Why you are paying too much to send money abroad
In a globalised world, why on earth should it be such a hassle to send money abroad?
Whether you’re a freelancer who regularly invoices international clients, or you’re simply an international citizen who needs to pay bills in another country…finances can be a hassle.
Misleading exchange rates and hidden fees can leave you with a lot less in your pocket than you thought– time after time.
"One day I was checking my expenses and saw a massive charge. I thought I'd been the victim of a crime," says international photographer Simon. "But it was just the charge my bank was imposing on me for using my card abroad."
It’s an all too common problem. An estimated 55 million people live abroad, and moving money along with you is a part of life. But doing so isn’t always easy
As Simon discovered, banks are not the way to go. You may assume that they'll give you a good deal - but banks often charge excessive fees, not to mention secret markups.
You can try looking up the exchange rate online, but that rate doesn’t necessarily correspond to the rate used by your bank - many banks show a misleading exchange rate that actually includes hidden fees, which go straight from your pocket to theirs. And if you’re regularly sending money abroad, those fees really add up.
And for businesses the problem is magnified.
“We’ve never used banks as their fees are exorbitant,” agrees Braden Yuill, founder and CEO of Virtual Coworker, an online recruitment service. The company provides outsourcing services that often require international payments to overseas staff– a process that can get pretty complicated.
While Paypal can be a workaround – the service is at least open about adding charges –users still have to put with a 2.5 percent currency conversion fee on top of the retail exchange rate, plus additional transactional fees... so you end up with less. (If all that sounds confusing, it’s because it is!)
Braden says his company tried multiple options for transferring money but ran into plenty of problems.
“We have used a few different providers and had a few different issues, including payments being sent to the wrong people.”
So what is the best way to pay for small business owners like Simon and Braden?
"Now I use TransferWise to move my money around the world," says Simon. "The app makes the whole process simple and fast. I wouldn't be without it."
TransferWise is a new kind of financial service created by two expats who were sick of unfair exchange rates and hidden fees. The service charges just 0.5 percent on most transfers - which means it's up to ten times cheaper than the average bank.
That obviously makes it a friendlier service for expats transferring small amounts regularly – but it’s also a blessing for small business owners.
“With over 250 staff, we were spending hours setting up individual payments each month,” Braden says. “Now our financial controller can make 250 payments in five minutes.”
How TransferWise can help your business
TransferWise has a service exclusively for businesses, which allows you to pay invoices, freelancers or get paid. It’s a borderless product, meaning businesses instantly have local accounts, can hold multiple currency accounts and all with top security.
Business owners can now choose to make a payout to an email address or a bank account, and payments can be made in as little as a single working day - in more than 500 currency routes, with real and fair exchange rates.
“Businesses can benefit by using TransferWise for both their national and international payments,” says Erik Johansson, Product Manager at TransferWise. “Our systems are faster and cheaper, but what really sets TransferWise apart is the fact that there are no extra fees, whereas normal banks add on all sorts of fees!”
As you would expect, it is fully regulated by the Financial Conduct Authority and protected against fraud and money laundering, so your money is safe with them.
Opening a TransferWise business account is simple: first, set up a standard account – get started by registering a personal profile here.
From there you can set up your business profile by adding company details on your settings page. TransferWise will walk you through a simple verification process (security is of utmost importance!) and soon enough you'll be on your way, able to send money on behalf of your business any time, any place.
If you need to make transfers for multiple business, just get in touch with TransferWise customer service and they’ll help you set that up, too.
“TransferWise has been a great solution,” Braden says. “It’s not just time we’re saving – we’re saving on costs and reducing the potential for human error.”
Photographer Simon agrees.
“I honestly consider TransferWise an essential for anyone who travels and needs to move money around.”
This article was produced by The Local Client Studio and sponsored by TransferWise.
This content was paid for by an advertiser and produced by The Local's Creative Studio.