Five Considerations When Comparing Money Transfer Services

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Comparing Money Transfer Services

As the world becomes more and more globalised, there is a greater need for individuals and businesses to transfer and receive funds to and from abroad. We also know that using banks for your overseas fund transfer is one of the easiest ways to pay much more than you should.

Thankfully, there are a number of options one can choose from to transfer their money without paying hefty bank charges. These include specialised remittance services, Forex currency brokers and specialists, as well as online money transfer services. But with so many of them these days, it can get confusing on which ones to use.

But as we do with all other financial products, we can easily compare them. Let us look at some of the factors you should consider when choosing a money transfer service:

Fees and charges

The amount of fees involved in your money transfer is obviously one of the biggest worry and concern one would have. Here’s a look at the sample bank charges you can incur on your money transfer:

  • Handling commission – 1/8%, minimum S$30 maximum S$100
  • Commission in lieu – 1/8% minimum USD10 maximum USD700
  • Cable Charges – S$20
  •  Overseas bank charges – SGD50

Moreover, these charges exclude the exchange rate loss which you can experience, especially when you are using a bank. With the sample rates above, you are likely to incur a minimum of $113.50 in fees for a $2,000 transfer to Australia.

For Paypal, the fees and charges differ depending on the country you are from and sending to. Say you are sending money from Singapore, you will be charged a fixed 0.5% if you are transferring from your Paypal balance or bank, or 3.9%+ $0.50 if you are using a credit or debit card. So on a transfer of S$2,000, you will likely pay a minimum of $10 and up to $78.50, excluding currency exchange conversion.

While using Paypal still saves you more than $30 compared to a bank transfer, you can save even more if you use one of the online money transfer methods offered by currency specialists and specialised money transfer services. Some of these allow you to get started from as low as S$6!

Some transfer services also set a minimum transfer or charges fees according to a percentage of the funds you transfer. So look out for these as it can affect the number of fees you will be paying.

Exchange Rates

Since you are likely to be converting your money to a different currency when you send it overseas, you should try to find out about the exchange rate your service provider is using. Banks are known to use a huge spread on their currency conversion, as you might have already witnessed from your credit card bills.

Thus, it makes sense to use a Forex broker or P2P money transfer platform to help you get the most competitive rates.

Receiving Account

One of the main reasons people continue to pay the hefty fees charged by banks for money transfer is because they have access to a vast network of agent banks which can allow your recipients to get your money in their bank account.

However, you can easily mitigate this problem by having your recipient set up an account with the money transfer service you are using, and often at zero cost. This is especially useful if you foresee that you are going to be making regular transfers in the future.

Regulation

The security and safety of the funds you are sending is of utmost importance. You do not want it to be exposed to any kind of risk of being “lost” in the midst of transfer so be sure to check that the transfer service you use is regulated by a recognised authority.

Transparency

Try searching for the charges bank levy on overseas money transfer and you’ll realise there isn’t really a clear indication. These often include rates that require you to search according to sending/receiving countries, and you do not even know what rates they use when converting your currency.

Many specialised money transfer services actually show you the rate that you can on the spot using live rates, as well as offer a simulation of the fees you will be paying based on country and amount. Look for those which offer an “all-in” charge rate so that you have a precise idea of how much you will be paying.

So if you are interested in transfer money overseas and are looking to compare the best money transfer providers then check out our money transfer comparison table to help you make an informed comparison today.

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