Money transfer services are essential in the business world. Business activities create the need to send money out of your country to another entity such as suppliers or part of your business. There are a lot of money transfer companies ready to offer their services, but your choice depends on the nature and the needs of the business. Unlike local money transfers, international transfers have additional challenges such as exchange rates, service fees, and transfer time. You have to weigh providers using parameters such as the transfer cost, and the transfer time to come up best money transfer company for your business. This article is a guide to choosing the best way to transfer money internationally for your business through analysis of the available options.
Bank Transfers
Most business will have bank transfers as their first option. International money transfer via banks is done in a banking hall, through online banking, and via mobile banking. Sending money internationally through a bank is more secure, especially when the transfer amounts are huge. The transaction in bank transfers are also simple to use, but they are not always the most convenient and cost-effective. Bank transfers may not be the most suitable international money transfer given that money transfer is not their core business. Banks offer a wide range of financial services, meaning that they may not have the capability to provide enough support to money transfers.
The exchange rate charged is determined by the volumes transferred. Online money transfer agents and foreign exchange brokers can cost less than a bank because they deal with high transfer volumes. Despite being secure, banks are known to charge a higher fee compared to other international money transfer agencies. Bank transfers within Europe are cheaper courtesy of the Single Euro Payment Area (SEPA) agreement. The agreement was made to make banking easier in the European countries by equalizing the international and local money transfer.
Wire Transfer and Money Operators
The most common money transfers are money gram and western union. You will most likely find western union in banks while MoneyGram is in post offices. These services have grown in popularity by sending money all over the globe and within a short time. The wire transfers are convenient in terms of speed and availability, but you will pay more for their services. The transfer changes mostly depend on the transfer amount meaning that you will pay more if you send huge amounts of money. This option is most convenient for a business whose priority is the speed of sending money. The money transfer companies also give a wide range of services such as instant cash or transfer to bank.
Online Money Transfer
The most common online money transfers include PayPal and OFX. To own an online money transfer account, you only need to sign up with the website and link your bank account or credit card details. The online transfer mample, online money transfer via PayPal will cost you more across borders than in domestic transfers due to the cross-border fee. Online money transfers may be expensive for businesses requiring massive transfers, but it is the easiest to use. Online money transfers are also safe, given ethods offer some advantages, especially when both parties have the same online money transfer accounts. You can transfer money instantly and pay less if both parties use the same provider. Online money transfer fees depend on the providers and the destination. For exthat the providers must be licensed and regulated by agencies such as the Financial Conduct Authority in the UK. In business, online transfers favour small non-urgent transactions due to the time taken and the charging mechanism.
Use of Foreign Exchange Providers
Foreign exchange companies are nowadays competing with traditional money transfer providers. These providers have come up with additional services such as foreign exchange alerts and the ability to set a fixed exchange rate. To send money through an exchange provider, and the sender must first deposit the funds in the forex broker’s account. The deposit can be made online or through direct payment from the bank. The FX broker will later exchange the money and send it to the receiver account. Your bank may charge a fee to transfer the funds to the broker’s account. The cost is equivalent to that of a local bank transfer or free if you share a bank with the FX broker. FX providers have more transparency compared to other transfer methods. The transparency comes from to additional services such as online calculators that show the exchange rate, the total estimated cost, and the total amount you will get after the transfer.
Comparison
Apart from the exchange fees, one can use the following additional factors to choose between the above international money transfer methods.
- Transfer speed
Some providers can transfer funds in one currency than in another. A provider A can be good in transferring pounds while Provider B is useful in transferring dollars. Major currencies such as the Euro, Pounds and the US dollar are generally faster to transfer than exotic currencies.
- Transfer fee
Providers vary in the transfer fees they charge. Some providers will charge you on flat fee bases for each transfer you make while others will have a transfer fee determined by the amount. Generally, online money transfer companies are cheaper than traditional bank transfers. It is advisable to use a flat rate provider if you are sending huge amounts of money.
- Transfer Limits
Some of the providers, especially the online money transfer companies, have minimum and maximum transfer requirements. A provider with a minimum money transfer may not be a good option for businesses that transfer small amounts. In the same way, a provider with a maximum transfer amount will not fit business that transfer money exceeding their set limit. The important thing here is to find a provider who is within your money transfer amount bracket.
- Security
Everyone wants a platform where the possibility of losing their money is zero. You should choose a provider with a good reputation and with the technological ability to ensure that money is transferred safely. Security is all-round since most of the money transfer companies are regulated. It is up to you to ensure that you have given the correct recipient details to avoid transferring funds to a wrong account.
