As we tend to handle more and more international deals and transactions it’s important to learn how to send money abroad cheaply. International bank wires have become outdated and are now too expensive compared to people’s needs. We live in the age of globalisation. If you run a business online, you can easily hire people from any place in the world. Your potential clients can also come from different countries.
While PayPal has become e-commerce standard, it is not the cheapest way to handle quick international transactions, especially if you need to convert and exchange currencies.
Try independent remittance companies.
If you conduct a quick google search and type a simple phrase like “send money online” thousands of results will pop out. There is an excellent choice in offers of remittance companies. Each of them has its own features, advantages and disadvantages.
Decide what’s important for you.
As each company offers different features, you can make the choice based on what you need at this particular moment. Some platforms have very low fees, but slow transaction times. Others can deliver your money to the recipient in a couple of seconds but will charge an additional fee. If you send a larger amount you probably want something very secure and reliable. All of these needs and factors are measurable. You can use a site like Wirly.com, which gathers the information about money transfer companies and allows you to sort them based on fees, safety, speed, user satisfaction and more.
Best local services.
You can benefit from the locally-oriented remittance companies, which specialize in handling money only between particular countries. That way you will get much better rates than with bigger platforms such as PayPal. Thanks to a good local connections, these smaller companies can offer you low fees and good exchange rates between limited amount of currencies. There is probably at least one such company for every destination. For example, Remit2India (as the name indicates) offers transfers solely focused on Indian region.
Watch out for exchange rates.
Many money transfer sites claim to offer free or simply very cheap transfers. However, there is a hidden catch in the form of exchange rates. Your money is not swapped by the same rate which you can quickly check at Google. They add a markup, which is not often clearly explained by the remittance company. So instead of changing your 1 USD to 0.76 GBP, they will convert it to only 0.6 GBP for example. In some cases the change is not noticeable. However, with bigger transfers, they could easily charge you hundreds of dollars without you noticing.
Remember to always double check the exchange rates, so that your recipient won’t be surprised by receiving less money than you were supposed to send him.
Try different currency configurations.
As we’ve mentioned earlier, some companies specialize in sending money between particular regions. The cost and speed of the transaction relies on the financial network of partners and intermediaries a company sets up in these countries. The same applies to currency conversions. It may simply be cheaper to send GBP to EUR, instead of USD to EUR in some cases. There are many examples like this, so if you want to save money and find the cheapest possible transfer, try out a few possibilities.
Don’t pay by card.
To top up the transfer you can in most cases use a regular domestic bank wire or your debit/credit card. Most banks and financial institutions charge an additional fee for processing such transfers from cards. Therefore, it’s always best and cheapest to pay for the transfer by a simple domestic bank wire, which is free of charge.
If you keep in mind these few tips, you should be able to save a few dollars on each transaction. If you run a business, have a family abroad or maybe frequently buy stuff from international shops, you could easily save significant amounts of money after some time.