Top 5 International Money Transfer questions answered
How do international money transfers work?
International money transfer is the process of sending money overseas. When sending money overseas, you generally need to open an account with your chosen service and deposit money via bank transfer or credit card (this may incur extra fees). You will then need to tell them the country you’re sending funds to and the destination bank account number.
Due to strict regulations around international money transfers, you will also need to prove your identity by submitting a proof of identification. The service then processes your transfer as quickly possible.
Why do banks charge so much to convert currency?
Well, because they can! Its as simple as that. If you asked the banks you’d probably get a big document full of legal jargon justifying the ridiculous fees. Bank fees on international money transfers and currency conversions can be split into two categories: Implicit and explicit costs. Explicit fees can be a % fee or a fixed fee for each transaction.
Implicit costs are usually hidden in the exchange rate. If you compare a bank’s exchange rate with the mid-market rate (otherwise known as the real exchange rate), its usually a bit lower. This is the margin the banks have added to account for fluctuations and maximize profits. Depending on your bank, this could be as much as 2-6% off the mid-market rate!
Putting this all together, upfront fees and the hidden margins on the exchange rate add up to quite a lot depending on how much you are transferring!
Check out our blog on IMT hidden fees to learn more about fees.
Why should I use an online international money transfer service?
The most obvious answer to this question is the international money transfer services we’ve partnered with offer much better rates and low or no fees on transfers. Their services are available 24/7 and you can make the transfers from the comfort of your plush sofa, or wherever you are. Try it out for yourself by comparing the top international money transfer services on PocketWise!
Is my money safe with these online money transfer services?
Yes, all of these services are heavily regulated and security is of very high importance for them. All of these services use secure websites and give you the tools to track your transfer at every stage.
How long does it take for my money to reach the recipient?
This depends on a few factors, the currencies you are transferring to and from, and the service you are using. For most of the popular currencies, many services we compare are able to transfer within one business day. They usually say up to three working days but in reality its much quicker than that.
If you have any other questions about international money transfer, get in touch with us, we’re always happy to help!