Banks are notable for being a safe and secure way to hold and transfer your money. However, it is becoming more commonly known that there more efficient ways to transfer your money internationally, without the added cost and waiting time.
An international money transfer involves sending money between two countries with different currencies. When making an international money transfer through a bank, an intermediary bank is required if the banks do not have an established financial relationship. For example, a bank in the United Kingdom that has been instructed to wire funds to a bank in China, can not make a direct deposit unless the receiving bank has a preexisting working relationship with the sending bank.
Despite the safety and security of international money transfers via your bank, when making such transactions, you can be charged extortionate fees. There are several reasons why bank rates are so high, whilst specialist and online money transfer companies often charge substantially less than banks to send money abroad.
Banks use the financial messaging system SWIFT international payment network for money transfers. The majority of payments sent outside of Europe are sent via SWIFT. The BIC and the IBAN are used to locate the required account to apply funds to an international bank.
Incorrect bank details can delay the international banking process even further; therefore, it is essential that you double check before making your request. The recall process can take weeks leading to long delays in the recipient receiving funds. There are several factors to take into consideration when determining how long it takes to make an international money transfer; they are as follows:
No matter how much money you are sending, the banks charge a minimum fee for international money transfers. The more you send, the more you should expect to pay in fees. There are several reasons why bank charges are so much higher for international money transfers; these include the following:
Currency exchange rates are never constant due to the continuous transactions taking place between buyers and sellers. Therefore, when you go into your local bank, the exchange rates that you see are never accurate, they are always higher due to the additional variable fees the banks include.
The bank will typically inflate the rate to protect themselves against any fluctuations that might take place during the conversion process.
To save time and cash when making international money transfers, there are several cheaper ways to send money abroad, referred to as money transfer services. Since they don’t deal with banks, their fees are much lower and the transfers are instant. Such services are available online and once you have set up an account, and in some cases verified your identity for fraud prevention purposes, you can send money abroad using your debit or credit card.
Save yourself paying expensive fees to send money to another country and avoid using your bank for international money transfers. Money transfer services provide the same security against your money as a bank, the funds are typically transferred immediately, and the fees are much lower. One of the many advantages of using money transfer services is that there are no hidden fees. Money transfer fees vary between providers; therefore, it is advised that you shop around and do some research for the best deal before making a transaction.