Are you looking to transfer money overseas?
Sending money overseas can be expensive and often time-consuming.
In this article, we detail your options, show you the tricks to look out for and make sure you can transfer with confidence.
Are you transferring money to another currency for the first time? If so, you’ve come to the right place.
So, you’re looking to send money overseas? It could be for work, family, or maybe you’re heading off on a much-needed getaway?
Whatever your reason, the options for how you send AUD to another currency are endless.
There is certainly no shortage of information on the topic and it’s important that what you read has YOUR best interests at heart.
Now yes, we are a money transfer provider. Meaning, we professionally exchange currencies. However, we’re taking off our sales cap here to simply give you the facts so you can get the most out of your hard-earned money.
Spending a few minutes to take in the information in this article should save you thousands down the line, especially if you plan on exchanging currencies regularly.
Firstly, let’s look at the different ways you can transfer money overseas. Each provider has its pros and cons.
So many people use their banks to transfer currencies simply because they think it’s the only option available.
Often transferring currencies is simple through the banks, with their online platforms and apps being so efficient.
You can also count on the banks to be secure with the exchange – you can relax knowing your transfer won’t be diverted to a shady account…
So, the question is then; why would anyone use anything but the banks to exchange their currency?
The reason is obvious. It’s expensive! On average, the banks charge around 3% to 5% on the live market rate.
To begin with, the actual exchange rate you get will often be lower than what the market value actually is. Granted, it’s not a huge difference, but a few cents (often more) on each dollar adds up quick, especially when you transfer large sums.
On top of this, you’ll be slapped with a transfer fee, typically between $5 – $25 depending on who you bank with.
If you do decide to transfer with the banks, it will often be convenient and secure, but you’ll pay for it.
You may have seen Western Union at the airport, WU has both online and physical locations and specialises in cash transactions.
Their key selling point is that you can transfer money overseas, and someone can directly go and pick up cash from their providers.
When using Western Union, an online transfer will usually take about three days, depending on where the money is being sent.
Their fees? Like the banks, they can often charge high transfer fees on each transaction, especially if you’re transferring money abroad – which is what this article is about.
The exact fees depend on the size of the transaction and vary between currencies.
PayPal is the most widely regarded money transfer system. The reason being most people already have an account with them.
It’s convenient knowing that person you are sending money to most likely has a PayPal account already, and there are no fees associated with creating an account to begin with.
Given the fact that PayPal’s transfers are exclusively online, payments are generally made within twenty-four hours.
However, the cons of PayPal are similar to those of the banks. Chances are you will be hit with a hefty currency conversion fee, which can vary depending on where the money is going. Also, if the person you’re sending money to doesn’t have a PayPal account, then these fees will be much higher.
We get it. It’s probably a bit cheeky sneaking ourselves into this article, but rather than simply talking about ourselves, we’ll talk about money exchange providers in general.
The reasons for using a money exchange provider are simple – it’s what we do!
Unlike the banks or PayPal, exchanging money between currencies is what we specialise in.
Firstly, we provide money transfers to almost every country and can send your money places that most banks simply can’t.
Secondly, our easy to use App or desktop profile makes the process a breeze, and your transfer happens between 1 to 2 business days, and often instantly (depending on your currency)
Thirdly, we offer a far better exchange rate and transfer fee than the banks or PayPal, with little to no transfer fee.
What this means is that by using a money transfer service, you can easily transfer your money with a far better exchange rate – sounds pretty simple doesn’t it?
And our cons, it’s only fair I guess – sometimes we can write blogs that skew in our favour…
But only for the good of our customers! (you).
1. Avoid excessive transfer feesIt’s been touched on already in this article that transferring money via your bank will be costly. To transfer your AUD, or any other currency into another one, it’s always going to cost more if you don’t use a dedicated money transfer provider. When you use a dedicated money transfer provider, the chargers for the transaction will be based on a percentage of the amount you transfer or a set fee – it depends on the provider. In some cases, a money transfer provider won’t even charge you a fee. This is generally for people who regularly exchange large sums of money. Some transfer providers might offer no transfer fee, but charge a higher exchange rate. While other providers might do the opposite and offer an enticing exchange rate, but a bigger up-front transfer to begin with. Every transfer provider is different, and it’s always important that you look into what’s available in the market.
2. Secure a better exchange rateExchange rates change on a daily basis. The rate you saw yesterday could be different from the rate you see today. Everything from local politics to major world events can send the value of a currency up or down. To make sure you get the most out of every dollar you send, doing basic research about exchange rate trends month on month is a worthwhile exercise. Now, I understand that sounds tedious if money exchange isn’t your thing – which I assume it’s not – then it’s fair to think that. However, even if you’re looking to send your money once, knowing the common spikes in currencies throughout the month can make your money go that little bit further. Now, we all like more money don’t we? A great place to do some basic research on exchange rate trends after this article is here. Also, you can set up a rate alert with us and we’ll let you know when the best time to transfer your currency is. Follow the link here after this article to secure you optimal rate.
3. Apply quickly onlineSigning up for an online account with any money transfer provider is easy and only takes a few minutes. Here at BFX, you can even transfer your money over the phone with a real person. Who knew that real people still exist in tech! Having an online account makes life easy. You can quickly view your exchange rates, fees, and the time it will take for the money to land in the account that you’re sending it to.
4. Transfer your money within days, and often hoursThe banks are sticklers for making you wait days for your money to transfer when an overseas exchange is involved – especially over weekends and holidays. Since a currency exchange provider is in the business of doing just that, often the transfer timelines are shorter. Your recipients won’t have to wait days to receive their money, and most cases, the option of an instant transfer is available (sometimes subject to a higher fee and depending on the type of currency).
Throughout this article, we have touched on the importance of knowing what affects exchange rates, and a few common factors that can make a currency plunge or spike.
I figured it might be handy here if we simply listed three of the biggest factors that you should know about exchange rates.
With these three snippets of knowledge up your sleeve, along with a quick look at the link we placed above, you’ll be an exchange pro in no time.
1. Inflation rates
When a country’s inflation rates are low, the value of their currency will increase. This is because the cost of goods and services rise at a slower rate.
When a country has a high inflation rate, naturally everything costs more so the value of their currency decreases.
Often these country’s interest rates will be high, so let’s take a look at that next.
2. Interest rates
Forex, interest rates and inflation rates are all tied together, and usually have a positive or negative effect on each other when they go up or down.
When a country’s interest rates are high, lenders are often doing pretty well – after all, they’re getting more money. This means an increase in a country’s overall capital, and therefore the increase in their currency.
3. Political events
When a country is in political turmoil, interest from overseas investors is obviously going to be low. As a result, this slows down their economy and can have a dramatic effect on the value of their currency.
The same goes the other way. If a country is leading the way with innovation and positive change, then that country will gain the interest of overseas investors.
Make sure you consider these three factors when you’re looking transfer between currencies. Doing so will make sure you secure the best rate possible.
Use a dedicated money exchange provider.
The banks, PayPal and Western Union can be convenient, but expensive.
There are many differents options available for money exchange providers.
Inflation, interest rates & pilitics can influence exchange rates.
Getting your online account started with BFX is simple.
BFX Money Transfer is regulated in Australia as a designated remittance provider with the Australian Transaction Reports and Analysis Centre (AUSTRAC), remittance sector registration number: IND1000519571-001. Australian Company Number (A.C.N) 611 376 820. Member of LEI Identification Number 5493001WDPYLPVM7RZ80.
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