Money Matters:
We take a look at an app that makes sending money overseas easier and can allow you to save on fees at the same time.
Transferring overseas made easy
Ever wondered why the fee for a crossborder remittance service is deducted from the amount you’re transferring? It’s not only confusing, but your recipient doesn’t get the full amount you transferred.
How fees are calculated
Fees for international money transfers vary from provider to provider. Some banks charge as high as eight percent of the money transferred; others may have no transfer fee but won’t give you the interbank rate.
Additionally, the fee is normally deducted from the total transfer amount instead of an additional charge. So, if you’re transferring A$100 to Australia, the fee might be one percent (A$1); the remittance company will transfer A$99. For A$5,000, the fee might be 0.6 percent (A$30); the amount transferred will be A$4,970.
But, if I’m remitting A$2,000 to someone in Australia, I like to know they’re receiving the full amount – I prefer to pay any fees incurred on top of the amount I’m sending.
A different type of money remittance
Revolut is a financial app founded in the UK and designed to provide a money transfer service without the high fees and complicated deductions associated with traditional financial institutions. It’s found in over 30 markets in the world, including here in Singapore.
To begin sending money to another country with Revolut, download the app and follow the instructions to set up an international money transfer. The app automatically applies the interbank rate for currency exchanges. (Like most providers, it applies a small weekend mark-up to FX rates.)
From that point, Revolut does several things a little differently.
#1 Set fee of 0.3 percent
All transactions are charged 0.3 percent on the amount exchanged – lower than many other remittance service providers. For example, transfer S$120 in AUD with Revolut, and the fee is 0.3 percent (S$0.36). One close competitor of Revolut charges S$1; one local bank charges S$40.
#2 Fees pegged to a minimum of S$0.30 Regardless of the money transferred, there’s a minimum fee of S$0.30. This applies for all currencies that can be remitted with Revolut. So, even if you exchanged S$50 to any foreign currency, the minimum fee you need to pay is S$0.30.
#3 Fees capped at S$9
Unlike other remittance companies, Revolut caps fees to a maximum of S$9. So, if you’re sending S$10,000 in AUD to Australia, the 0.3 percent fee would be S$30; but you’ll only ever pay S$9 with Revolut.
#4 Your recipient gets what you send Revolut charges the fee as an add-on. If you’re transferring S$2,000 in AUD with a fee of S$6, you’ll pay S$2,006 for the service. This means that you’re remitting the exact amount you wish to send.
#5 Automatic calculation of fees
The app automatically calculates the fee based on the amount you’re transferring. The fee, exchange rate and estimated arrival time are all shown clearly on a review page before you approve it.
Revolut has three customer plans: Standard, Premium and Metal. Learn more at revolut.com.