My husband and I own a couple of small businesses that we started to ensure that we have more than one revenue stream and are never reliant on one income source. One of these ventures involves shipping and ordering from overseas.
That, in turn, involves making often substantial payments in different currencies.
In the past we have made all these payments using the same banks where we have our business accounts here in the local area where we live.
Through them we do a wire transfer of the money to the overseas banks used by the companies where we are buying the products, and our banks charge a fee of $45 for the service.
That would be a very reasonable fee to pay, if that was all there was to it.
That, in turn, involves making often substantial payments in different currencies.
In the past we have made all these payments using the same banks where we have our business accounts here in the local area where we live.
Through them we do a wire transfer of the money to the overseas banks used by the companies where we are buying the products, and our banks charge a fee of $45 for the service.
That would be a very reasonable fee to pay, if that was all there was to it.
But banks also make money on currency exchange rates. What that means is that when the official exchange rate (cost) to buy a foreign currency unit of money is, say, $1.13, the banks charge us a higher rate (price) and make money on the difference.
It is often just a small difference of a few cents.
But lately the difference between the official rates and what the banks charge has become astronomical, amounting to a difference of hundreds and even thousands of dollars for one transaction.
It is often just a small difference of a few cents.
But lately the difference between the official rates and what the banks charge has become astronomical, amounting to a difference of hundreds and even thousands of dollars for one transaction.
In the most recent product purchase and wire transfer we did, the bank charged us 72 cents more for each foreign unit than the official rate did.
That’s a profit margin that borders on the obscene. And it greatly affected our own profit margins.
So we did some research online and discovered that there are other options out there. We ended up opening an account with US Forex -- (now OFX), a company that specializes in international wire transfers in larger amounts of money.
They charge a base rate for the transfer, and no additional mark-ups in the actual exchange rate.
This amounts to huge savings for us. We could not be happier with that, or with the service we have experienced with the company so far.
And we actually appreciated the lengthy and very thorough application process they put us through to ensure that we are who we say we are.
There are other companies out there that offer similar services to fill different needs for those who need to use wire transfers.
Check out these articles to learn more about some of those options.
https://www.nerdwallet.com/blog/banking/best-ways-to-wire-money-internationally/
http://www.compareremit.com/money-transfer-guide/sending-money-overseas-banks-vs-service-providers/
The bottom line is that it pays to do your homework and use the internet to do some research.
It can save you major dollars.
That’s a profit margin that borders on the obscene. And it greatly affected our own profit margins.
So we did some research online and discovered that there are other options out there. We ended up opening an account with US Forex -- (now OFX), a company that specializes in international wire transfers in larger amounts of money.
They charge a base rate for the transfer, and no additional mark-ups in the actual exchange rate.
This amounts to huge savings for us. We could not be happier with that, or with the service we have experienced with the company so far.
And we actually appreciated the lengthy and very thorough application process they put us through to ensure that we are who we say we are.
There are other companies out there that offer similar services to fill different needs for those who need to use wire transfers.
Check out these articles to learn more about some of those options.
https://www.nerdwallet.com/blog/banking/best-ways-to-wire-money-internationally/
http://www.compareremit.com/money-transfer-guide/sending-money-overseas-banks-vs-service-providers/
The bottom line is that it pays to do your homework and use the internet to do some research.
It can save you major dollars.
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