Ultimate Tips on Sending Money Internationally
Currently, whether it's to donate, order online service, purchase a good, run business, everything involves lots of international transactions being made each day. Nowadays, in the age of globalisation and with more and more people having access to a stable internet connection, it's just very easy to connect with people and businesses all over the worl. There are certain things that affect the total price of money transfers and if one could save just $1 on each of the thousands transactions being made each year it can be a significant change.
Old-school Money Transfers
We are already used to making bank wire transfers or using remittance companies such as Western Union to handle our international transactions. And as we are living in the age of globalisation, we tend to make these international money transfers quite often. You can simply order goods and services from any part of the world. Moreover, you can do remote work for a company with headquarters thousands of kilometers away from your place and get the salary sent to your local bank account.
Most of such transfers are conducted via SWIFT network. It is a special interbank communication system to help financial institutions inform each other about the requested payments. It’s in a way a secure and standardized messaging tool to eliminate language barriers and validate the transfers to avoid international money laundering.
Such transfers usually take around 3-5 business days to reach the recipient and can cost up to $25 per transaction. If you are familiar with blockchain technology you already see how much room for improvement there is…
1. Use independent online platforms
This point regards the difference in costs between online transfer platforms and mainstream banks, which charge significant sums for international bank wires. It is more efficient to use one of the online remittance platforms rather than regular bank offer.
2. Research Reviews
Let's take a look at example of TransferWise Review, a popular international money transfer provider. The author breaks down and explain this platform's fee structure, markup on the exchange rates and other costs. Moreover, he shows both positive and negative sides to better evaluate the quality of the service. Always remember to look for some negative feedback to learn which problems you might expect with particular service.
3. Check the exchange rates
Let’s say that you are in the United States and need to send a payment to the Great Britain. 1 USD = 0.80GBP. You use their free transfer and send about $100. However, your recipient gets only 65GBP instead of 80. What happened? It’s because some of the remittance platforms add their own hidden margin to the currency conversion rates. So the exchange rates differ from the regular ones you can find for example on Google or Yahoo.
Therefore, always check the exchanges rates before sending money out. Look for companies which offer rates close to the “midmarket” or “interbank” rates, as these are the cheapest and best ones.
4. Try different currency pairs
Some companies handle better certain currencies, therefore it may be worth checking out which pairs are the cheapest to send. For example, if a company is located in Europe, they will handle EUR transfers much cheaper and faster than USD transfers.
5. Maybe Try Cryptocurrency Transfers?
Blockchain technology makes sending crypto coins fast, secure and cheap. To send BTC, LTC or ETH one has to pay less than $1 and the recipient will get the payment within minutes directly to his personal digital wallet.
However, we are all aware that there are still some obstacles these digital coins have to overcome before they can be widely accepted. The major problem lies in the uncertainty and fluctuations of their value. Then, there is a lack of government acknowledgement and regulations. Also, not many places accept them, so you can’t spend the coins easily.
It is obviously changing. However, before we get there, some old-school money transfer platforms already found a way to utilize blockchain for regular fiat money transfers. That way they are able to lower the transaction costs.
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