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Why you are paying too much to send money abroad

In a globalised world, why on earth should it be such a hassle to send money abroad?

Why you are paying too much to send money abroad
Photo: Transferwise

Whether you’re a freelancer who regularly invoices international clients, or you’re simply an international citizen who needs to pay bills in another country…finances can be a hassle.

Misleading exchange rates and hidden fees can leave you with a lot less in your pocket than you thought– time after time.

“One day I was checking my expenses and saw a massive charge. I thought I'd been the victim of a crime,” says international photographer Simon. “But it was just the charge my bank was imposing on me for using my card abroad.”

It’s an all too common problem. An estimated 55 million people live abroad, and moving money along with you is a part of life. But doing so isn’t always easy

As Simon discovered, banks are not the way to go. You may assume that they'll give you a good deal – but banks often charge excessive fees, not to mention secret markups.

You can try looking up the exchange rate online,  but that rate doesn’t necessarily correspond to the rate used by your bank – many banks show a misleading exchange rate that actually includes hidden fees, which go straight from your pocket to theirs. And if you’re regularly sending money abroad, those fees really add up.

And for businesses the problem is magnified.

“We’ve never used banks as their fees are exorbitant,” agrees Braden Yuill, founder and CEO of Virtual Coworker, an online recruitment service. The company provides outsourcing services that often require international payments to overseas staff– a process that can get pretty complicated.

While Paypal can be a workaround – the service is at least open about adding charges –users still have to put with a 2.5 percent currency conversion fee on top of the retail exchange rate, plus additional transactional fees… so you end up with less. (If all that sounds confusing, it’s because it is!)

Find out how to use TransferWise for your business

Braden says his company tried multiple options for transferring money but ran into plenty of problems.

“We have used a few different providers and had a few different issues, including payments being sent to the wrong people.”

So what is the best way to pay for small business owners like Simon and Braden?

“Now I use TransferWise to move my money around the world,” says Simon. “The app makes the whole process simple and fast. I wouldn't be without it.”

TransferWise is a new kind of financial service created by two expats who were sick of unfair exchange rates and hidden fees. The service charges just 0.5 percent on most transfers – which means it's up to ten times cheaper than the average bank.

That obviously makes it a friendlier service for expats transferring small amounts regularly – but it’s also a blessing for small business owners.

“With over 250 staff, we were spending hours setting up individual payments each month,” Braden says. “Now our financial controller can make 250 payments in five minutes.”

How TransferWise can help your business

TransferWise has a service exclusively for businesses, which allows you to pay invoices, freelancers or get paid. It’s a borderless product, meaning businesses instantly have local accounts, can hold multiple currency accounts and all with top security.

Business owners can now choose to make a payout to an email address or a bank account, and payments can be made in as little as a single working day – in more than 500 currency routes, with real and fair exchange rates.

“Businesses can benefit by using TransferWise for both their national and international payments,” says Erik Johansson, Product Manager at TransferWise.  “Our systems are faster and cheaper, but what really sets TransferWise apart is the fact that there are no extra fees, whereas normal banks add on all sorts of fees!”

As you would expect, it is fully regulated by the Financial Conduct Authority and protected against fraud and money laundering, so your money is safe with them.

Opening a TransferWise business account is simple: first, set up a standard account – get started by registering a personal profile here.

From there you can set up your business profile by adding company details on your settings page. TransferWise will walk you through a simple verification process (security is of utmost importance!) and soon enough you'll be on your way, able to send money on behalf of your business any time, any place.

If you need to make transfers for multiple business, just get in touch with TransferWise customer service and they’ll help you set that up, too.

“TransferWise has been a great solution,” Braden says.  “It’s not just time we’re saving – we’re saving on costs and reducing the potential for human error.”

Photographer Simon agrees.

 “I honestly consider TransferWise an essential for anyone who travels and needs to move money around.”

Need to make a transfer? Be smart – find out more about TransferWise

This article was produced by The Local Client Studio and sponsored by TransferWise.

  

MISSING PEOPLE

Why is this Italian football club posting missing people pics?

On the left, the smile of a footballer, happy to join his new club. On the right, another smile, but one which hides a dramatic story. AS Roma are using transfers to highlight the plight of missing children.

Why is this Italian football club posting missing people pics?
When the AS Roma signed Pau Lopez, it put out a search for a missing 15-year-old. Photo: AS Roma/Twitter
Roma is one of the two major clubs from the Italian capital along with eternal rivals Lazio and on Sunday both will go head-to-head in a fiery derby clash at the Stadio Olimpico.
   
On social media, clubs compete for originality when it comes to announcing new signings, and in recent years Roma have built a solid reputation for their quirky humour and style.
   
But in 2019, the three-time Italian champions decided to take another approach to announcing new signings, using the club's extensive digital media following for social good.
   
New recruits are now presented alongside the face of a missing child, with information, a phone number and a video clip.
   
The project is run with 13 associations and since June 30 and the signing of Italian defender Leonardo Spinazzola, six children featured have been found, in Great Britain, Belgium and Kenya.
   
“I don't think any of us expected a child we'd featured in a video to return home safely, obviously we prayed it would happen but we didn't expect it,” Paul Rogers, AS Roma's Chief Strategy Officer told AFP.
 
“When I got the first call from the charity Missing People to say a teenage girl from London who had featured in the Mert Cetin video six days earlier had been found safe, it was one of the best days I have ever had at work. I was so excited to tell everyone. It was just brilliant.”
 
In Septemer, the club announced that the 13-year-old Kenyan boy featured alongside the transfer of Chris Smalling had also been found. 
 
   
In total, Roma broadcast 72 videos last summer, presenting 109 missing children from 13 different countries.
   
It was truly global with the focus on the United States, South America, Europe and Africa. These videos were viewed 11 million times, the club said.
   
At the launch of the initiative, Jo Youle, CEO of the British association Missing People, stressed how precious the power of Roma on social media could be.
   
“AS Roma is giving us a fantastic opportunity to reach a wide audience by sharing appeals for missing children and young people with their millions of fans,” she said. “Raising awareness among as many people as possible is crucial.”
 
'Painful context'
 
The concept was inspired by American rock band Soul Asylum's 1993 video 'Runaway Train' which featured missing children, 21 of whom were later found.
   
“Obviously, there was no public internet and no social media back then, so the band used MTV, which I guess was the best way to reach young people across America and the world at the time,” explained Rogers.
   
“With Roma, we thought we could try and do something similar but updated for the social media generation.”
   
The fact that footballers, who have millions of followers on Twitter and Instagram, are associated with the campaign means that it reaches an even bigger audience.
   
“I have spoken with some players like Chris Smalling, whose video announcement featured a teenager who later returned home safely, and I can say that they were beyond proud,” said Rogers.
   
The initiative was to continue during the January transfer window which closes next Friday, but Roma have not yet recruited a new player.
   
And the recent announcement of the death of a young American who had been due to appear in the next video was a stark reminder of the painful context.
   
“The NCMEC (National Centre for Missing and Exploited Children) told us that many brands are scared off by this subject but that only made us more determined to do what we could to help them,” continued Rogers.
   
The Roman club are now trying to convince other big names in European football to join them for a joint initiative on May 25, International Missing Children's Day.
   
“With the help of clubs like Real Madrid, Chelsea, Borussia Dortmund and Marseille, we can help reunite some families,” added Rogers.
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