Advice on Money Transfers

There are various options for transferring money to and from South Africa with the vast majority of money transfers being conducted by either banks and relatively few still by currency transfer specialists.

Traditionally money transfers have the remit of banks but more and more countries have seen increasing growth in the number of currency companies or brokers offering specialist services. South Africa is relatively new in supplying bespoke and specialist currency companies but a simple search on the internet will confirm that the fast majority of experts in this field recommend the use of a currency company over a bank – but why?

Using the service of a currency company in preference to a bank normally boils down to two key elements:

1. Costs - Why is a currency company cheaper than my bank?

Always a good question, after all currency companies are getting their currency exchange rates from banks as well.

Banks will do many small money transfers each and every day and each transaction they perform is treated as an individual transaction. On each transaction the bank will have a large spread (the difference between what they buy for and what they sell to you for) and in addition levy money transfer service fees on top of this.

On the other hand currency companies will trade a large amount of currency per day that gives them access to lower spreads and they do not levy individual charges on each transaction. By pooling money together and exchanging a bigger amount, currency transfer companies are getting better exchange rates.

It is typical for a bank to have a spread of Interbank plus 5% whereas currency companies are more in the range of 0.4% to 1.5%.

2. Service – How will I get better service than my bank offers?

Bank - Typically a call to your bank will result in a bit of a wait whilst they access the right person. Often to perform a transfer you will be required to come into the bank and see someone and they often cannot provide you with an exchange rate there and then.

The complication of exchange control regulations in South Africa also means accessing the right advice is difficult. Often staff are not trained in this area and furthermore they will require you to obtain and supply them with a myriad of tax clearances, invoices etc before any exchange can take place.

Banks tend to be reactive in their approach – meaning a request from you to them to 'please call you' when a certain exchange rate is reached will go unheeded.

They are geared towards a one stop service approach and unless you transfer substantial amounts each month they provide you with their 'boxed' product and service levels. Try asking your bank to come to your company to discuss your R1 million rand a month you need to transfer.

It remains just a part of their business and is not their core focus; banks market to obtain depositors, loans, credit card and other such things.

Currency companies - A call to Incompass will see you in immediate contact with one of our currency experts. The expert you will talk to can provide you with registration, exchange control regulation advice and currency rates. There is no requirement for you to come into our offices but you are of course welcome to visit us.

Our team is well versed on the impact of exchange control regulations, unlike some banks who have told many of the clients we assisted that they cannot transfer their money out of South Africa.

We believe in being proactive not reactive. We are more than happy to monitor the movement of a currency rate and inform you accordingly.

We understand that individuals and companies using our services may have different needs. We are happy to discuss your requirements in full and also offer businesses a free consultation to better understand their needs and tailor solutions.

We specialise in currencies, we do not supply a myriad or other banking services meaning our team is able to focus their efforts and development in ensuring our service and knowledge is always first class.

Summary

There are exceptions of course but in the majority of cases the specialist currency brokerage wins, as they are bespoke in dealing with foreign exchange. They are more capable to achieve a better exchange rate,and provide a better service than the department of a bank, who have a number of other interests.

Contact Incompass today and join the thousands who have learnt the smart way to transfer their money