Usual international transfer fees that can cost you greatly
International transfers, or international wire transfers, are a method wherein funds are transferred from a bank in one country to another bank in a different company.
In spite of the rise in popularity of online payment options such as PayPal and Paxum in recent years, international transfers are still popular amongst some people. This is mainly because the fastest way to move money from one country to another, in a secure fashion, is to use an international wire transfer. fact, many companies still rely on international transfers in order to conduct their business.
However, the main caveat when it comes to international transfers is simple: transactions can get expensive. Very expensive. The reason for why that is, is due to the cost of fees tied to making a transfer. In fact, what most people are not aware of is that there are also hidden fees that are not directly stated to you by the bank. Be smart when making a transfer overseas; here’s the list of fees you have to watch out for when making an international transfer.
Every money transfer service will charge a service fee for each transaction. Depending on the service, they may charge for a flat amount, or for a small percentage of the amount to be sent (usually around 3-5%, but can be even more). The more money to be sent, the higher the fees. Another thing to keep in mind, some banks offer same-day transfers, and may charge another fee if you avail for this service, the price being potentially as high as 10%.
Markup Foreign Exchange Conversion
Foreign exchange conversion contributes to a large chunk of an international transfer fee. While not the same thing, it is closely connected to the interbank exchange rate; this is because banks use different rates when it comes to buying and selling currency, all for the sake of making a profit. What happens as a result is that a customer ends up paying for a currency conversion on top of the interbank rate. These fees are usually hidden and not elaborated on by the bank.
Wire transfers make use of the Society for Worldwide Interbank Financial Telecommunications system, or SWIFT for short. Swift is a messaging network that banks use for most international transfers. There are extra costs for both senders and receivers who use SWIFT services - which could be charged through larger banks - such as a transfer and recipient fee, as well as a tracing fee for those who choose to track their money during the transaction.
Intermediary bank fees
When transferring money internationally, your money doesn’t simply get sent between point A and point B. Every international transfer goes through one or more intermediate banks before reaching the destination bank. In doing so, these banks charge for a flat “cut” for their assistance.
While international transfers are great for swift movement of money from one country to another, the costs that may accrue for every transaction can cost you an arm and a leg if you are not careful. Pay attention to these exorbitant fees, and you might dodge a bullet and keep your wallet a little heavier than it would have been.