Be clever: re­duce your in­ter­na­tional money trans­fer costs

Com­pa­nies with over­seas cus­tomers and sup­pli­ers are re­turn­ing their fo­cus to the on­go­ing need to re­duce ex­penses and in­crease the bot­tom line writes Sean Bar­rett.

Business First - - FINANCE -

is a di­rec­tor with

Cur­ren­cyFair.

In busi­ness there are few easy ways to make these sav­ings hap­pen. How­ever, if you need to move money in­ter­na­tion­ally, then ditch­ing your bank in favour of a spe­cial­ist money trans­fer com­pany may be an ex­cel­lent op­tion.

Tra­di­tional meth­ods are ex­pen­sive and banks are cer­tainly guilty of over­charg­ing for what is es­sen­tially a rel­a­tively sim­ple prod­uct.

The var­i­ous lev­els of bank fees and charges make it dif­fi­cult to un­der­stand the full costs. Typ­i­cally there will be an up­front trans­fer fee and a hefty mar­gin on the for­eign ex­change rate. This mar­gin is the dif­fer­ence be­tween the rate your bank gives you and the rate banks use when deal­ing with each other, or the in­ter­bank rate. It is the ex­change rate that has the big­gest im­pact when mov­ing larger amounts as typ­i­cally done by busi­nesses. In­ter­me­di­ary and re­ceiv­ing banks may also take a slice of the trans­ferred funds. Of­ten these charges are not made clear at the time of the trans­fer.

Spe­cial­ist trans­fer com­pa­nies can of­fer far bet­ter value.

Thanks to the in­ter­net and its uni­ver­sal ac­cep­tance as a means of fa­cil­i­tat­ing fi­nan­cial trans­ac­tions, spe­cial­ist in­ter­na­tional trans­fer com­pa­nies can now of­fer a su­pe­rior ser­vice at a frac­tion of the cost. By lever­ag­ing tech­nol­ogy and global bank­ing sys­tems, they can re­duce their mar­gins and pass the sav­ings on to busi­nesses and in­di­vid­u­als.

Lead­ing in­ter­na­tional trans­fer com­pany, Cur­ren­cyFair, has taken it a step fur­ther and cre­ated a ‘peer to peer’ mar­ket­place, ef­fec­tively ‘crowd sourc­ing’ for­eign ex­change rates to re­duce the costs even fur­ther.

This peer-to-peer mar­ket­place op­er­ates as a net­work of users, each of­fer­ing to in­di­vid­u­ally (but anony­mously) trade money, rather than hav­ing a ‘client/server’ re­la­tion­ship with a bank at the cen­tre. Cur­ren­cyFair’s role, as a reg­u­lated en­tity, is to pro­vide se­cu­rity and con­ve­nience. Their task is to en­sure that busi­nesses can ex­change safely and that the money gets where it needs to

Sean Bar­rett

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