With FinTech technology rapidly expanding the Internet is full of up-and-coming FinTech companies each offering the latest technology and state-of-the-art systems.
This dynamic surge in FinTech is having an impact on the banking industry and resulting in multiple banking options for customers.
Let’s take a look at the changes that have occurred to international transfers and what the future holds for transfers in international business.
International businesses make transactions in multiple countries across the globe, dealing with umpteen suppliers, outsourced and offshore employees and need to manage multiple payment accounts – e-wallets, crypto accounts, banks and FinTech accounts. One of the essential features of these accounts is the ability to make cheap international money transfer in multiple currencies.
In today’s financial world there are a large number of companies specializing in money transfers. These companies offer businesses a choice of how to make and receive payments.
Generally speaking there are three methods of receiving and making payments:
Online Transfers and Currency Exchange via a FinTech Company
In order to use online FinTech companies to make your transfers you need to open an account with the FinTech company in the same way as you would open a conventional bank account. However these are not traditional banks, they are Electronic Money Institutions offering banking infrastructure with mobile banking, improved user-interface and lower fees than banks.
Bank transfers are the most widely accepted method of making international payments and receiving funds. This method is considered secure, problem-free and recognized across the globe. The only requirements are that you hold a bank account; pay relatively high fees and are willing to use exchange rates that often mask hidden costs. For businesses which deal in multiple currencies this can be problematic especially if you need to send and receive USD while out of the United States.
E-wallets include companies like Skrill and PayPal which have their own account networks across the globe and can issue electronic money. Using the well-known established e-wallet companies is very safe, there is a user-friendly interface and transfers can be recalled or canceled easily. However e-wallet services are usually expensive with high fees, transfer charges and unfavorable exchange rates and fees.
How to Lower your Money Transfer Costs
Compare exchange rates. Don’t rely on the exchange rate given by the transfer companies which often include hidden costs in the exchange rate.
Make larger money transfers.Often there will be a lower transfer fee or even no fee when the sum of money being sent is large. Over a certain amount the transfer fee is waived. Examine the fee model – is it a percentage of the transfer amount or is it a fixed fee?
Compare your options. You can save the most by shopping around for the transfer method that offers you the best rates, fees and efficiency. Examine the benefits and downfalls of each money transfer method before committing. When you have narrowed down the companies that interest you start asking specific questions regarding their fees.
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