Are you running an international business? Or maybe you frequently buy stuff online from abroad? Nowadays, in the age of globalization, we constantly connect with people around the world. However, the regular bank offers for overseas payments aren’t that attractive. So here are 3 simple things that can help you cut the transaction fees by 50%!
1. Use online remittance platforms
At the moment, there is a very well-developed market for online international transactions. Such competition drives the transaction fees down, as each company tries to provide the cheapest services.
It’s already a fact that it’s cheaper to send money online. Even banks add extra charges for handling transfers in their branches instead of online banking platforms.
There are few big and well-established platforms that you’ve probably already heard of. If you have ever ordered something online, PayPal is probably one of the most popular choices at the checkout gate. For smaller payments, Venmo has become the leading mobile app for the young generation. There are also sites like TransferWise or WorldRemit, which specialize in currency exchange and international money transfers.
To take a brief look at transfer costs, most of the mainstream banks charge on average $15 for overseas transactions. In some cases, there are even fees just to receive a payment from another country. Sending and exchanging USD to EUR through PayPal would cost $4.99. Same transfer using TransferWise only $1.71. And these are only random two examples. There are thousands of different companies available on the remittance market.
2. Compare transfer rates
As you can see, the costs and the features vary significantly from platform to platform. You need to decide if you want to send money quickly, or do you want to get the best exchange rates on your overseas transaction. Maybe security is your top priority and you want to use only the most trusted and transparent companies?
Looking through thousands of offers manually could be a pretty tedious task. Fortunately, there are sites, which specialize in researching and gathering the most important information about various remittance companies. For example, Wirly.com creates an open ranking with brief summaries of costs, exchange rates, transaction times and customer experience. There is also a widget, where you can put in your transfer information and the site will display how much your transfer costs on various money transfer platforms.
It’s also essential to read some customer reviews online before signing up for any platform. That way you can learn what are the real disadvantages or common problems that people experience. A quick Google search should do the trick. There is also a popular reviewing platform called TrustPilot, where users rate their experience with a particular company.
3. Watch out for exchange rates
The aforementioned information website covers in their reviews potential hidden fees or tricky charges that can make a cheap transfer go expensive very quickly. For example, one of the most popular ways to make users pay more is to put a high markup on the exchange rate. When we are making international payments, it’s obvious that we will need to convert one currency into the other and we don’t pay much attention at what rates they are exchanged. Some platforms offer “cheap” transfers, where you don’t need to pay any significant transfer fees, yet the exchange rates are so unfavorable that your recipient gets only a fraction of the amount you tried to send him.
These are the 3 most important things to have in mind when changing from the expensive international bank wires to quick online payments. However, keep in mind that in most cases you still need a bank account to power such transfer. The thing is that these online platforms allow you to send a regular free quick domestic payment to them, as they have set up networks in countries all over the world. Then, they are able to move it abroad much cheaper than direct international bank transfer would do.