Transferring money across the globe can now be done for less!

If you’ve ever had to exchange currency in a bank you know that this can be quite expensive. However, it doesn’t have to be this way. Today, there are services, called money transfer companies, that make foreign currency exchange (FX or forex) affordable. Moreover, they allow you to transfer money to almost any country in the world without exorbitant fees. All in all, you can save up to 13% of the transfer amount by using one of these FX companies.

Online money transfer companies are rather versatile and the majority of them are available in Malaysia. Therefore, you should be able to find a provider that meets your needs perfectly. Note that accounts with these companies come with no obligations. This means that you can have several of them and use them as necessary.

How Do Money Transfer Companies Work?

Unlike banks, money transfer companies do not really “move” any money when making cross-border transfers. Instead, they usually use a simple scheme.

  1. The customer transfers money to the company’s account in their own country.
    Usually, you will be able to do this using debit and credit cards as well as common domestic transfer services.
  2. The company transfers an equivalent amount to the recipient from their account in the recipient’s country.
    To calculate the equivalent amount the company will need to convert the currencies. However, an important advantage of money transfer companies is that they use lower FX rates than banks. That’s because they have low FX margins they add to the mid-market rate.

This is it. It really is that simple. And because it’s simple, transfer costs are minimal. FX companies usually charge no fees at all or keep them very low. That’s because for them the volume of transfers they process is more important than the amount they can make off every individual transaction.

Note that while all money transfer companies offer cheaper transfers, each of them is unique. Some of these focus on FX services for traders and others have a better offering for corporate clients. Therefore, you should compare not only the rates and fees of FX companies but also their specialties. For example, Currencies Direct is good for business transfers and investors while WorldFirst is an excellent choice for e-commerce.

You also need to know that a few money transfer companies today use a fixed FX margin. This means that their FX rates are even lower than their competitors overall. But, the best terms for those transfers usually come with some additional requirements.

Top Money Transfer Companies Worldwide in 2020

Currencies Direct

Currencies Direct (UK based) is a money transfer company that’s best for, pretty much, everything. Being a UK company originally, it’s regulated by the Financial Conduct Authority (FCA). Therefore, you can be sure that the company is 100% trustworthy. It’s also completely transparent about its fees and rates. The latter isn’t too hard because Currencies Direct doesn’t charge any fees at all.

The company has won multiple awards and its available nearly everywhere, save for a few US states. The company has 22 offices and offers advice and guidance on top of forex and money transfer services. It also provides expertise for property investors and those who want to make the most of FX trading.

This particular company is renowned for its affordability, wide reach, but most of all its customer service. Customer support is multilingual and excellent. The company has a very high (4.8 out of 5) client satisfaction rate.

Note that the minimum transfer with Currencies Direct is $100.

XE Money Transfer

XE (Canadian company) is a money transfer company that belongs to Euronet Worldwide. It’s a giant in the financial world and it is also owned HiFX Money Transfer. Now, the two companies have merged under the XE brand. The result is a regulated and trustworthy money transfer provider that supports 60 currencies. The original company has been around since 1993 and it has maintained a high standard of customer service.

The most important thing to note about this company is that XE has no minimum transfer. Moreover, it has no fees. It uses slightly higher FX margins compared to some other forex companies. However, the rate goes down for bigger transfers.

WorldFirst

WorldFirst used to be a UK-based company and in a way it still is. However, it was purchased by Ant Financial, which has been making a lot of waves in the global financial market. Its affiliation with Alibaba definitely is the main reason why WorldFirst has the biggest service offering for online sellers. It is regulated by the FCA as well as by relevant authorities in Canada, Australia, Hong Kong, and Singapore.

After its change in ownership, WorldFirst started using fixed FX margin rates. Therefore, it now offers the cheapest transfers. It’s a particularly good choice for corporate clients and everyone who needs to make large international transfers regularly. The lowest margin is 0.15% and the highest is 0.5%.

However, the minimum WorldFirst transfer is £1,000. There are no fees and as long as you transfer over the minimum amount; it’s truly impossible to find a better offer in this industry today.

How Much Money Can You Save Using Money Transfer Companies?

The exact amount of savings you make on an international money transfer will depend on many factors. The most important among them is the currency pair you are going to use. Malaysian businesses and expats deal with almost every country out there and the majority of money transfer companies cover Malaysia. Therefore, you will have no issues on this side. However, if you need to send money to some remote developing country or use an exotic currency, they might not be covered by FX companies.

In these cases, transfers will be expensive. Bank costs range from 2% of the transfer amount all the way up to 20% for transfers to sub-Saharan Africa. Even using popular currency corridors, bank transfers or services like PayPal will charge you 1.5-4%.

Money transfer companies, on the other hand, usually cost about 0.75-1.5%. Even if in your particular case the difference isn’t all that big, you shouldn’t forget that every coin you can save is better used in your emergency fund. Therefore, if you have an option to save, you definitely should take it.

 

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