Transfer and send money overseas

So what exactly is a wire transfer? Essentially, a wire transfer is the transfer of money from one bank account to another. The transfer is always conducted by a third party, such as a bank or a wire transfer service provider. Because the transaction is carried out electronically, the money is never physically seen or touched by the person who sends or receives the money.

Even with the advent of communications technology and alternative online banking services, however, most people prefer to carry out a wire transfer through the traditional route. This remains true for many reasons, but the main reason is that it is easier to trust a bank that has a well-known name and a physical presence outside of the web than a new company that operates almost exclusively over the Internet. And if you already have a bank account, a wire transfer is very easy to accomplish.

Usually all you have to do is contact your bank by phone or through the Internet. You must then provide the bank with the following information: name of the person or company to which you want to send money, as well as the routing number, account number, phone number and address of the recipient's bank. The next step is to determine the amount of money you wish to transfer and when the transfer needs to be carried out. After the bank receives this information the wire transfer will go through. Some banks allow this to occur immediately if you've initiated the transaction online, while other institutions require that you phone or fax them before proceeding.

After you have sent the wire transfer, it is a good idea to confirm that the transfer has gone through. This is the only way you'll know whether or not the intended recipient received the funds. You should make sure you have sufficient funds in your account as well, otherwise the transfer won't go through. Also, find out what fees you will have to pay to make the transfer – this type of transaction is never free.

As the drug war moves into the Information Age, the Clinton administration has proposed new regulations for transfer money overseas. Called "another nail in the coffin of financial privacy" by Financial Privacy Report Publisher Mike Ketcher, the new rules would force anyone sending more than $750 abroad to provide identification to the financial institution wiring the money and have the transaction reported to the Treasury Department.

Current regulations require that all cash transfers of more than $3,000 be recorded by the wiring service and that all wires over $10,000 be reported to the government. The Treasury Department reports an increase in the number of transfers below the current reporting thresholds from the United States to Colombia, attributing it to drug dealers sending money to their higher-ups in South America.

Yet law-abiding people who wire money in amounts below the reporting threshold may be under the watchful eyes of law enforcement. In Texas, where businesses must report financial transactions of more than $1,000, the Federal Register notes that "surveillance" has been used to track the difference between the "number of people observed patronizing" a money-transfer business and "the number of customers reflected in business records." Treasury predicts that merely filling out additional paperwork will cost those who wire money overseas an extra $2.4 million. The department is expected to hand down the new Bank Secrecy Act regulations by the end of the summer.

COPYRIGHT 1997 Reason Foundation
COPYRIGHT 2004 Gale Group

The transfer company had no commissions, transfer fees and also gave a rate that was close to 3 cents to the pound better than the banks. All the funds would be transferred electronically to the bank account of our choice normally within 2 working days. We were even offered a choice of payment methods which included direct debits/debit cards/electronic wire transfers and the ability to “book” a rate in advance for a small deposit and then pay the balance prior to the contracted transfer date.

We had to find out how these people could offer such a service so quite bluntly asked. The answer was very simple. This was a dedicated, specialist company that dealt on the Forex markets in large volumes – this meant that there would be a low profit margin on each individual deal but the overall volume made it worth while. Because they are a specialist company, they could pass on the savings to their customers and the use of modern, electronic transfers ensured the costs were low with no need to pass them on to us! A true Win-Win situation.

The other added bonus is that these people are dedicated foreign exchange experts who research the markets and accurately forecast the trends and can advise action accordingly. If it makes sense to “book” a rate for settlement up to 2 years ahead then that will be recommended – you pay a deposit and commit to the deal and then they buy the currency at the agreed rate of the day. They hold the currency on your behalf and then at the agreed date you pay the balance and the money is transferred. This protects you against fluctuations and allows you to budget accurately.

Essentially, the high street money transfer agencies are similar to the banks. They may know more about the transactions but will hit you with commissions, charges and not the best rates.

Travellers cheques and cash speak for themselves – don’t do it! They are easily lost/stolen, some countries only allow a limited amount of cash to be carried into the country and in the case of travelers cheques, you may have to pay to buy them and then to cash them in. Just plain don’t do it!!!!

Last, but not least, it’s the international currency transfer companies. I had no idea that international currency transfer specialists even existed, never mind the exceptional services on offer.

To start with you have several choices how you move your money:

1. Use your normal Bank and accept the charges and the fact that you may not be talking to an expert when you discuss the transfer.

2. Use a specialist international currency transfer company

3. Use a normal money transfer agent (again accept the charges)

4. Buy a huge amount of traveler’s cheques or take cash (not recommended)!!!

In today's volatile currency markets, a small change in the currency rates, coupled with the high commission charged by most banks can make an enormous difference in the net currency amount received when converting your currency, you are placing what is possibly your life savings into someone else’s hands. Depending on the size of transaction, this could make a tangible difference of several thousand dollars; money you may prefer to put towards starting your new life! This can leave you exposed to the market fluctuations and could give you a handsome boost to your funds or put a big hole in your budget.

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