Money transfer companies are quite possibly the closest thing to a perfect solution for people who send money abroad. The development of fintech companies over the past 5 years has been unprecedented.
Money transfer companies are essentially companies designed solely for the purpose of transparency. This is their core goal.
With the explosion of online reviews over the past decade, this has been a key way to prove yourself, and reap massive rewards from being a top rated company.
Money transfer companies fulfill the necessity of currency transfers between two entities. This used to be restricted more to corporations, but now it is becoming entirely geared towards people: expats, holiday makers, business owners, nomads, Amazon overseas sellers etc.
They are often digitally focused, of course, making them extremely accessible via mobile apps. This has been a key feature of fintech companies: to avoid the time-consuming queues of visiting a local branch like with banks, and to have your services remotely accessible.
Getting a good rate – the right rate
There is no decent rate or good rate. There is either the right rate, or the wrong rate.
What many people forget is that a currency is a homogeneous product. My US dollar is the same as your US dollar. This might sound obvious, but what we forget is that there is only one exchange rate.
It may change over time, sure, but at a given time, the US dollar, or the Euro, costs one specific price. Any other price is utterly fabricated.
This trips many people up when it comes to transferring money overseas. People are aware of different rates (i.e. when going on holiday), but less so when it comes to banks.
Banks are still the most common method of transferring money, yet their currency rates are not very transparent.
They have to be hunted down, and even then it is not quick to find. At the point of transferring money through a bank, we might look for some fees, but forget that the price we get is far away from the real currency price.
Banks can be known to really exploit people’s trust in their safety. In fact, 10% of Santander’s global profits come from international cash transfers.
Even if you do come across their specific exchange prices, they would seldom compare these prices to the real market prices – showing customers the differences. Often, this difference will be around 2%-5%.
This means that if you send $100,000 to a different currency, perhaps you’re investing in a property abroad, you will straight away lose up to $5,000.
This has already eaten into your profits, or even worse, made the investment not viable anymore…
Continue reading the article and learn more about bank transfers on Mike Myers’ blog.