Everything you need to know about sending an international money transfer for your business.Modern business is conducted in a global marketplace, so no matter what industry you work in, finding a convenient and cost-effective way to move money overseas is essential. However, if you’re new to the world of business international money transfers, there are some key risks and pitfalls to be aware of before you start sending funds overseas.
But if you’re willing to compare transfer providers and make use of flexible transaction options, you can give your business’s bottom line a welcome boost.
Your business international money transfer options
To do that, you need to understand the factors that affect international exchange rates so that you can lodge your transfer at just the right time to take advantage of a high rate.
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What are business international money transfers?
An international money transfer allows you to send money overseas and basically works as follows:
- You use your Australian dollars (AUD) to buy an equivalent amount of foreign currency from a transfer provider. For example, if you wanted to send money to the United States, you would purchase US dollars (USD) based on the AUD/USD exchange rate offered by the transfer provider.
- The transfer provider, such as a bank or specialist online transfer company, exchanges your AUD for the foreign currency.
- The provider then transfers the foreign currency to your recipient’s bank account overseas.
International money transfers can be conducted by both individuals and businesses, so a business international transfer is a transaction carried out on behalf of a business. Some of the reasons you may need to send money overseas for your business include:
- To buy business stock or equipment
- To pay suppliers
- To pay overseas staff
- To settle an outstanding debt
- To pay for professional services
- To fund an overseas expansion plan
Should I use a bank or an online transfer company?
Many businesses automatically assume that the best way to send money overseas is straight from their normal business transaction account. After all, the account already exists, is already funded, and your bank has all the procedures in place to send an international transfer.
Unfortunately, using your bank for this type of transaction is often a rookie mistake. This is mainly due to the fact that banks impose hefty margins on top of the foreign exchange they purchase and sell on to you, which means that the exchange rate you receive for your transaction is well below the actual exchange rate (which is also known as the mid-market or interbank rate).
Instead of going straight to your bank, it makes much better financial sense to first compare a couple of online transfer companies to see if they offer a better deal. These providers specialise in business international money transfers, and their lower margins mean they offer higher exchange rates and minimal fees to customers.
Even doing a quick comparison can help you enjoy substantial savings. Don’t believe us? Let’s look at an example.
Case study: bank vs online transfer company
Let’s assume your business needs to send AUD$10,000 to Europe, perhaps to fund expansion plans or pay off an outstanding debt. As the table below shows, if you were to send the money from your bank account, your European recipient would end up with EUR 6,302 after the bank had taken their cut.
But if you send the money using a specialist online transfer provider and take advantage of the much better exchange rate on offer, you could send a total of EUR 6,667 – that’s an extra EUR 365 when compared to your bank, and all for exactly the same amount of Australian dollars. Throw in an AUD$18 saving in transfer fees and it becomes clear just how important it is to compare transfer providers before sending money overseas.
|Bank||Online transfer company|
|Exchange rate||1 AUD = 0.6302 EUR||1 AUD = 0.6667 EUR|
|EUR received||EUR 6,302||EUR 6,667|
|Difference in EUR received||EUR 365|
How do I send an international money transfer for my business?
Sending a business international money transfer via an online transfer company is simple. All you have to do is:
- Compare a range of transfer providers to find one that offers the best exchange rates, lowest fees and most impressive overall service.
- Sign up for an online transfer account. This is typically free to do and requires you to provide some basic information about your business.
- Enter your transfer details. Simply log into your online account and provide details about the amount you are sending, in which currency, and your recipient’s bank account information.
- You will be given a quote. Review the exchange rate and fee that apply to your transaction before deciding whether to proceed.
- Lodge your request and pay for your transfer. You can send funds to the transfer provider via online bank transfer, while many providers also accept credit card payment.
- Track your transfer online. Transfer processing times vary depending on where your business is sending money, but you can log into your account at any time to monitor the status of your transaction.
If you’re sending money via your existing bank account, follow these steps:
- Log into your online account.
- Ensure you have a high enough daily transfer limit to allow your exchange to proceed. If you don’t have a high enough limit you can change this online. In some cases you may need to call the bank.
- Locate the option for international money transfers and select the country you wish to send funds to.
- Enter the details for your recipient's bank. You may need to enter an IBAN or SWIFT number. You can find this on the bank’s website.
- Enter the recipient’s bank account details.
- Select the amount and currency you wish to send and the account you wish to withdraw it from.
- Confirm the payment.
What bank account details do I need to provide for the overseas recipient?
- You may need to provide the SWIFT/BIC code of the recipient’s bank, which is an internationally recognised code assigned to each banking institution.
- You’ll also most likely need the recipient’s IBAN, or International Bank Account Number.
- You may also need to provide the recipient’s account name and their address.
How to choose the right transfer provider for your business
Which money transfer provider is the right one to handle international transfers for your business? Consider the following factors before choosing a provider:
- Exchange rates. The higher the exchange rate that applies to your transfer, the better value for money you will get. Compare exchange rates from several providers to see which one offers the highest rates for your regular transfer currencies, but make sure any exchange rate you compare is the actual rate that will apply to your transaction and not the mid-market rate.
- Transaction fees. In most cases, you’ll need to pay a fee each time you send money overseas. Compare fees between providers to see which company imposes minimal additional charges. It’s also worth mentioning that some providers waive their fee on large transfers, while other companies will offer regular customers fee-free transfers (for example, every fifth transfer is free).
- Where you can send money. Check each provider’s list of supported transfer destinations and currencies. Does it allow you to send the currencies you want to transfer to your chosen recipients?
- Processing times. How long does it take for each provider to complete a transfer? Is there an urgent service available for emergency transfers and, if so, does this attract an additional fee?
- Transfer limits. Does the provider have any minimum or maximum transfer limits? Are those limits likely to affect your ability to manage your business?
- Flexible options. Does the provider offer flexible transfer options that can help you save time and money? These include:
- Regular payment plans. for when you need to make a recurring payment
- Forward contracts. so you can lock in an exchange rate today for a future transaction
- Limit orders. so that you can specify the exchange rate you want to receive for a particular transfer
- Personal account manager. Some transfer companies offer the convenience of a personal account manager to look after all of your business transfers. This means you can deal with someone who understands your transfer needs and guarantees the convenience of one point of contact at all times.
- Customer service options. It’s also important to investigate what type of customer support options a provider offers. As well as an online help and FAQ centre, this may also include phone, email and live online chat help.
Are business international money transfers secure?
Business international money transfer providers are regulated by the Australian Securities and Investments Commission, the same way a normal bank or financial institution is. They are also required to operate under a current financial licence. You can find their licence number listed on their website.
All overseas transfers of $10,000 or more are also automatically reported to the Australian Transaction Reports and Analysis Centre (AUSTRAC) to safeguard against money laundering and terrorism financing.
Got it – what do I do now?
Now that you’re across the ins and outs of business international money transfers, the next step is to start comparing money transfer providers. Use the table above to compare the fees, exchange rates and services offered by some of Australia’s leading international transfer providers.
Simply enter the amount of money you need to send overseas and the transfer destination, and the table will then display a range of suitable options that match your needs. Once you’ve compared a range of providers, click through to a couple of the transfer companies offering the best value for money by using the “Go to Site” buttons. You can then obtain personalised quotes for your business transfer so that you can weigh up your options before choosing a provider.
All you need to do is follow a few simple steps:
- Use the table above to choose the best providers for your business transfer, then click through to their sites and request quotes.
- Compare quotes and choose a provider.
- Register your business details to create an account. As well as contact details and a form of ID, you’ll also need to supply your ABN and a business address.
- Once your account has been approved, you can log in online and request an updated quote with the current exchange rate. Once you’ve reviewed and approved the transfer details, finalise payment and lodge your transfer request.
- Your transfer will be sent and you can track the progress of the transaction online.