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There are countless providers out there able to transfer your money overseas, but only a handful offer this crucial service as their core offering. OFX is a company that offers simple and secure international money transfers online. The company’s Head of Asia Pacific, Scott Redmond, says the process differs substantially depending on the institution used.
It can be a cumbersome space for banking providers, and this is often reflected in high fees, poor exchange rates and very little service. But companies that focus solely on money exchange usually offer competitive exchange rates and fees, a friendly online customer interface and supportive customer service, Redmond explains.
Established providers aren’t just focused on slick online experience at the lowest possible cost. Aside from expert knowledge, established providers have an arsenal of infrastructure including well established banking networks and customer service, he adds. “What this means is that the customer can access great rates and low fees, knowing that their money will arrive at its destination safely and securely,” Redmond says.
Of course, an essential part of international money transfer is the delivery of funds, Redmond explains. “If you think about it in terms of a delivery company, would you choose the cheapest option with little assurance about when the package will arrive, what condition it will be in or how the company will help if the package is lost?”
Melbourne energy efficiency company Shine On conducted an internal audit of systems and processes, uncovering a far higher cost for international money transfers than necessary a few years ago.
Managing director and founder James Johnson says his first priority was finding a provider with the best rates. A number of unexpected benefits followed. “I didn’t realise at the time, but the slow and restrictive payment system we used through our bank had been really slowing us down,” Johnson says. “Orders weren’t processed until payment had been received, and this sometimes took up to three days, slowing up production, delivery and then installation for our customers.
“Not only this, but we had to give confirmation by 2pm for exchanges on any given day, and this was just not always possible for our business.” Johnson says.
Switching to OFX offered greater flexibility, with payments turned around within 24 hours. Johnson estimates he has also saved more than AUD$80,000 on international money transfers since switching to OFX four years ago.
Redmond explains that customers can complete a lump sum transfer when timing is critical, however this requires them to be comfortable with where the market is trading and the value they receive from their provider.
Alternatively, customers can split the transfer amount into portions. “This works well for clients who have a modicum of time and are keen to take advantage of exchange rates at different times,” Redmond says. For example, a customer with a transfer requirement of AUD$50,000 can choose to break this up into parcels of $10,000 by booking in separate transfers at various points in time and exchange rates.
“In this scenario, the customer will end up with five transfers, and while there will invariably be a variety of exchange rates across these five transfers, the benefit is by not putting all your eggs in one basket, they end up with the dollar average of the exchange rates,” Redmond says. Whichever you choose, it’s important to note that there are few savants in the world of foreign exchange, so the likelihood of picking the top of a market subject to so many influences is slim.
“To this end, the customer needs to go back to first principles and consider whether they are receiving good value from their foreign exchange provider across exchange rates, fees and services,” he says.