4 questions you should ask your foreign exchange provider
There are some decisions in life that you just can’t take a gamble on, and when it comes to foreign exchange services, choosing a provider to send your money overseas is one of them.
Given there's at least 13 international money transfer providers regulated by ASIC, offering a range of rates and features, it makes sense to do your due diligence and ask the right questions.
So why not put them in the hotseat before going ahead with your transfer, with these four quick queries...
Question 1: “What is your exchange rate?”
Make no mistake, the best way to save money on FX transfers is by nabbing the highest exchange rate possible, as it will stretch your dollars the furthest and mean more gets deposited into the bank account of your choice overseas.
Scenario: Say you’re looking to send $2,000 cash to a family member in India who’s getting married as a gift. Here are two ways* the transfer could play out...
b) But opting for a big four bank offering a lower exchange rate instead would only give* your friend ₹93,337 (that’s ₹6,018 less!).
*Based on Mozo data calculations at the time of writing
Question 2: “Do you charge transfer fees?”
The next big question on your lips should be how much each transfer will set you back on top of what you plan to send. While the good news is that fees are generally minimal (if the provider charges them at all), it isn’t always that clear cut. Foreign exchange providers who say they charge zero fees may find other ways to profit from you such as:
- Applying higher margins (aka setting less competitive rates)
- Deducting a percentage from the total amount that you’re sending (sometimes called a commission)
Question 3: “What is your minimum and maximum transfer limit?”
Time is precious, which is why you want to avoid coming to the end of an online form only to realise that it was all in vain! So know the nitty gritty details of the provider before committing to a service, especially when it comes to transfer minimums and limits. Here at Mozo we’ve noticed that some of the providers offering competitive rates have high minimums (sometimes $10,000), while others are not ideal for high transfers because it’s more expensive to make large transfers.
Question 4: How long do your transfers take?
Are you in a rush? Because if you are, you should probably ask your provider how long they’d take to send your Aussie dollars overseas. As a rule of thumb the turnaround should be 1 - 3 days, although you may have the option to fast-track it for a fee.
Note: The bad news is that international money transfer providers can’t control what happens to your funds once they land in your recipient’s bank account, so if the bank is slow to process the transfer their hands are tied.
Ready to choose an international money transfer provider to send money overseas? Kick off your online comparison at our hub.