The following is a guest post from USForex, a specialist payments provider who has partnered with Greenback Expat Tax Services to offer special rates to our customers. We are excited to welcome them to our blog!
As an expat, you likely pay bills overseas, move money between accounts and sometimes even between countries. When looking at your complex financial affairs, the cost and convenience of your international payments can be an afterthought. You may be unaware that there is a simpler way to manage your foreign exchange when sending money abroad. Switching from a bank to a Specialist Payments Provider can offer significant financial (and time!) savings.
The Cost of Making International Payments
Banks can make life difficult and expensive for US citizens living overseas. Often it seems they are not effectively structured for dealing with international customers even when they say they are. Obstructing international payments and transfers, offering poor rates of exchange and charging high fees is a common problem.
The basic cost of a foreign exchange transfer is calculated in two ways:
- The difference in the quoted ‘midmarket’ exchange rate and the rate that is obtained from the provider (the “Spread”).
- The fees that are charged for moving those funds between accounts.
Banks often offer a spread of 5% on smaller payments and up to 3% on more substantial transfers. This is a significant charge when you consider the sums involved. For example if you were to send $50,000 to the UK, your bank might be charging you up to $2,500 on the spread by utilizing a non-competitive rate—and this is before the fixed fees!
Fixed fees can vary greatly depending on the method used to wire the funds. Often customers will find their US bank charges a fee of up to $30, then intermediary banks can deduct up to $20. These charges are not only costly, but they can also be frustrating due to a lack of transparency.
There can also be another fly in the ointment. US banks will sometimes not authorize payments if they are being instructed to send funds internationally by a customer whois not residing in the US—or in some cases physically present in a US bank branch. This scenario can force customers to fly back to the States to make the payment, particularly when it is a large transaction for an overseas property purchase, for instance. The added cost and inconvenience of having to return to the US to complete this transaction is a huge burden—and an unnecessary one.
How a Foreign Exchange Specialist Can Help
There are alternatives! A foreign exchange specialist, such as USForex, who has extensive experience working with US citizens, can offer private clients and SME’s access to institutional exchange rates and a wide variety of options for making payments to and from the US. Their speciality is eliminating pointless fees, reducing ‘spreads’ and providing customers with a cost-effective alternative for all international payment requirements.
Expats have a whole host of challenges, but making international payments doesn’t need to be one of them. While it may seem easiest to use your local bank, the uncompetitive rates and poor customer service often make it the least desirable option.
USForex are part of the OzForex Group a business that listed on the ASX last year and are cited with having the world’s best disruptive technology in the international consumer payment space. Their online mobile and phone based service ensures that transfers are simplified, their clients get the best rates and charges are minimal. They make in excess of $12 billion in payments annually and 50,000 new customers flock to the service annually.
Greenback Expat Tax Services has negotiated further enhancements to their rates for customers, as well as free transfers. The service is free to register and carries no obligation to use.
Find out more about USForex!
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