There are more options than ever to exchange and send money, especially in terms of international transfers and thanks to the development of new technologies. But the fact that there are more possibilities does not mean that it is an easy process, especially if you want to achieve the best conditions and avoid paying too many commissions. There are several options to consider before choosing how to send money. What commission do they charge? How long does the international transfer take to arrive? What is the cheapest way to send money online? It is safe?
First of all, it must be taken into account that there are two main types of transfers: SWIFT and SEPA. The first (Society for World Interbank Financial Telecommunication) are transfers made through the SWIFT interbank system, which is the oldest of the two and the most widespread, as it has thousands of member banks.
For its part, the SEPA or Single Euro Payments Area emerged in 2008 as an EU initiative to facilitate the movement of money between the different member countries, so transfers have the same conditions as if they were made within the country. , provided that the amount is less than 50,000 euros. The only problem is that it is only available in the EU.
What are the fees for international transfers?
One of the most important reasons to select a transfer method is the cost and the derived commissions. The problem is that it is not easy to discover the real price of a money transfer, since many of the costs are hidden. Even when they are advertised as “without commissions”, free or 0%, they include some cost for the user. Fees for transferring money can be very variable, from commission percentages on the amount you want to send, to free transfers in the case of some banks when it comes to SEPA transfers.
But in this case there is another type of commission, related to the exchange rate, which occurs when making transfers between different currencies. The currencies do not have the same value, so to convert an amount between different currencies you have to go to the exchange rate. The exchange rate is expressed between two different currencies, such as euro/dollar, euro/pound, euro/yen… and represents the value of the first against the second. For example, that the euro/dollar is at 1.06 means that for 1 euro you get 1.06 dollars. This exchange rate is set by the market and is the so-called real exchange rate, the one that appears if you search on internet converters, such as the one included by Google itself.
But that does not mean that this is the exchange rate that your bank will apply. It is not uncommon for banks to vary that official exchange rate in their favor and apply a change that favors them, although that is something that they do not usually publish when advertising rates or fees for international transfers. On many occasions, what is
usually hidden under “no commission” transfers is this exchange rate that harms the client by using a worse exchange rate than the one indicated by the market. An exchange rate with a premium that can add up to a lot of money in the case of making large transfers. In these cases, operators such as Transferwise offer a real and easy to follow exchange rate so that you do not have to read any fine print and have everything clear.
Finally, it must be taken into account that to all this we can add the expenses that the recipient may incur for SWIFT transfers received from abroad. Sometimes it is free, but in others, entities charge amounts that may represent a percentage of the amount received or a minimum of between 15 and 25 euros without taking into account the amount transferred.
This situation can make payments more expensive, especially when it comes to sending large amounts or regular transfers.
The cheapest way to make international transfers
New technologies have also led to the appearance of other alternatives, whose operation differs from that of traditional banks and other providers, and which do not charge commissions in addition to taking a margin on the exchange rate. One of the options available is TransferWise, a platform that applies the mid-market exchange rate, also known as the real exchange rate. In addition, it charges a single commission, notified in advance, which causes the costs to be much lower. In this way the user can get more out of the money he sends.
The website itself offers a price comparator that allows you to calculate the exchange rate applied to transfers in real time.
How long does an international transfer take?
The delivery times of an international transfer are not mathematical, but depend on numerous options, such as the method used to send money, the monetary route or the amount being sent.
In this case, TransferWise, on key routes such as the one between the UK and Europe, is able to deliver most payments within 24 hours, if not less.
How to make an international transfer
Once the name of the recipient and the country of their bank account have been obtained, a more specific identifier is needed: it is the BIC code or the SWIFT code, an identifier for financial institutions and banks. It consists of a number of 11 characters, although sometimes it may have only eight.
In addition to the BIC/SWIFT code, which identifies the bank, another is necessary to indicate the specific bank account of the recipient to which the money is to be transferred. Although it is not used in countries like the United States or New Zealand, the IBAN code is very widespread in the case of European countries and many other countries in the world. Although the Customer Account Code was used in Spain until 2014, it was replaced by the IBAN as part of the integration into the Single Euro Payment Area. In this international standard, all bank accounts have an IBAN code of up to 34 characters that identifies them to other entities in the world.
Once all these data are known, the client is ready to make a transfer. You can go to a bank and ask the staff to make an international transfer. Most banks also offer the option of making transfers through their telephone line, their ATMs and especially through the Internet, where the required data will be requested to make the transfer without leaving home.
It is important to check the data carefully because in the event that they are incorrect, the transfer could be returned and we would have to pay a commission for said concept.
In the case of TransferWise it is simpler. It is enough to create a transfer, entering the bank details of the destination person; create a profile, which is a free process, and send the money to the platform, by bank transfer or card.
Is it safe to send money abroad?
There are still many people who are afraid of putting their data on the internet, sending money online or even buying on the web. People who bet on making transfers from their bank, thinking that it is the safest option.
But TransferWise, thanks to the type of service it offers, is regulated like a bank and is recognized around the world. Trusted by more than three million customers, this platform uses trusted bank accounts and financial partners to transfer money and keeps customer money in accounts other than operational accounts. All transactions are protected by standard HTTPS encryption, which keeps information safe.
People continue to use their banks to send money abroad, but in recent times new options have emerged on the market that are giving them competition.
This is the case of TransferWise, which has the price, security and speed of transfers as its main strengths to be able to compete in this market.
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