Keep an eye on fees when sending money overseas, say experts

TORONTO — Several years ago, while studying abroad, Anton Malkin found himself facing an unexpected challenge.

Malkin, 30, was living in China while completing research for his graduate studies, but his income from teaching and scholarships was in Canada. Every few months he found himself wiring anywhere from $5,000 to $10,000 overseas through his bank.

“The thing I was surprised the most about is how cumbersome and confusing it is every single time,” Malkin says.

“You would think that it would get easier the more you do it, but unless you use the exact same two branches every single time, it doesn’t.”

Sending large sums of money overseas can be a complex and expensive process. Experts suggest keeping a close eye not only on service charges, but also on currency exchange rates, as some institutions can have better offerings than others.

“In one case I did a back-ofthe-envelope calculation ... and realized that if I used bank Z instead of bank X, I could have gotten $400 or $500 more dollars,” says Malkin.

A plethora of online-based financial technology startups have sprouted up in recent years, offering alternatives to the traditional banks and money transfer services like Western Union.

Some are able to offer more competitive rates because they don’t have a bricks-and-mortar presence, which means their costs are lower.

Online remittance company WorldRemit allows migrant workers to send money back home to their families for as little as $2.99 per transaction, depending on how much money is being sent and where.

That makes it more cost effective to do more frequent, smaller transactions, rather than having to do send money in one big lump sum, says Richard Meseko, WorldRemit’s Canadian country director.

“They are able, for the first time, to do micro-remittances,” Meseko says.

“While $20 may not seem like a lot here, it can help friends and families in these developing countries get through the week or deal with an emergency.”