How to avoid costly mistakes with your currency transfers
When it comes to international currency transfers, it pays to be well informed and have your wits about you. Many foreign exchange providers are not very transparent about their fees and charges. And it is this lack of transparency, that can make it hard to know whether you’re getting the best deal or not.
The good news is that with a bit of due diligence and the right partner, you can avoid these pitfalls and make your money go further. Here are our top tips to help you get the best deal for your currency transfers.
Tip 1: Get a live comparative quote If you need to make an international payment, or want to send money abroad, it might be tempting to rely on your bank. However, be weary of retail exchange rates and shop around with a specialist provider who can give you a comparative quote that could help you make significant savings on your currency transfers. It is important to note that exchange rates are constantly changing, so any comparative quotes must be done simultaneously off “live market rates” for accurate comparisons.
Specialist foreign exchange providers have access to better pricing from their liquidity providers as a result of the large bulk order volumes they manage and can pass this benefit on to their clients. Furthermore, as specialists, these providers tend to be very service focused and offer additional value add such as assistance with tax migration, exchange control matters and foreign tax clearance from SARS, so you can expect more bang for your buck.
Tip 2: Don’t fall for promises of “0% commission” or “no fees” A lot of foreign exchange providers lure customers with promises of “no fees” or “0% commission”. While this may be the case, it just means they need to make their money elsewhere. Ensure that the margin (the difference between the buy and sell prices from your provider) from the exchange rate on your transaction is disclosed to you by your provider in line with FAIS regulatory legislation, and not just the commission or transaction fees.
Tip 3: Watch out for inconsistent fees and stretching margins Make sure that you are benchmarking exchange rate quotes from your provider against reliable market indicators for consistency in pricing. Some providers will squeeze their margins in an effort to win your business and then be inconsistent with their pricing on future quotes or stretch their margins without alerting you because their original “price promises” are not sustainable.
Tip 4: Don’t just focus on price While it is tempting to simply focus on price and look for the cheapest quote, you should also consider any additional value add being offered by your foreign exchange provider. In addition to assistance with tax migration, exchange control applications and foreign tax clearance from SARS (all typically offered as a complimentary benefit at no additional cost), it is worth considering other important aspects such as ease of transacting, speed, security, reliability and personal service. Sending large amounts of money can be a daunting prospect, so be sure to choose a provider that understands your requirements and is willing to cater to your individual needs.
At Currency Partners, we give our clients access to the best pricing and service available in the market and understand that behind every currency transfer there is a story that matters to you, which is why you are our most valuable currency. We value you.
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