Some of the logistical aspects of travelling to far flung places like Southeast Asia can be less than fun. One of the major every day complications is how to get access to your cash back home without getting charged a fortune every time.
Why Make International Transfers?
Thailand and other parts of Southeast Asia have plenty of ATMs knocking around, so you can often withdraw local currency easily from most areas. But, it’ll probably cost you quite a lot to do so each time, thanks to ATM and other associated bank charges.
Paying these fees is irritating if it’s just for small withdrawals, but for large sums – for example, to cover payments for multi-day excursions, apartment rental or for language / cookery courses – the cost of withdrawing cash quickly mount up.
Moreover, when you’re in a foreign country, you might well be more reluctant about withdrawing and carrying around large amounts of cash, in case this later gets lost or stolen.
At first glance, a standard international bank transfer seems like the ideal away to avoid any such issues.
What’s Wrong With International Bank Transfers?
The problem is that conventional transfers, made through the banking system, end up being expensive. Plenty of brokers and other intermediaries are involved in the buying and selling of currency that is involved with any such transaction.
charges are high even from banks which claim to arrange 'free' international transfers
So, if you’re a US citizen staying in Singapore, for example, the bank will trade with several other parties to arrange the sale of your US dollars and the purchase of your Singaporean currency. Even where banks claim that they perform this service for ‘free’, they are often making a profit by offering exchange rates below the mid-market level.
The effective fee on the transaction, then, remains high; often in the region of $40.
The Cheaper Alternatives
What else can you do then?
One of the best options for sending your money to Southeast Asia is to use the services of TransferWise. This company works a little differently in that it cuts out some of the financial intermediaries in the transactions, and instead works via its own peer-to-peer system.
As you’re not exchanging money with financial entities, but rather with someone exactly like yourself in another country (via the TransferWise platform), the costs are much lower.
Some details of how the platform works are outlined in the below video, but the most important thing to note is that the whole transaction ends up costing only about an eighth of what the banks would charge.
Is My Money Safe?
You might think that going outside of the ‘conventional’ banking system to make international transfers could be a little risky. But that isn’t really the case.
TransferWise is authorised and regulated by the UK’s Financial Conduct Authority (FCA) and is subject to European legislation, including the Payment Services Directive, that protect the customers of such services.
As well as having to continually demonstrate their financial solvency, companies (like TransferWise) that are authorised by the FCA have to keep their customers’ funds separate from their own.
This means, if such firms were to get into any financial difficulty, your money should be safe. In either case, TransferWise generally only holds your funds for a short period of time (sometimes just a matter of minutes, but other transactions can take a couple of days) which further minimises the risk.
Additional assurance can be gained from the fact that the company now handles transactions worth around USD700 million a month, and that it has around 1 million customers. TransferWise also has an average customer feedback rating of 9.5 out of over 32,000 reviews on TrustPilot.
Where in Southeast Asia Can I Transfer To?
TransferWise is constantly working to expand its transfer network to cover new countries and currencies throughout Southeast Asia and the world.
In Southeast Asia, you can currently make transfers from all major currencies (US dollar, British Pounds, Euros, Swiss Francs, Canadian, New Zealand and Australian dollars etc) into Singapore dollars, Thai Baht, Philippine Pesos, Malaysian Ringgit, Indonesia Rupiah and Vietnamese Dong. You can also make transfers from Singaporean dollars into any of the above currencies, among others.
To see how much the rate you would get from TransferWise have a play around with the figures and currencies in the below calculator. You can then use this to compare with the rate that your bank would offer you.
Alternatively, you can make your first transfer directly via this system and TransferWise will kindly tell you themselves how much you’ve saved compared to conventional mechanisms of international transfers. Once you go down this route, you’ll never go back to your old ways.
As regular users of TransferWise we are happy to partner with the firm to recommend its services. If you decide to do likewise, please support us by clicking on one of the above affiliate links to earn us a small commission on your transfer (at no extra cost to you).<