No bank or company usually tell people about their exchange
rates. Its because they have hidden incentives on every money transfer. According to an
estimate, Paypal has 2.5% incentive over every transfer. American Banks are
charging 2%, while some of them are even charging 4% hidden incentive on money
transfer. US Banks have relatively lower margins, but no bank is charging less
than 1% incentive on international money transfer.
When people send money to another country, they usually
assume that all of the deducted charges are due to the currency exchange rates.
But, that’s not true! Each international bank has an incentive ratio, that they
charge on every transaction. So, how can a person calculate hidden charges? And
how can you choose the best provider that is offering the lowest hidden
charges? The trick is simple yet efficient. You can identify the actual rate
and hidden fee in three steps.
The open market exchange rates are available on many online
sites. Before you send money to Nepal or any other country, make sure to check
the forex exchange rates. From there, you will get the “Actual Exchange Rate”.
As they may vary daily, make sure to check these rates on the same day of
payment transfer.
·
Talk to your bank or IMT provider and take a
quote.
·
Now divide the actual exchange rates by the
rates provided by your bank. You will get the value that is actually
transferred.
·
Subtract the results from the total money that
was sent. You will get the hidden fee that any bank is charging.
Let's say if you want to send money to Pakistan from the
USA, then how can you determine the hidden fee? Here is an example that will
help you in better understanding the method of calculating the unexposed fee of
your transfer.
·
Check the exchange rates firstly. Currently one
us dollar is equivalent to 156.61 PKR
·
Get the quote from your bank. Lets suppose your
bank is offering 29668 PKR on transferring 200$.
·
Divide 29668PKR with 156.61 PKR. It gives a
value of 196.4.
·
Subtract 196.4 from 200. 4.6$ is the hidden fee
that your bank was charging.
If you are sending a large amount such as 2000 or 5000
dollars, then even a 2% hidden fee can cost a lot. It is mandatory that you
will have to pay a hidden fee whenever you use a bank for international
transfer. But, money transfer companies usually do not have a hidden fee. Even
if some of them charge any incentive, then it will be far lower than that of
banks. To get the best rates and pay minimum hidden charges, try to use Ace
Money Transfers for international transfers.
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