We might want to send money abroad for many reasons. Perhaps we want to help out relatives living overseas financially, or friends on holiday who have found themselves in a tight spot and need a little financial help to get home? Often it’s because we want to purchase something from another country. Whatever the reason, international payments are rarely as simple as sending money domestically.
Firstly, funds sent internationally will be affected by fluctuations in the currency markets, which can be caused by everything from political unrest to statistical data on economic factors such as employment and the country’s current GDP.
It’s always wise to ensure you’re protected from currency volatility when sending money abroad. Is it possible to do this quickly and safely using online providers? Thankfully yes, but let’s take a look at the basics first.
Sending money abroad
Fees for transferring money from one country to another are unavoidable, sadly. The key is finding the option that represents the best value for you depending on how much you’re sending and to where.
Typically you will send your money abroad via either a bank transfer or a remittance currency specialist. The fees and the amount of time it will take to send your money via these methods will depend on your provider and where you’re sending the money.
Different countries have different regulations to comply with and compliance fees can make up a significant percentage of the transfer and service fees that are passed onto the customer. Then there is also the exchange rate to factor into the equation.
While it might be tempting to head for the high street bank you’ve been with for years, they are unlikely to offer you the best exchange rates and often charge high fees as international remittance is just one of the many services they provide.
This might be more convenient if you are only sending small sums on a semi-regular basis, but if you are regularly sending large sums of money abroad, you should seriously consider approaching an international payments specialist.
A specialist that fully understands the money transfer market will be able to talk you through all of your options. For example, they might offer you a spot contract, which will exchange your money at the current exchange rate, essentially locking you in at the current price. This is particularly handy if you regularly send money to India, Nigeria or other countries with traditionally unstable economies.
You might even be able to take a currency forward contract, which locks in that rate for up to two years. If the exchange rate is currently quite favourable then you could end up saving yourself a small fortune in exchange fees this way, though it will often require a deposit. If you’re planning on moving abroad yourself, this is an ideal way to lay down a nest egg for yourself.
How to send money online
While sending large sums of money online might once have seemed quite a risky venture it’s never been safer today thanks to leading encryption technology. Online money transfer is comfortably the fastest option too and it doesn’t even matter if you’re sending it from a completely different time zone.
Online platforms offer 24/7 access as well as a full account of all transactions, meaning you’ll have a complete record of all your transfers either on a safe online portal or through a smartphone app (depending on the provider). There’s also the option to make repeat transfers automatically so you can set up a transfer like a direct debit every week or month.
It’s a fully featured, holistic solution that has revolutionised the way people send money abroad.
We can help
If you’re interested in finding out more about sending money online internationally, or any other aspect of your business finances, then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments.