As a first step, it is essential to understand what money transfers are. Putting it simply, money transfer is a service which enables an allocation of funds from one account into another. With online banking services becoming more prominent, allowing customers online access to their account at a time and place of their choosing, money transfers can be carried out quickly and most efficiently.
Since there are ample money-transfer alternatives to choose from, here are some of the most important factors to consider when choosing a method which best accommodate your needs.
Figuring the costs. The costs involved in sending money depend on the fees commissioned by the service providers andon the currency exchange rates – varying from one company to another and fluctuating frequently. Next year, once new laws will go into effect, service providers will be required to provide the aforementioned information in advance, that is to say, prior to payment. While some money-transfer companies have already begun providing this service, other companies have not. Having a comprehensive view of the various money-transfer services—their fees and the daily-changing currency exchange rates—makes sure to obtain, examine and reconsider the following information:
- Exchange rate. Currency valuation is determined by the flow of currency in and out of the country. Correspondingly, exchange rates reflect the variations in the international currency market, and, therefore, they float freely and are in constant fluctuation – either they change daily, or even several times per day. Naturally, exchange rates can differ amongst various companies since those adjust the exchange rate in order to increase their profits.
- Many services charge transfer fees. Fees are determined by several factors:
- The sum that is being transferred
- Urgency of the transfer
- Currency type
- The source of the transaction’s funding
The total cost of any money-transfer transaction includes the sum of the funds that were transferred along with any additional fees you were required to pay.
Since financial technology is increasingly developing—blockchain technology being one prominent example—services and fess will inevitably decrease in the near future; it is therefore advisable to keep track of such technological advancements.
An important tip for lowering your Wire Transfer fees:
In order to receive the best low-priced for a money transfer online bank account, be sure to conduct the transfer using the same currency as the one in your account. Currency conversion fee is the one parameter which makes international wires so utterly expensive. Banks can charge exchange rates of 0.5% to 3% (such is the case with PayPal, for example). Therefore, if you are in the need of an international wiring of USD, for example, yet your account uses a different currency, make sure to hold the sum necessary for your transfer in USD. Otherwise, you will be forced to make a conversion in order to complete the transaction, and the overall fee can easily reach 2% to 3% from the total amount you wire.
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Michael Dewan is head of PR at GBO International Financial Services LTD . GBO is becoming a world leader in providing corporate services for international companies. These services include assistance with: incorporation of companies, opening business bank accounts, licensing, payment solutions, nominee services and more. GBO offers the most innovative A to Z financial solutions for high-tech companies, eCommerce, and more.