The overseas money transfer industry has witnessed significant changes in the last two decades. While making a cross-border fund transfer until the turn of the last century involved dealing with banks or a handful of high-street brokers, that is no longer the case. Now, individuals and businesses get to choose from a number of specialist money transfer companies, and making an overseas fund transfer is no longer as expensive or complicated as before.
Given that there are numerous money transfer companies from which to choose, selecting one requires that you pay attention to different aspects.
When you send money overseas, two costs you encounter are the fees and the exchange rate margin. The latter is what companies add to the prevailing midmarket rate, a rate that large banks use to exchange currencies between themselves. Customers of overseas money transfer companies get marked up exchange rates, although these rates are typically better than those offered by most banks.
Some peer-to-peer trading platforms such as the one provided by CurrencyFair give you the ability to get better than existing midmarket rates.
When comparing cost effectiveness, an easy way to find the best alternative is to look at how much money will get to the recipient through different companies when the sending amount remains the same.
Just about every company lets you pay for your transfer using your bank account. Not all companies accept payments via debit and credit cards, and some that do include TransferWise, WorldRemit, HiFX, and Frontierpay. Depending on where you live, you may even work with companies that accept payments through methods such as ACH, Interac, SOFORT, iDEAL, BACS, CHAPS, and POLi.