The world is more connected than ever before thanks to modern technology and the Internet. Businesses send money overseas for many different reasons, from paying international suppliers to buying stock or consolidating their financial strength in overseas markets. Since businesses can choose from any number of international money transfer providers, it pays to compare your options to find the best deal.
OFX International Money Transfers
Exclusive offer: OFX is currently offering exclusive exchange rates to Finder readers.
- $0 transfer fees. Send fee-free transfers to a large selection of countries worldwide.
- Transfers in 50+ currencies. OFX supports major, minor and exotic currencies.
- Flexible options. Choose from forward contracts to scheduled transfers for convenience and flexibility.
In an effort to save time, many business owners choose to send money transfers through their regular banks. Unfortunately this is one of the least efficient and most expensive ways to send money overseas. Banks offer sub-par exchange rates and charge high fees, in addition to offering limited currencies.
Money transfer services, on the other hand, generally offer more competitive exchange rates and much lower fees, in addition to a faster delivery of funds to their destination. In addition, many money transfer companies will waive their transfer fee when you send more than a certain amount of money (around $10,000), so keep an eye out for this feature if you want to maximize your savings.
Case study: Kevin sends money to the United States
Kevin is a small business owner looking to send a one-off payment of $15,000 from Canada to an important supplier in the United States. Although tempted to use his regular bank to perform the transaction, he decides to compare sending the money through his bank or via a money transfer provider.
|Bank||Money Transfer Service|
CAD$1 = USD$0.74
Amount received (for $15,000)
2 – 5 days
1 – 2 days
or cash pick-up
Kevin realizes that he can save USD $150 (around $196) in the exchange rate with the money transfer option, with an additional $15 in fees.
Booking a limit order
Kevin decides that he wants to save even more on his transfer, so he books a limit order with the money transfer company which allows him to choose an exchange rate in advance. The money transfer service then monitors the market and when his selected exchange rate is reached, his transaction is processed. Kevin decides he wants his order to process when the exchange rate reaches CAD$1 = USD$0.75. This exchange rate is reached six days later, and Kevin’s transaction goes through, saving him an additional USD$150 (or CAD $196).
It’s possible for businesses to send money overseas through many Canadian banks, including TD, Bank of Montreal, Royal Bank of Canada, CIBC and Scotiabank. However, business owners can also conduct international money transfers through specialist companies like OFX, TorFX, CurrencyFair, TransferWise and others.
In many cases, you can save money by using the services of a money transfer provider instead of a regular bank. Money transfer providers usually offer better exchange rates, lower fees and faster processing time for transfers. While banks offer a wide range of financial products and services, international money transfer providers specialize in sending funds overseas.
Compare the following features when choosing a money transfer provider to conduct your business transfers:
- Competitive exchange rates. When the exchange rate is more competitive, your recipient will end up with more money in their bank account (meaning you have to send less on your end). It’s quick and easy to compare exchange rates online. Some companies also offer exclusive rates to business customers, so be sure to ask about competitive pricing.
- Minimal fees. Many transfer companies will charge a fee for your business to send money overseas, which will often vary depending on the method you use to transfer funds as well as the amount you send. The best way to make sure that you’re getting the best deal possible is to compare 3 – 4 services. It’s also worth noting that many providers will waive their fees for transactions over $10,000, so be sure to ask about this feature if you intend to send a five figure amount or more.
- Bonus features. Ask about business-friendly features like limit orders, forward contracts and regularly scheduled payments. Limit orders and forward contracts let you take advantage of fluctuating market exchange rate by booking desirable rates in advance. Regularly scheduled transactions can also help business owners to organize their budgets more effectively.
- Customer service and availability. Consider which provider has the best reputation for customer service. Find out if assistance is available 24/7, whether online, over the phone or via live chat. This is an important feature to consider when you’re dealing with large or time-sensitive transactions that may need quick and efficient troubleshooting.
The basic steps you’ll need to follow when sending money with your business account are outlined below:
- Sign up for an account. Once you’ve chosen a transfer company, you can usually register for a free online account using your name, contact details and proof of ID. You may also need to provide additional information about your business, including your business number.
- Enter your transaction information. Specify the amount of money you want to send and the currency, and fill in your recipient’s banking and personal details.
- Complete your transfer. Review your payment details as well as the full cost of your transaction and then submit your transfer. You will most likely receive a reference number you can use to monitor the progress of your funds. Keep this reference number in case you have any problems.
This varies between providers. Certain currencies are staples on the international currency market, such as the United States Dollar or the Euro, while other
currencies are rarer. Contact your provider for a full list of the available currencies.
If you’re looking to send an international business transfer, it’s worthwhile to shop around and compare your money transfer options. Keep an eye out for special features like limit orders and forward contracts and ask for quotes from 3 – 4 providers before you book your transaction. Compare reputable business services today with Finder Canada.
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