4 Things You Must Prepare Before Making An International Money Transfer
Money transfer, whether it is domestic or international, is a part of everyday life.
While some people might not send money abroad as frequently as they do domestically, international money transfers are also as crucial since many need to send money abroad for family support, to buy goods, or even investments.
Unlike transferring money within the country, banks or financial institutions may need more than just the recipient's bank account in order to transfer money abroad.
Either you are a beginner or a pro who simply needs a reminder, here is a checklist we have prepared for you!
List to do
- Prepare Recipient’s information
- Check Exchange Rates
- Check the Fees
- Prepare Time in Advance
Preparation before Your International Money Transfers
To simplify, here is the list of things you should know about your recipient before making an international money transfer.
- Recipient’s full name or company name
- Recipient’s contact
- Recipient’s location
- Recipient’s account number
You may wonder why financial institutions require more data for international options than domestic ones.
The answer is that the detail is required for the safety and assurance of the customers, which refer to you and your recipient.
Cross-border payments and remittances involve more steps and more parties to complete. As a result, the information provided ensures that your money will be delivered to its destination.
Another factor that makes this information crucial is that it can help prevent money laundering. The compliance screening will be an additional layer to ensure that you won't accidentally get involved in money laundering cases.
When transferring money abroad, some people might only google for exchange rates and assume that the first result displayed applies to every bank. However, exchange rates may not function like how many people believe it to be.
In fact, the currency exchange rates can change on a daily basis or even multiple times per day. Also, do you know that different financial institutions offer you different rates?
Additionally, when you compare rates between banks or other financial institutions, keep in mind that the differences in the rates do not always stay the same.
For example, when you compare rates from bank A and bank B, you see that bank A has a better exchange rate than bank B. However, the rate from bank B can be better than bank A the next day instead.
So you should always check the rates on your preferred transfer channel and currency whenever you want to transfer money.
Check Transfer Fees
Aside from exchange rates, the fee is another factor you should consider, as it differs depending on the channel you use and the countries involved. Exchange rates may influence how much money your recipient will get, but don’t forget that fees matter too.
Flat fee vs Percentage fee
- Flat Fee
A flat fee is the fixed amount of fee you pay to financial institutions in each transfer. The more you transfer, the lower the percentage of the cost you pay for this type of fee.
- Percentage Fee
This type of fee works exactly as it sounds. The fee amount charged is calculated based on the percentage of the transfer amount. Generally, it costs from 3 - 5% or even higher per transfer. Therefore, the higher transfer amount translates into a higher fee you pay.
The easiest way to decide which one to use is based on the amount of money you want to transfer. If you only make a very small amount of transfer, sometimes a percentage could be better for you.
Nonetheless, if you need to make a larger transfer, a flat fee would fit you the best as it will keep the price at an exact amount no matter how much you transfer. Furthermore, it is easier to calculate because the flat fee is always fixed at the same amount.
Hidden Fees
Many people may warn you about hidden fees during international transactions. But have you wondered what these hidden fees are?
When people talk about hidden fees, they often refer to the following:
- Recipient Fee
Receiving fee is a fee paid by the recipient for processing and handling, usually added by banks and less likely by independent firms. But, it is important to note that not every financial institution charges customers a recipient fee.
- Conversion Charges
Conversion charges are fees for converting currencies, which can greatly impact transfer costs. Conversion charges can be a hidden fee or not, depending on how upfront the service is about their fees. Similarly to the recipient fee, not every service incurs conversion charges.
If you want to learn more about the fees associated with international money transfers, we have covered this topic in depth in our DeeMoney blog.1
No one wants to pay for fees they cannot check. So how do you avoid paying unnecessary fees?
Other than checking that the institution guarantees a no-hidden-fee policy, you should select a transfer provider that clearly breaks down your fee, showing you how much you send and how much your recipient is going to receive. This allows you to examine the fees you are paying thoroughly.
Prepare Time in Advance
Many people are familiar with domestic transactions that can be issued in seconds. Meanwhile, for most international money transfers, your money will reach the destination within 3 - 5 days, approximately. However, some services can send your money abroad within 1 day or faster.
International money transfers usually take longer to be done due to some additional steps needed. For instance, financial institutions need to convert the currency and regulate compliance checks. Additionally, the processing time and regulations vary depending on the countries and financial institutions involved.
Therefore, if you know that you have to make a transfer, it is important to transfer money in advance to ensure that it will arrive on time.
Wrap it Up
Overall, it is advised that you compare the fees and rates of each international money transfer service before deciding which one to use. Aside from the fee and rate, planning ahead of time and preparing your recipient’s information will increase the assurance that your transactions will be completed on time.
Are you looking for an international money transfer service that makes every transaction better, faster, and easier? Don’t forget to give DeeMoney Neo a try!
We offer you a fast transfer with a 1 working day guarantee, easy-to-use features on our application, and a competitive rate of only a 125 THB flat fee per transfer.
Our affordable flat fee never equates to less service. You can quickly check rates, break down your fees, and calculate how much your recipient will get in our app. So you never have to be worried about hidden fees when you use DeeMoney Neo.
Further read:
1Understanding Fees Associated with International Money Transfers