Want to send money abroad?
Be aware of these hidden charges
Year after year, thanks to the wonders of digitisation and technological breakthroughs, we live in a more accessible, borderless world. Yet, as we settle into a tight-knit multinational community, one of its most basic foundations — sending, spending, and getting money internationally – leaves us befuddled and frustrated. Remittances remain a tough notion for most people, despite the expanding number of solutions that have streamlined and simplified the procedure. Consumers wind up paying a lot in hidden fees/charges due to a lack of awareness and an inability to navigate “bank” smoothly.
Financial companies have the ability to demand exorbitant fees for currency conversions without expressly alerting customers. This is frequently in excess of 5% of the value of the transfer. To avoid incurring this expense, a consumer must first locate the official, mid-market exchange rate and compare it to the advertised rate provided by the transfer service before proceeding with the transaction.
You and your bank have no control over recipient fees. Consumers can be charged by some banks around the world for receiving funds from abroad, and these fees might vary from bank to bank and be difficult to reverse. In this scenario, the best course of action is to carefully consider your options and determine whether or not the person to whom you are sending money will be charged this fee. This saves you time and eliminates all middleman costs, leaving you to pay only the market-determined, fairly-priced commission.
At 6.5 per cent, the global average cost of a remittance remains exorbitant. That’s more than double the 3% target set by the United Nations as a Sustainable Development Goal. This is partly due to the hidden costs associated with banks’ and financial institutions’ remittance processes. The call for price transparency is being made on a global scale, but the first step toward accomplishing that goal on a larger scale is to be vigilant on a personal level.