International money transfer has become common in today's globalised
environment. However, because of the hefty costs and hidden charges, the
procedure can be intimidating and frustrating. Many consumers overpay because
they are unaware of the other payment choices accessible to them.
Are you also concerned about being overcharged while sending money
abroad? If so, you are in luck! This blog reveals the hidden fees associated
with international money
transfers. Get ready to learn vital information to avoid being caught off guard
when sending money overseas.
4 Ways to Prevent Hidden International Money Transfer Charges
Did you know that many banks and money transfer companies don't give you
the mid-market exchange rate, which you can easily find on Google? Instead,
they add a hidden markup to the pricing without telling you. Sneaky, right? But
don't worry. All you need to do is keep these 4 tips in mind to prevent them
from sneaking up on you.
- Conduct Exchange
to most bank and transfer service websites, their exchange rate is the sum
of the benchmark rate plus a margin. This is a hazy method of alerting you
that you are not using the valid, actual currency exchange rate.
Financial companies might charge exorbitant fees for currency conversions
without openly alerting customers. This is frequently substantially in
excess of 5% of the value of the transfer. To prevent this outlay, you
must check for the official mid-market exchange rate.
Before proceeding with the transaction, compare it to the quoted rate
provided by the transfer service. The difference between the two amounts
tends to be the extra fee you have to pay, which can sometimes be hefty.
- Examine Marked-Up Exchange Rates
banks and international money transfer services do not utilise the
mid-market exchange rate and instead charge a markup that is not revealed
to you. Their profit is derived from the variance in mid-market and
marked-up currency rates.
The markup is often a percentage of the amount transmitted, so if you
transfer a significant sum, the fee might quickly add up. Furthermore, you
may find yourself paying high prices for money transfers. Before
proceeding with the transaction, you can compare the exchange rate the
banks provide or money transfer service providers.
Aside from the changeable foreign conversion rates, there are other
expenses that you may be unaware of, known as hidden charges. These are
the foreign remittance bank fees. Using services that state the prices
upfront is the easiest way to avoid these expenses.
- Look Out for Correspondent Fee
SWIFT network (Society for Worldwide Interbank Financial Telecommunications)
is a global network of interconnected banks that handles the majority of
international money transactions.
However, not all banks in the world are members of the SWIFT network, and
this is where correspondent banks come in to aid with transactions between
institutions that do not have a relationship with one another. This
third-party bank deducts a charge straight from the transmitted funds.
This amount, known as the correspondent fee, varies depending on the bank
and is typically not disclosed beforehand. And, the fee amount is not
possible to anticipate.
Knowing whether or not your service provider is a member of SWIFT might
help you predict any extra charges for sending money abroad.
- Study Foreign Remittance Fee
banks across the world may charge users for receiving foreign remittances.
These fees might vary by bank and be challenging to reverse. Moreover, you
or your bank do not influence this recipient's fees.
In this scenario, the best way is to carefully assess your alternatives
and attempt to determine if the person to whom you are sending money will
be charged this cost. Of course, one way to avoid all of this is to look
to technology and discover which money transfer software or gateway best
meets your needs.
This saves you time and eliminates all middleman fees, leaving you with
the market-determined, fairly-priced commission. Explore alternatives if
you don't want the receiver to be charged for this expense. The
international push for pricing transparency is underway, but the first
step towards attaining that aim at large is to remain watchful
The need for simple international transfers has resulted in the formation
of various authorised and active money transfer organisations, such as Wise or EXANTE. There are
bank and non-bank choices, each with its own pricing structure.
If time is not an issue, cheaper solutions include, to mention a few, Bank
Draughts, Cashier's Checks, and ACH transfers. Although these techniques
take longer to reach your receiver, they are dependable and secure.
Furthermore, because of cheaper costs, better exchange rates, and
increased convenience, online money transfer is one of the most popular
ways of sending money abroad. Browsing around might help you save money by
locating the most terrific bargain.