7 major mistakes in international money transfers

Whether you are sending money to a family that lives abroad or you are an online business owner who needs to pay overseas suppliers; Russians, Belarusians, Ukrainians and other residents of the CIS are no strangers to international money transfers.

But with 2.4 million CIS residents sending money abroad every year, and a fifth sending more than $2,000 a year, according to a 2016 study, are we getting the most bang for our buck?

So, how can you avoid common international money transfer mistakes to get the most out of sending money abroad?

1. Make sure you have the correct details for the recipient (and enter them correctly)

Providing incorrect account details when sending money can be costly. According to the Australian Securities and Investments Commission (ASIC), 83% of transaction errors occur when people enter the wrong bank account details (usually the BSB or account number) of their recipient. Transaction errors can also occur if you choose the wrong recipient or the recipient provided you with incorrect account information.

In order to send an international money transfer, you need to make sure that you have provided the following correctly:

• recipient's full name, account name and home address
• currency you want to exchange
• beneficiary's bank account (this can be IBAN - international bank account number)
• SWIFT code or bank identification code (BIC) of the beneficiary's bank.

You should always double check the details before allowing a transfer because it can be difficult for your money transfer provider to trace and return funds if they are sent to the wrong person. If you notice that you have made a mistake, be sure to notify your bank or transfer service provider as soon as possible, as a small procedure may be required to withdraw your funds if you leave them too late.

For example, Commonwealth Bank will refund your money if you report a money transfer error within ten business days - as long as your funds are still in the recipient's account and the error was genuine. However, if you report the error after ten business days, the Commonwealth Bank refund process may be longer or more complicated.

While return times and processes may vary between banks or transfer providers, it's always important to make sure you have the correct details in the first place and contact the recipient to make sure they've received the transfer.

2. Pay attention to exchange rates.

Exchange rates can change rapidly depending on market conditions, and transfer fees can (and accumulate) without your knowledge - here's why it's important:

• keep an eye on exchange rates
• compare money transfer providers to find out competitive rates for your budget
• read the fine print of your money order
• transfer your money at the best time (according to the market movement) to get the best possible rate.

The amount your money is converted into is determined by the strength of the exchange rate on the day of the transfer. For example, if you are transferring money to a family in the UK and the exchange rate fluctuates slightly from day to day, even a 0.1 difference in exchange rates can affect what your money is converted into, as shown in the example below.

In addition, the exchange rate offered by the money transfer provider or the bank may be raised slightly for a small profit. It's also worth noting that rates shown in news or Google searches may bewholesale (price charged by banks for wholesale international transactions) orinterbank rate (rate charged between banks).

When you compare international money transfers, you should always check the exchange rate at the time of the transaction to make sure it is the one you expected.

3. Beware of fees (some of them are hidden).

When making an international money transfer, the service provider usually charges a fixed upfront fee to process your transfer; this is commonly referred to as a transaction, service or transfer fee.

However, there are other fees that may apply later on your international money transfer, including:

• commissions of an intermediary bank or third parties.These fees are charged by any temporary banks that are used to transfer your money to another country. Keep in mind that these intermediary bank fees are not related to the money transfer service you choose, but are related to your recipient's bank to transfer funds to the recipient's bank account.
• receiving fees.These are account fees charged by the recipient's bank or financial institution and may include administrative and shipping fees for processing a transaction.
• commissions for conversion / exchange.When converting one currency to another, an exchange fee is charged. This fee may be paid upfront or may be deducted from the transferred funds if an overseas bank needs to exchange it for local currency.

The good news is that not all money transfer providers charge a fee, or some may waive it in certain cases (for example, when you transfer more than a certain amount). However, it is important to know what fees you will need to pay and how they can affect the final amount that will be delivered to your recipient.

4. Exchange currency before transfer.

If you exchange your Australian dollars for local currencyfront sending money abroad, you can take advantage of the exchange rate offered on that day.

For example, if you send1000 Australian dollars in the USA on Monday at the exchange rate0,71909 and exchange them on the same day, the recipientwill receive $719.09 .

If younot convert your money right away, this exchange rate may change before it reaches your recipient. This means that the final amount received by your recipient may be less than what you planned.

So if the initial exchange rate0,71909 will fall to. 6 1909 by the time your money reaches the recipient, the recipient can receive approximatelyfor 100 dollarsless, than they would get if you immediately exchanged the currency for US dollars (on your side).

Currency exchange on your first money transfer is definitely worth considering if the amount you need to send isn't as flexible as a business payment, or you need to send a specific amount to someone overseas.

5. Check the estimated delivery time to avoid transfer delay.

If you need to send money abroad by a specific time - either for a business transaction or for a family living abroad - it is important to check how long it takes to send your money with each provider and transfer method (for example, international online money transfer or money order), and arrange the transfer well in advance to avoid the risk of a delay in the delivery of money.

International money transfers from Australia usually take one to five business days. However, the actual delivery time may vary depending on a number of factors such as:

• money transfer service provider
• if the money has to go through any intermediary banks (which may hold it up or incur a conversion fee)
• payment method you are using
• what currency your money is exchanged into (exotic "non-major" currencies may take longer, such as the Turkish lira or the South African rand)
• difference in time zones
• delays on weekends, public holidays, or public holidays (such as the Christmas period)
• bank or currency shutdown time.

Some providers may offer same-day money transfers; however, instant international transfers will usually cost you more as the provider will charge higher fees and may offer a less attractive exchange rate – and depending on which country you are sending money to, it may take more than a day. translate.

6. Transfer large amounts less often.

If you make regular or frequent payments, plan your international money transfers carefully, as each transfer will come with a transaction fee. Thus, making several small transfers may end up costing you more - which is why it would be more profitable to transfer a large amount if possible. For example, if you are paying an overseas supplier, consider making larger monthly transfers instead of weekly payments.

Also, if you are transferring a large amount, the transfer company may be able to offer you a better exchange rate, which can make a difference for a large amount of money. However, you should always check the transfer limit with your provider, as some may set a minimum or maximum transfer amount.

7. Find a better money transfer deal.

While it may be convenient to transfer funds through your bank to a foreign recipient, you may not get the best exchange rate and fees. Before transferring funds abroad, it's important to compare money transfer services to find the deal that works best for your destination and budget.

One of the easiest ways to find a great deal (and potentially save money) is to compare international money transfers in seconds with our handy comparison tool. Our free service allows you to compare transaction fees, transfer times and exchange rates.

What's more, we provide an estimate of how much your recipient may receive after applying these exchange rates and fees. However, it's important to get tired of the additional external fees that may still apply and confirm all final rates and amounts at the time of the transaction to make sure it's exactly what you expected.