Safely Transfer Your Money Online

Nowadays, making an international money transfer is a very common thing. The global marketplace requires a free flow of money from one country to another, for the purchase of property, goods and services, and gifts, for remittances, and for the repatriation of funds. These money transfers may be conducted as a once-off activity or on a daily, weekly, or monthly basis.

Regardless of your money transfer requirements, it’s important to know which options are available and how cost-effective these options to execute your transfers actually are. Affordability, security, reliability, efficiency, and reputation of the money transfer service are among the most important facets of the money transferring process. Besides these, you need insight in the relevant regulations.

The central concept of the international money transferring process is the exchange rate, the “value of one currency for the purpose of conversion to another”. It consists of two components: the base currency and the quoted currency, together the currency pair. For example, with the GBP/ USD currency pair, commonly known as “the cable”, the GBP (British pound) is the base currency and the USD (US dollar) the quote/ counter currency.  Whenever you send money overseas, you must know how much 1 unit of the base currency will ‘buy’ you in in the quote currency. In the case of the cable, you may be quoted 1.4000, which means £1 can be exchanged for $1.4000. Once you are ready to transfer money abroad, you should compare the exchange rate offered by money transfer services to ensure you’re getting the best possible deal.

How safe is it to send money overseas?

Many first-time money senders are concerned about the safety of sending money abroad. A legitimate concern, because how can you be sure that the online money transfer service, land bank or non-bank entity is a trusted service? The most important rule to live by: only use trusted money transfer companies for international funds transfers. The money transfer industry is a highly regulated field, and there are multiple regulatory agencies and authorities that issue licenses to money transfer companies, including the FCA (Financial Conduct Authority), ASIC (Australia Securities and Investments Commission), FinCEN (Financial Crimes Enforcement Network), Department of Financial Services of the State of New York, the Georgia Department of Banking and Finance, among many others. To make sure your money transfer will be safe and smooth, always use the services of a fully licensed money transfer company.

How can I be sure I’m using the right money transfer company?

In the previous paragraph, we strongly advised you to use a fully licensed supplier. The reason for this advice is simple: once a company receives a license, it is bound by the regulatory framework that governs international money transfers. Any questions, queries or complaints related to the services provided by a regulated money transfer company can be directed to the company and/ or the licensing authority. Companies do not want to have their licenses revoked or have fines imposed on them for non-compliance.

Beyond regulation, there are several other trusted ways to measure the efficiency and effectiveness of money transfer companies. For example, BBB (Better Business Bureau) ratings tend to offer peace of mind when customers are looking to objectively assess the reliability of a financial services company. While companies are not required to have BBB accreditation, it does reflect honesty, transparency, responsiveness and integrity and as such can serve to establish trust. Although not crucial in determining safety and security, BBB accreditation is always preferred. TrustPilot is an independent platform for the evaluation of businesses by customers. A positive TrustPilot rating indicates a high level of customer satisfaction with the money transfer service. For example, internationally acclaimed money transfer company HiFX has a 5/5 rating on TrustPilot, indicating that a majority of reviewers rate its service as “Excellent”.

What makes a money transfer service reliable?

Regulatory compliance, reputation, customer satisfaction and a favourable public image should all be considered when determining the reliability of a money transfer service. Companies like HiFX, MoneyCorp and XE have received praise from clients over the years, which is a good indication of the reliability of these online money transfer services.

Reliability is a performance measure. A money transfer service cannot be deemed reliable if its services have not been tested and proved as such. Established money transfer companies have the upper hand on fledgling companies since their business operations clearly indicate whether they deliver or not.

What factors should you consider when choosing a money transfer service?

Cost considerations, trust, reliability, convenience, speed, best money transfer options, customer experience and regulatory compliance are all equally important. The goal is to pick a money transfer service that meets these multiple criteria simultaneously. For many people, cost, speed and regulation are the most important elements to consider. It does still make sense, however, to also keep your eye on other criteria. The quality of a company’s customer service, for example. You will want to ensure that you’re able to communicate effectively with customer support if you have any questions. The level of customer service is an indication of how well a company is run.

As a rule, it’s best to contact customer service before you deposit and transfer funds abroad. A pleasant customer service experience can make all the difference in the world. The money transferring tool offered is equally important. How easy is it to deposit and transfer funds? And to withdraw funds that you have received? What costs are involved? What are the processing times for different countries, territories and regions? Are you able to lock in a favourable exchange rate at low fees and commissions? Important questions that you should have an answer to before sending money abroad.

What are the benefits of transferring money with a regulated service?

Regulated money transfer services offer an additional, priceless element on top of the service you pay for: peace of mind. You are able to send and receive funds without having to worry about being scammed or overcharged for these services. Regulators prevent companies from taking advantage of trusting consumers. These “consumer watchdogs” have the teeth to enforce penalties in case of non-compliance, malfeasance, or misconduct. Plus, regulated money transfer companies are insured against bankruptcy, liquidation and claims against the company. In short: regulations protect customers. Unregulated money transfer companies are not accountable to anyone.

What types of costs are associated with sending money overseas?

Believe it or not, but money transfer fees (wire fees) are the least of your concerns. Many money transfer companies will offer minimal fees for the actual transfer, if at all. The most important cost involved is the exchange rate. Always scrutinize the interbank exchange rate before you transfer funds. This is the “standard” exchange rate used by the world’s leading banks for money transfers. Most people will never see that rate on their money transfer receipts. Banks use the interbank exchange rate, but add a significant additional charge ranging from 3% to 6%, known as the “bank spread”. You can save a fortune by picking the money transfer company with the lowest spread.