How to Avoid High Fees and Expensive Exchange Rates When Making International Payments
Whether you are working abroad and sending money home or you are international company paying salaries and suppliers in several countries or you are just paying international tuition fees, in today’s global world people need an easier and cheaper way to make international payments and exchange currencies. In this post, we will explain how to avoid high fees and expensive exchange rates when making International payments step by step.We will also summarise possible solutions to common problems related to international payments and foreign currency exchange.
How to Avoid High Fees When Making International Payments?
When it comes to international money transfers for most people their high street bank is the first port of call and automatically assuming that this is their best option. However no matter where you live and who your bank is, in the majority of cases banks international transaction fees & charges are excessive and hidden from visibility.
There is alternative better option and that is FX Brokers such as ourselves. Most are new Fintech platforms which are growing at a rapid pace due to their growing popularity amongst price-savvy users. The biggest advantage with most FX Brokers clients do not usually have to pay fees or transaction charges for making international payments and they offer payments to a wider range of countries.. Some of the cases where an FX broker can be most useful and can save you a large amount amount of money are:
- Making regular money transactions abroad (paying mortgage, international school fees etc)
- Buying supplies and materials from around the world
- Purchasing luxury items such a supercar or watch
- Buying properties abroad
- Emigrating to a new country
- Investing in foreign countries
How to Avoid High Fees When Exchanging Currencies?
The second but in most cases more expensive part of an international payment is the currency exchange. The high street banks often give their customers really poor exchange rates that may cost between 3% to 7% of the amount which is being transferred. Typically with banks only operating during working hours, in high value cases such as when buying a property or winning an auction, not being able to transact your currency order 24 hours a day can potentially leave you open to currency fluctuation and therefore you may end up paying a lot more than you planned to.
With Fintech platforms such as ours, they can help you save money when exchanging currencies and also assist with removing the risks faced from currency fluctuations. Some banks change their exchange rates once or twice a day and because of this they charge bigger spreads to mitigate their currency risk. On the other hand when you use fintech platforms like Mayfair FX you are able to obtain live exchange rates, book the rate you see and ensure your money transfer is done at the best possible exchange rate.
Here’s A Simple Example Of How You Can Save Money When Making International Payments At The Best Exchange Rates For You
Let us assume you are buying a summer villa in Spain for €200 000 and you have to complete the payment within 3 months.
If you use your high street bank you will typically have to pay £40 International transfer Fee and Currency Exchange Fees which may be up to 5% or €10 000. In addition the risk of the currency fluctuations within the 3 months could mean you may require more money to buy €200,000.
On the other hand, when you are using fintech platform like Mayfair FX you won’t pay any fee for the transaction, you will receive a better exchange rate and you have the ability to book forward contracts to hedge against future currency fluctuations.