As a country built on migrants, supporting family or friends abroad through regular payments is an everyday part of life for many people across Australia. Whether it’s helping with the mortgage payments or utility bills or simply just sending regular remittances to loved ones, FlashFX wants to make it as easy and affordable as possible to for families and friends who live in different countries.
To help you make the most informed decision about how best to make regular overseas payments check out our comprehensive guide.
It wasn’t that long ago that the only option for sending money overseas was through your bank. The good news for senders is that over the past few years options have multiplied, and the result has been declining costs. The wide variety of options make it complicated to choose the best money-transfer service. Remittance services are seemingly everywhere, from your bank to stand-alone storefront operations to online money transfer services. To help you sift through the noise, we’ve outlined a few different options.
Physical money transfer companies, such as Western Union or MoneyGram, are a common way to send money overseas. These companies specialise in facilitating cross-border cash pick-up and delivery. Be advised that these companies are almost always more expensive than using a provider who processes everything online. This is because these businesses charge higher fees and worse exchange rates to cover the overhead costs associated with running a physical store. If you don’t require the convenience of cash pick-up, you are better off transferring money through a dedicated online currency provider.
PayPal is another way you could send money to friends or family back home. But while it may be convenient, especially if the recipient has a PayPal account, the large transfer fees and uncompetitive exchange rates make this among the most expensive options. PayPal charges between 2.8% and 10.0% of your money for cross-border payments.
Another way to transfer money to family or friends overseas is through a bank-to-bank transfer. The high costs associated with using your bank, however, makes this a less desirable option. Banks, especially in Australia, are known to charge higher foreign transaction fees and exchange rate margins to than dedicated online money transfer companies. For example, banks charge up to 5.0% on the exchange rate, in addition to transaction fees.
Dedicated online money transfer businesses are an easy, affordable and safe way to make regular payments back home. These companies offer much better exchange rates than your local bank, plus lower transfer fees. FlashFX, for example, charges a flat 1.5% exchange rate margin and zero transaction fees. Once you’ve created an account you’ll need to fund it via a local bank transfer. Overseas transactions with online currency providers are usually quicker and cheaper than using your bank, but just as secure.
Before you go with any bank or foreign exchange provider you need to know what the real market exchange rate is. To find the market exchange rate simply type in the currency pair into Google, AUDUSD for example, and you will be presented with a number of links to sites that will show you the real market exchange rate. Bloomberg and Yahoo Finance are two good places where you can find this information. The market exchange rate will be your reference point for comparing the conversion rates offered by various money transfer companies.
Unless you are on a strict deadline, or absolutely require cash pick-up, avoid using a service that charges you transaction fees to send money overseas. FlashFX is an example of an online money transfer company that never charges customers transaction fees for cross-border transfers
Shopping around is the best way to ensure that you don’t overpay when transferring money overseas. Take the time to compare the currency conversion rates and transaction fees across different providers and then choose the one that’s the best value for you.
Whether it’s helping a child travel or study overseas or supporting a family member in other country through a large investment, there is a lot to think about when transferring big sums abroad. Different countries have varying laws around tax thresholds that may apply to sending larger sums. It’s critical to be aware of the appropriate tax laws for both countries before sending.
Look for special offers, such as introductory offers, that might help you save money on your transfer. Some companies waive any transaction fees for first-time users, whilst others offer special one-off exchange rates if you have been referred by a particular search engine or existing customer.