There are more options than ever to exchange and send money, especially in terms of international money transfer and thanks to the development of new technologies. But having more possibilities does not mean that it is a simple process, especially if you want to achieve the best conditions and avoid paying too many commissions. There are several options to consider before choosing how to send money. What commission do they charge? How long does it take to get the international transfer? What is the cheapest way to send money online? Is it safe?
First of all, we must bear in mind that there are two types of transfers, mainly: SWIFT and SEPA. The first ones (Society for World Interbank Financial Telecommunication) are transfers made through the SWIFT interbank system, which is the oldest of the two and the most widespread since it has thousands of member banks.
For its part, the SEPA or Single Euro Payments Area emerged in 2008 as an EU initiative to facilitate the movement of money between the different member countries, so the transfers have the same conditions as if they were carried out within the country. , provided that the amount is less than 50,000 euros. The only problem is that it is only available in the EU.
What are the commissions of international transfers
One of the most important reasons for selecting a transfer method is the cost and the derived commissions. The problem is that it is not easy to discover the real price of a money transfer since many of the costs are hidden. Even when advertised as “no commission”, free or 0% include some cost to the user. The fees for transferring money can be varied, from commission percentages on the amount that you want to send, to free transfers in the case of some banks when it comes to SEPA transfers.
But in this case, there are other types of commissions, related to the exchange rate, which occurs when making transfers between different currencies. The currencies do not have the same value, so to convert a quantity between different currencies you have to go to the exchange rate. The exchange rate is expressed between two different currencies, such as euro/dollar, euro/pound, euro/yen… and represents the value of the first with respect to the second.
But that does not mean that this is the kind of change your bank is going to apply. It is not strange that banks vary in their favor that official exchange rate and apply a change that favors them, although that is something that they do not usually publish when advertising rates or rates of international transfers. On many occasions, what is usually hidden under transfers “without commissions” is this type of change that hurts the client by using a worse exchange rate than the one indicated by the market. An exchange rate with a surcharge that can add a lot of money in the case of making large transfers. In these cases, operators like Transferwise offer a real exchange rate and easy to follow so you do not have to read any small print and have everything clear.
Finally, we must bear in mind that all this can be added to the expenses in which the recipient may incur SWIFT transfers received from abroad. Sometimes it is free, but in others, entities charge amounts that can represent a percentage of the amount received or a minimum of between 15 and 25 euros without taking into account the amount transferred.
This situation can make payments more expensive, especially when it comes to large shipments or regular transfers.
The cheapest way to make international transfers
New technologies have also led to the emergence of other alternatives, whose operation differs from traditional banks and other providers, and do not charge commissions in addition to taking a margin in the exchange rate. One of the available options is TransferWise, a platform that applies the average exchange rate of the market, also known as the real exchange rate. In addition, it charges a single commission, advised in advance, which causes the costs to be much lower. In this way, the user can get more out of the money he sends.
How long does an international transfer take?
The delivery terms of an international transfer are not mathematical but depend on numerous options, such as the method used to send money, the monetary route or the amount that is being sent.
How to make an international transfer
Once you have obtained the name of the recipient and the country of your bank account, a more specific identifier is needed: it is the BIC code or the SWIFT code, identifier of financial institutions and banks. It consists of a number of 11 characters, although occasionally it may have only eight.
In addition to the BIC / SWIFT code, which identifies the bank, it is necessary to indicate the specific bank account of the recipient to whom the money is to be transferred. Although in countries such as the United States or New Zealand it is not used, the IBAN code is very widespread in the case of European countries and many other countries in the world.
Once all these data are known, the client is already in a position to make a transfer. You can go to a bank and ask the staff to make an international transfer. Most banks also offer the option of making transfers through their telephone line, their ATMs and especially through the Internet, where they will request the data required to make the transfer without leaving home.
It is important to check the data well because in case they are incorrect the transfer could be returned and we would have to pay a commission for this.
Is it safe to send money abroad?
There are still many people who are afraid to put their data on the internet, send money online or even buy through the web. People who bet to make transfers from their bank, thinking it is the safest option.
People are still using their banks to send money abroad, but in recent times new options have emerged in the market that are competing with them.