you save money on overseas transactions.
1. Choose online alternatives
If you are used to making payments only via your bank, then it might be time to research some online alternatives and independent remittance platforms. An international bank wire generates high fees. A simple transfer can cost as much as $30. There are also banks that charge you to receive a payment from another country.
There is a well-developed online remittance market, with some well-established and secure companies which have been dealing with international transfers for many years. You’ve probably heard or even used PayPal, which is one of the most popular platforms for online stores.
2. Research the available competition
Online remittance market is a very competitive one and there are literally hundreds of companies and platforms who offer a variety of money transfer services. Each of them has its own characteristics, fees and features.
It’s best to read some reviews and research the fees structures, before choosing which platform you want to use. There are platforms such as Wirly or Monito, which gather information about remittance companies. You can read customer reviews on sites like TrustPilot or ConsumerAffairs to learn about first-hand experiences.
What are the most popular money transfer companies?
PayPal has become the main choice for merchants, as it provides a variety of tools to help handle the deals.
Transferwise can be a good option if you make frequent payments when abroad, as they let you store multiple foreign currencies on one account and you can order a card connected to it.
TransferGo is a popular money transfer platform, which focuses on providing cheap worldwide transfers. Read this TransferGo in-depth review to learn more about their features and fees.
There are also companies such as Skrill or WorldRemit.
3. Try locally-oriented services
When researching remittance services you can try to use companies, which specialize in transferring money in certain regions. For example, there is Remit2India, which as the name indicates focuses on transferring money to India. They do it cheaper than the competition. However, if you want to send money to another country, their offer is rather poor.
4. Be careful with exchange rates
Some companies put a hidden margin on the currency conversion rates, which means the exchange rates aren’t the ones you can find on Google. For example, instead of exchanging 1USD to 0.77GBP they will give you only 0.65GBP. In that case, even if the transfer itself is very cheap, the sole conversion can be a significant expense. If you sent $1000 your recipient would get 650GBP instead of 770GBP. Therefore, double-check the rates before sending the money.
5. Try different currency pairs and transfer methods
Some currency pairs have better support than others. For example, it may be easier and faster to send EUR to the European country than USD transfer. Therefore, it may be sensible to exchange the currency on your own and save time and money on the fees. Most of the remittance platforms have live fee calculators, which can help you estimate the costs of sending the transfer with different methods. Play with it for a few minutes to see if there are maybe some easy ways to lower the overall cost. For example, in most cases, it is cheaper to pay for the transfer with a regular domestic wire rather than a credit card.