When expanding a business internationally there are 101 things to think about. Organising finances can often be the most confusing and stressful of these. With countless big banks and transfer providers to choose from, it’s hard to make sure you’re getting the best deal.
Generally speaking, banks tend to have a steep margin on money transfers. For example, ANZ and Westpac offer rates which are 4-5% worse than the real interbank rate. Based on data from MoneyTransferComparison.com, that means a person sending $100,000 abroad could save an amount of $4,700 by sidestepping these banks and using a foreign exchange provider.
Fortunately, there are a range of foreign exchange providers who offer very competitive rates. The questions is, how do you know if your provider is best for your business?
Is your provider offering you the best deal?
If you’re expecting to pay nothing at all for your international transfer, it is not going to happen. The question is, how much you will pay in proportion to the amount you are transferring or receiving from abroad. If you are second guessing your own bank or transfer provider, MoneyTransferComparison.com offers an online calculator that can show you if you’re paying above or below average fees.
This tool can save you hours of tedious online searching and comparing you would otherwise have to do yourself. Simply put in the date, amount and the currencies of your last international transfer and in a matter of seconds the calculator will show you results. The calculator utilises comprehensive data collected from referrals to money transfer providers from MoneyTransferComparison.com, to uncover whether your provider is offering you a good deal or not.
What to do if your results disappoint?
Change transfer providers! This sounds simple enough, however the question remains: how do you find the best provider for your business?
Editor of MoneyTransferComparison.com, Matt Di Vincere offers 5 tips to Aussies looking to choose a money transfer provider.
Choose a provider that has Australian bank accounts.
Some UK brokerages are happy to take on Australian clients but since they don’t have domestic bank accounts you have to pay a wire fee to your bank just to fund the transfer.
Choose one of the large providers
Money is about trust and service just as much as price. When companies have similar pricing schemes, go with the one you’d be happy using as a business partner for years to come.
Shop around before you buy
With most brokers, it is possible to negotiate the rates. Register with several providers and ask for a quote at the same time to find the cheapest one of the bunch (while sticking to the good, respectable, companies).
Be careful to check each and every transfer for the rate you’re getting
It’s a common marketing stunt to give absolutely amazing rates on the first trade and then hike the price on the next transfers.
Consider locking in rates
If you have a transfer in several months you can lock the rate using a Forward contract. It is not always the best course of action but something to consider especially if rates are particularly volatile or expected to be.
As SMEs look to expand internationally, it’s important they get into good money transfer habits early. Otherwise, as they grow and transfers become larger or more frequent, they’ll be losing valuable income.