How do international wire transfers work for businesses?
Today, making international money transfers is a matter of minutes. You can do it from anywhere, anytime, all thanks to the rapid advances in technology like digital banking and online apps for money transfers. You can easily make international wire transfers and exchange various currencies without having to go anywhere.
While making an international wire transfer through your bank, you will have to direct them and give them instructions as to where the payment has to go. You can do this by providing them with the recipient’s details by calling your bank or filling out the form. Business money transfer fees depend on the location of the recipient’s bank.
When the wire payments are made through a non-bank service, the transfer fee is considerably lower. These services also provide the facility to complete the whole process online, which means you won’t have to visit the branch. You just have to create an account with the company and wire payments online or through the phone. Once you make the payment from your end, the company forwards it to the recipient’s account. These services have an edge over any traditional bank because it also provides more flexibility to choose exchange rates. One of the options is to conduct the foreign money transfers at the current exchange rate, which is said to be simpler and more convenient.
However, you can also decide to make the international wire transfer on a forward contract. This is extremely beneficial when you want to enjoy the benefits of the present exchange rates but make the wire payments at a later date, as you get an option to lock your transfer at the current rate for 12 months. Another available option is to opt for a limit order. In this, you can nominate the exchange rate you prefer and the company will make the transfer as soon as that rate is on the market. These can also last up to 12 months but are prone to high minimum transaction amounts.
There are numerous banks and special services which offer wire transfer facilities. These services are mostly provided online. Whichever provider you choose, you can go to their website or your dashboard and select the wire transfer option from there.
Here is the information you will need to make an international money transfer:
- Your bank account number
- Name of the recipient
- Recipient’s bank name and address
- Recipient’s bank account number
- Recipient bank’s SWIFT code
- Any other information your service provider requires for wire transfer
Once you have all the necessary information available to make the wire transfer, you will have to fill out a form. This step can be done either online or offline, depending on your transfer service provider. When you enter the recipient’s bank details, the home currency is automatically displayed in most cases, however, you can always choose it manually. After filling out the form you are required to pay the international wire fee.
To conduct any international wire transfer, there are certain charges involved. A flat foreign currency charge is always there and most providers do not charge any remittance fee but in some cases, there can be some flat fee. A remittance fee has to be paid if the foreign money transfer is being done by an intermediary bank. You will also have to pay service tax on the funds’ transfer and the tax amount depends on the transferred amount.
Once the foreign transfer procedure is complete, keep the receipt with you. International wire transfers usually take 24-48 hours. You can easily track the status of the foreign money transfer. The process is complete when the intended receipt receives the money. Wire transfers are generally used to send money overseas.
Forwarding international wire transfers by any bank can be very expensive. The cost of the wire transfer typically depends on the channel through which you are sending the money. All banks and international money transfer service providers have distinct structures and all the institutions charge different margins on the daily exchange rate. On the basis of the size of your transfer, you can save up a big amount by comparing the prices offered by different institutions.
Banks normally tend to charge consumers with a higher markup in comparison to any mid-market rate while converting currency. This is charged as a percentage of the total foreign money transfer. Non-bank services are considered a better option for international wire transfers because they help the customers avoid costly markups by charging the mid-market rate.
Any domestic transfer is completed within a day or two. However, when it comes to international money transfers, it depends if you are doing it online or offline. Online processing takes lesser time than offline. Wire transfers are conducted by the bank only on business days within a time frame. It is advised to check with your bank or the non-bank institution regarding the number of days the transfer would take.
All the wire transfer instructions go through the SWIFT network. In the wire transfer process, up to three intermediary banks can be involved. After this, it finally reaches the recipient’s account. Therefore, international business money transfers can take up to five working days.
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Volopay is a third-party service provider that helps businesses easily carry out domestic as well as international money transfers.