Foreign exchange rates fluctuate every fraction of a second. Comparing rates based on a snapshot is not accurate. As a buyer of exchange rates, you should be weary of money transfer services that boast about rates (or some would call it “real” or “fair” rates). To get an accurate comparison, you need to analyze your Total Cost of Transaction (“TCT”). TCT consists of 3 components:
Exchange Rates – this is the most obvious factor in a FX transaction. But it must be considered together with the Service Fee because a good exchange rate may not gain you anything if service fees are high. Service Fees – here you should be aware of 2 common tricks used by money transfer companies.
Fees – some companies promise you $0 fees by making up for it through lower exchange rates. ”Low” Fees – other companies promise you low fees because you only send a small amount of money. But if you need to send a large amount, “low” fees can suddenly snowball to gigantic fees.
Assurance – this is the least obvious but could ultimately become your biggest cost and nightmare! Are you sure your funds will reach your payee on time as promised? Or did you experience delays due to various unknown issues? While such issues are not direct upfront costs usually considered by customers, delays in your transactions and your effort required to resolve the issues ultimately translate into dollar costs for you.
At moolahgo, we are your FX Partner. We would be happy to tailor a FX solution for you based on your needs. Get in touch with us today!