The international money transfer industry has been booming in recent years. There are dozens of different currency providers joining the market each year offering an array of services. It has particularly shot up in popularity ever since innovative, cheeky, and exciting Branson-funded Transferwise (as seen on TV) officially entered the market circa 2012.
What makes both private and corporate clients use currency service providers?
The truth is that the main reason for the increasing popularity of the money transfer business lies in awareness. It‘s not that the need for exchanging currency or sending it abroad has substantially picked up in the last few years, it‘s the mere fact more and more clients are aware of the exorbitant fees they are paying banks to transfer money abroad, as well as corporate clients aware of the importance of foreign currency management for retail.
Unlike banks, specialised international money transfer companies are offering the following values to prospective clients:
- No wire fees
- Wholesale rates with lower margins than banks
- Easy to understand online system
- Step-by-step telephone support
More sophisticated clients, both privates and corporations, also use the following:
- Direct access to trader on transfers above £5,000 normally – free guidance
- Batch transfers enabled online
- Receive funds from abroad (including checks and e-checks)
- Access to hedging tools – Forwards and Options
It‘s also important to state that online seller get ever bigger benefits as Amazon charges a flat 3.5% fee on all currency exchanges. Here are alternatives currency providers for Amazon sellers.
How does it work?
Using a foreign exchange provider rather than your bank requires funding the transfer before it goes through. You can do so by a debit card (smaller transfers) or move the funds to a segregated bank account (domestically).
This in a way requires a leap of faith, that the company whom you are dealing with won‘t just run away with your money. Here are our top 10 tips on finding a proper money transfer companies, provided by MoneyTransferComparison.com, a leader in this field which has professionally review the best companies in this field.
Best currency providers – how to find them:
- Make sure the provider is authorised by the FCA. Not just registered with them, but approved by them as an e-money provider or a payment institution.
- Double check the account you are paying money into is segregated (and if the company goes bust, you can retrieve your funds from there). Your currency provider can send you all the necessary paperwork.
- Make sure the bank the company is using is one of the large, well-known, UK headquartered banks and not some unknown online bank or even worse, a bank abroad which is not regulated locally.
- Make your research about the company to see it has been running for a few years already.
- Make your research on client reviews – are clients happy with their experiences?
- Check the company‘s website and check how honest and transparent it seems about who this company is, who owns it and manages it, and how it makes money.
- Make sure the provider handles the currencies you require. Sometimes it may require registering with it.
- Make sure the provider can offer the type of service you require. Does it have an online platform? Does it offer FX hedging tools? Do you get access to a professional currency dealer?
- Go with your hunches. Even if everything checks out, something could be wrong. Trust yourself, and know that there are hundreds of other providers you could use instead. Don‘t insist on a company that gave you a bad vibe.
- Read the reviews over at MoneyTransferComparison.com who already inspected all the above and much more.
We hope this brief overview helped you understand a bit more of the industry, how it operates, and how to choose the right money transfer company for your needs.
*This feature was brought to you by FinoFin
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