Money Transfer Types Explained
5 ways to make a money transfer.The world is getting smaller financially, and with more business deals between the West and the East, the cost of making a money transfer is becoming more important to all, including small start-up importers, large established concerns, and even travellers who need more spending money transferred to a local account.
The problem is the cost of the money transfer. On small amounts, the charge made by a high street bank, to make a money transfer, can almost wipe out the amount being sent. This is especially true when you add on the charge made by the receiving bank.
To put it bluntly, if you are making a regular money transfer abroad, you need to seek out less expensive ways to do it. Commonly, a British Bank will charge over 30 GB Pounds just to initiate the transfer, then they take a large slice of your cash with an expensive foreign exchange rate. Then… the bank at the receiving end makes a charge as well!
Global Currency Exchange Network, a specialist foreign exchange brokerage, can limit these expenses greatly by not charging for the money transfer, giving a more competitive exchange rate, and in some cases, arranging with the bank overseas to waive their recipient charges.
There are various different ways to make a money transfer, here are a few:
SWIFT
This is the most common method of money transfer. Your local bank is likely to charge you anything from 12-35 GBP. Add on the foreign exchange commission and the possible charge at the destination bank. This normally takes working days but you can request an urgent SWIFT transfer, for an extra cost. It reduces the time for the money transfer to between 3 and 5 working days.
Euro CHAPS.
This is a method used to make the money transfer to select European Countries for around 25 GBP, plus the foreign exchange commission. This normally takes between 2 and 3 working days. Charges can also include the (by now familiar) receiving charges as well.
TIPANET
Unless you ask for this, most banks won´t offer it. Tipanet is a system where, for a small charge (around 10 GBP), plus the foreign exchange commission, you can make a money transfer to 6 countries. There are limits to the amounts you can send though and it usually takes 5 working days. The receiving bank may charge you for receiving funds.
Online Payment Services
By now you´ve probably heard of most of these.. PayPal MoneyBookers etc. These are now well established online banks and they offer various online payment options. Moneybookers, claim that you just need the email address of the recipient in order to make a no-commission transfer, which will cost no more than 0.50. However these sytems are mostly used to make very small payments as most people prefer to deal with a business that is accountable when transferring larger sums of money.
Paypal and Neteller are better known services. If you open an account with them, you can send money within minutes to other account holders. You may pay no fees for the transfer, but you pay a fee on the foreign exchange rate. Paypal, for example, charges 2.5%. Also, the recipient often has to pay a fee as well. the exchange rates can be uncompetitive at times.
Foreign currency brokerage specialists
These businesses are perfect for anything from making regular overseas pension transfers, right through to transfers in the millions. They offer a highly peronal service and a good broker can become an integral part of any business which regularly imports or exports. Some brokerage specialists, such as Global Currency Exchange Network offer a commission free service.
They also make the transfers for free. And, in some cases, they can pre-arrange for the receiving bank to waive their recipient fee. While this is useful for larger amounts being transferred, the regular money transfers for transactions like pensions and mortgage payments, can be almost wiped out by the charges that banks made.
Couple this with the speed of the transfer, usually 2 working days from receipt of cleared funds, it´s difficult to understand why someone would use their local bank.
