Melbourne Cup Carnival is upon us. That means a week of long lunches, fancy hats and LOTS of horse races. But with all the attention on racing's premiere week, one thing you should never leave to chance is the exchange rate when making an international money transfer.
Beware of the tricks when converting your money
Unlike at the races, where there is a defined pay-out for your bet, some international money transfer companies make it really difficult for you to know the true cost of your transaction in advance. These businesses use catchy marketing phrases like “fee-free transfers” or “0% commission” to make you think that you’re getting a good deal, but then charge you hidden margins on the exchange rate.
The exchange rate margin is where banks and some money transfer companies, like Paypal and Western Union, make the most money from their customers. On average, they can add an additional 4-6% onto the total cost of your transfer. That’s why it’s really important to go with a service that shows you rate you are getting BEFORE you commit. You wouldn’t put a bet on without knowing how much you could lose, right? Same idea here!
The Real Exchange Rate
Finding out the exchange rate in advance gives you the opportunity to compare it to the real market exchange rate. Without over-complicating it, the real exchange rate is the fairest expression of the price of a currency and is where banks buy and sell currency from one another.
It’s easy to find, too. A simple Google search will reveal a bunch of independent sources that publish the real exchange rate – Yahoo Finance and Bloomberg are two such websites.
How the exchange rate can impact my transfer
If you have ever made an international payment or exchanged currency at the airport, then chances are you have been stung by the hidden charges companies hide in the exchange rate.
Let’s look at a quick example to illustrate how much money you could be losing on poor exchange rates:
• The real market exchange rate for AUD/USD is 0.7200
• If you are sending $1,000 AUD, you should receive USD $720
• You received a worse rate of 0.6700, meaning you only got USD $670.00
So, without even realising it you were secretly charged US$50.00.
Don’t gamble on the exchange rate
Knowing the real market exchange rate gives you a benchmark to compare whether the rate a company is offering you is fair or not.
As a general rule, if a business isn’t forthcoming about the exchange rate – AVOID them.
Transparency isn’t something you should have to bargain for. At FlashFX, we are bringing fairness and value to the money transfer process.
Use our currency conversion calculator to see the real exchange rate you will receive when you transfer money with us. We even let you see how that rate compares to banks. Simply click “See How We Compare” to see how much money you can save by transferring with us.
Knowing the true cost of your transfer upfront will help you better manage your finances and ensure that there are no hidden surprises once the transaction has gone through.
Interested in learning more about how you can get the best exchange rate? Read our comprehensive guide to find out everything you need to know.
Leave the gambling for the races. Secure a great exchange rate for every transfer with FlashFX.