Times are hard for any small to medium enterprise (SME) and are only going to get harder. The economy is stagnating and the cost of living crisis is hitting hard. Both consumers and businesses are well and truly feeling the squeeze. Most small to medium businesses operate on fairly tight margins anyway and are now looking for more and more ways to cut costs. As such, in this post, we shall explore how an SME can save money on business money transfers. We will look at the cheapest way to transfer money abroad and focus on the best money transfer services and the best business money transfers out there.
Read on to find out what is the best international money transfer service.
Business Money Transfer – An Overview
Many businesses only operate domestically. They have a store and an office in the US, they serve customers in the US and all of their suppliers are based in the US.
However, these days more and more businesses are beginning to operate internationally. Sure, we all know that Walmart, Coca-Cola, and Amazon have functions pretty much everywhere on earth but even small and medium businesses are rapidly establishing an international presence in order to take advantage of global trade whether it’s lower costs or fresh markets.
For example, boutique restaurants will regularly source their wine directly from the vineyards of Europe and web designers are able to offer their services to clients based anywhere on earth.
And any business that has transacted across borders will know too well the pains of sending or receiving money from abroad.
Is Using The Bank The Best Way to Transfer Money Abroad?
At first glance, it may well seem that using one’s bank is the best way to transfer money abroad. After all, banks around the world are connected by the SWIFT system (with the exceptions of sanctioned countries like Iran, Cuba, and now Russia). This means that if a business needs to send or receive money internationally, then their bank can facilitate this simply by calling their international payments department.
However, whenever the banks do handle an international transfer (whether sending or receiving) they charge a fee. These fees can range from fixed amounts to percentages of the value of the transfer. As well as charging the fee, the bank also gets to set the exchange rate and in all cases, will apply an exchange rate that is lower than the current, official forex rate and will ‘keep the difference’ as profit.
Finally, note that all banks involved in a given transaction will levy a fee. As such any Business sending money abroad may well find that their bank charges as much as 3% of the transaction in fees and exchange rates.
What Is The Cheapest Way to Transfer Money Abroad?
As we have seen, relying on banks to transfer money abroad is expensive. Thankfully though, there are much better options available.
Money transfer specialists are companies who (as you may have guessed..) specialize in international money transfers. They operate a lean and focused business model that allows them to offer faster, and cheaper international money transfer services than the banks.
Top 5 Money Transfer Services – Best Money Transfer Services For Business
Whilst there are now many different money transfer specialists out there, we have found that these 5 offer the best service, faster transfers, and lowest rates.
● Wise
Initially founded as Transferwise in London back in 2010, Wise has risen to become one of the fastest-growing and best-known transfer providers in the world. Opening a Wise account is fast and easy and their website and app interfaces are very intuitive to use.
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Wise’s transfer fees start at 0.35% making them almost 10 times cheaper than the banks. They also offer very competitive exchange rates and allow customers to open multi-currency accounts.
Wise is also now offering debit card services and credit services also the company has ruled out applying for a full UK banking license.
● Moneycorp
A subsidiary of the Bridgepoint group, Moneycorp is a multinational giant offering foreign exchange and global payment services to both individual and corporate customers.
Moneycorp offers its customers the opportunity to make exchanges in 33 currencies and make payments to over 190 countries without incurring bank transfer fees whatsoever. However, Moneycorp does apply a slight mark-up on forex rates which is how they make their profit.
● WorldFirst
Another London-based company, WorldFirst, has been offering forex and money transfer services for nearly 20 years now. They specialize in serving business customers with an emphasis on helping them pay offshore clients and in working with online traders.
Unusually, WorldFirst does sometimes levy payment fees ranging from around $2 – $20 depending on the type of payment being made. Their forex fees are however very competitive being capped at 0.75% of the transaction value.
● Currencies Direct
Originally founded in 1995, Currencies Direct is an established forex and money transfer specialists who have reinvented themselves and innovated their business models multiple times in order to remain relevant and competitive.
They are able to help their customers move 40+ currencies to over 120 countries (70 countries less than MoneyCorp can offer). Like some other providers on this list, they do not charge transfer fees but make their profit from currency exchanges.
As a proper forex specialist, Currencies Direct is able to offer forwarding service; they allow customers to buy currency in advance to take advantage of a good exchange rate and then store it in their account. Their app also offers real-time currency alerts notifying users of interesting developments in the rate of their chosen currency(ies).
● XE
The name XE is ubiquitous in the world of forex as its rate is often quoted as being the standard market rate. Founded in Ontario, Canada in 1933 XE has exchange kiosks in airports all over the world. You may well have changed money at an XE desk without even realizing it. They were also early advocates of the pre-paid, travel credit card which helped the travel industry move away from traveler’s cheques.
In terms of online and money transfer services, they can help send money to over 130+ countries and offer low fees and good rates.
Final Thoughts On The Best International Money Transfer Service
Whilst making a business money transfer is always going to incur fees, the good news is that these fees are getting lower and lower. Thanks to the best money transfer services that we introduced today, a business can save valuable dimes and dollars on forex and international transfers. If you are looking for the cheapest way to transfer money abroad for your business, check out the top 5 money transfer options listed in this post and choose which one, (or which ones) works for you. But above all just remember one thing, the best way to transfer money abroad is always to avoid the banks!
