Important Things You Need To Understand About Money Transfer Companies To Make The Right Choice
Moving money between countries sounds simple, yet it is anything but. Sure, modern technology has provided tons of options, but choosing the appropriate one has always proved to be a daunting task.
For years, international bank transfers were the only options as far as foreign exchange transfers go. In fact, many people still think bank transfers are the way to go for different reasons. For some of them, it’s due to how “official” and secured the method appears. However, in recent years, bank transfers have proven to be not so reliable.
For starters, the fees for international bank transfers are nothing short of exorbitant. Some banks would actually charge both the sender and recipient a transaction fee. And if that’s not bad enough, most of these banks would offer a less-than-ideal exchange rate.
Another problem with international bank transfers is the long turnaround time. A single transaction can take a week or more to be cleared. This is simply not good enough by today’s standards.
International bank transfers have also been linked to quite a number of scams. Governments and banks have tried educating people and putting up various preventive measures, but con artists always find a way of getting the best of some people.
So, what other options do people have if international bank transfers are not good enough? Some people would claim that PayPal is a decent option, but that’s really up for debate.
Here is the thing, although PayPal may have a faster turnaround time than banks, it also comes with lots of trade-offs that cannot be overlooked. For instance, the transaction fees of PayPal business accounts can be pretty high. A domestic commercial transaction is typically charged 2.90% on top of the fixed fee in the United States. An international commercial transaction will also attract the domestic fee plus an additional 1.50% rate!
That’s not all. PayPal tends to freeze accounts and hold user’s money out of the blue. Picture this; you’re placing an order for goods or raw materials from a foreign vendor. But after making the PayPal transaction, the PayPal algorithm decides there’s something suspicious about the transaction. It proceeds to lock your account, and it can take days or weeks to have the ban lifted. Can your business really survive such an issue? How much revenue would you lose in that time?
Transferring money between your PayPal and bank account also attracts additional fees. And just like international bank transfers, PayPal is also not short in scams.
For these reasons, foreign exchange transfers using banks and PayPal are usually hardly recommended. More so for businesses. The inconvenience, fees, and risks, typically outweigh the benefits.
International Money Transfer Alternatives
In recent times, a good number of money transfer companies have come up as more reliable options. In fact, the complete listing of money transfer companies is full of providers competing with some really amazing terms. But, you have to shop around keenly and find one that favors your specific needs.
Here are a few great examples of companies you can use and what they have to offer:
Wise was originally known as Transferwise. The company was started by two friends back in 2010. Fast-forward to 2021, and Wise is one of the biggest international money transfer solutions in the world.
How did they get here?
Well, they combine great branding with friendly fees and efficient services. The company is cheaper than banks, PayPal, and Western Union. They also have mobile-friendly applications that are super simple to use.
Wise has also garnered millions of users, transacting billions within every year due to their transparent systems. On the platform, users can clearly see the fees charged as well as the exchange rates before making any transaction.
Oh, and the company has some of the best exchange rates you’ll find anywhere.
Sadly, Wise is not available everywhere. As of the time writing this, the company supports transactions in 80 countries only.
One of the biggest selling points of OFX is its standard fee. The company charges only $15 for small transactions (at least $1,000) and nothing else. Some banks may deduct a fee before delivering the money to your account – if you are the recipient – but OFX doesn’t receive any of that money.
If you are making a transfer worth $10,000 or more, OFX won’t charge you a thing!
Using the platform is also pretty easy. They have an application for both Android and iOS. They also have 24/7 customer support and decent exchange rates.
OFX is available in 197 countries.
3. Currencies Direct
Currencies Direct is a UK-based money transfer company with offices on different continents. They have some of the best user ratings of any money transfer company.
Currencies Direct allows you to send money to over 120 countries. It supports 40 different currencies and lets you monitor the exchange rates directly from the platform. You’ll find the rates are more favorable when making bigger transactions.
The company usually doesn’t charge any fees. And if your transaction is charged, they’ll alert you of the fee in advance.
One of the many advantages of Currencies Direct for businesses is it supports batch payments.
4. Money Corp
Money Corp has been around since 1962. It is one of the biggest foreign exchange brokers in the UK.
Money Corp offers business owners different transaction methods. You can take advantage of their friendly mobile applications or do your transactions online.
They also provide a dedicated relationship manager, making it arguably the best money transfer company for businesses that need handholding.
With support for more than 120 currencies, there’s no doubt that Money Corp is worth your consideration.
How To Choose The Right Money Transfer Company
Here are six factors to consider when choosing a foreign exchange transfer company:
- Fees – check the transaction fees and any other applicable charges before initiating a transaction.
- Security – choose a company that uses the best encryption and security measures to safeguard customer’s money and data.
- Exchange rate – exchange rates vary every day. However, good companies will offer consistently good exchange rate margins.
- Countries and currencies supported – Is the company available in all the currencies and countries you transact with?
- Speed – choose an efficient company that clears your transactions on time to avoid unnecessary and expensive inconveniences.
As this guide has shown, using the right money transfer company benefits international business in different ways. You’ll enjoy zero to low transaction fees, faster turnaround times, and friendlier exchange rates. All that while ensuring your data is secured.
Look at your needs and use the above review to pick the perfect solution for your business.