Paying via Transfer to Foreign Bank Account

[sengsational]

From what I understand from several small business owners in the UK, they get a very raw deal from the credit card agencies (at least when I suggest I pay with my cards), so something like this, or PayPal or anything outside the established credit card system is overdue. As to the scare comments, there might be many reasons for those, and not all of them should concern the users of the alternative payment systems.

 

[sengsational]

I have an unused checking account that I can use to do these transfers.

I have more checking accounts than I need for precisely this reason of limiting access to funds for a specific purpose.

Good idea! A separate account at one bank would not do, but if you had a usually empty bank account, that would work. I have a 'rate chasing' account I was going to close. Maybe I'll use that if there's no way around disclosure of passwords. But usually, you can wait for the "two small deposits" instead of giving them your password. No clue if TransferWise has that option, but I'll check.

 

[Senator]

I do my wire transfers free, with Fidelity. If I have to close on a property, Title companies require a wire transfer.

Assuming you are OK with the risk of a wire transfer, you can't beat the safety and professionalism of Fidelity. Free is also nice.

ACH/EFT is also free, of course.

 

[sengsational]

Months ago I did sign up with them, but stopped at the point where they wanted my username and password to my bank account to pull money from.

A month or so ago I signed-up and paid a small amount and used a credit card (bad idea, because although it was a promotional thing on TransferWise and free there, my CC charged me the cash equivalent fee).

Anyway, the above transaction apparently legitimized my account to the point where adding a bank account (which I just did a moment ago) did NOT trigger the request for me to disclose my password. I even went through the process of paying (ACH option) from that newly added account. I didn't process the final step to actually pay, but it looked like it was going to work without disclosing the online password.


I did notice this, which is probably for money laundering prevention / international crime prevention / taxation, etc:

Confirm your identity

To send more than €1,000 on TransferWise, you'll need to confirm your identity. You have transferred €148.04 so far.

 

[Lagniappe]

I used Transferwise quite a bit this summer, based on recommendations on this forum, to reimburse friends who had paid for lodging, tours, restaurants, etc. I transferred from dollars to euros and to pounds, with no problem at all.

The first transaction took a bit longer than expected, so I was a bit nervous. After that I received confirmation within minutes, and very good exchange rates with low fees.

Great idea to use an isolated checking account - wish I had though of it.

 

[audreyh1]

I do my wire transfers free, with Fidelity. If I have to close on a property, Title companies require a wire transfer.

Assuming you are OK with the risk of a wire transfer, you can't beat the safety and professionalism of Fidelity. Free is also nice.

ACH/EFT is also free, of course.

The Fidelity exchange rate markup runs around 3%. Better than many banks, but still seems high.

 

[audreyh1]

Well I realized my names and passwords are linked to multiple accounts including CDs so I’ll have to think carefully about how I handle this, but one with lower total funds may work. Or one with a really low balance checking account plus credit card.

 

[Alan]

The Fidelity exchange rate markup runs around 3%. Better than many banks, but still seems high.

My US bank, HSBC, has no wire fees and if I transfer to my UK HSBC branch it claims no foreign transaction fees either. However each time I line up a transfer with them and with Transferwise in separate windows then the £’s arriving in my UK account are always higher with Transferwise so I cancel and close the HSBC transfer and confirm the other. The advantage with HSBC for me would be that it takes seconds to arrive in the UK bank but with Transferwise it takes hours but is still same day.

 

[Bamaman]

This original posting was about paying for a tour when the tour operator demanded payment directly to their European bank account by wire transfer.

With the failure of one of the largest tour agencies in the world two days ago, paying for travel by wire transfer should be avoided. If a tour company is good enough to hold on to my money, they're good enough to take payment by credit cards. At least that way, you may be somewhat protected under the right of chargebacks.

We'll just pray for the 120,000 individuals that Thomas Cook has stranded throughout the world. Scheduled airlines will eventually get them home, but thousands will have to pay for hotels in the meantime.

 

[HenryD]

Just to chime in with my experience on Transferwise. I have UK-based siblings who reimbursed me for an airline ticket I'd paid for. Rather than exchange the GBP for USD I left it in my GBP denominated TW account. I've made several small transfers back to them for gifts, etc. and thereby avoided exchange fees. On the phone app you can watch the progress in real time and it's never taken more than seconds. I do know my siblings IBAN info, so maybe that's why its been so slick. Essentially TW is operating as a GBP current account for me. I have a USD account with them too, but have not had to use it.

It looks like the TW debit card is available to US residents now too: https://transferwise.com/us/blog/transferwise-debit-mastercard-launch-us I plan to look into it.

 

[bigreader]

[snip]
With the failure of one of the largest tour agencies in the world two days ago, paying for travel by wire transfer should be avoided. If a tour company is good enough to hold on to my money, they're good enough to take payment by credit cards. At least that way, you may be somewhat protected under the right of chargebacks. [snip]

I disagree. Even in the US, there are places and services that will not absorb an additional 3% fee. Outside the US, it is not always reasonable to expect local landlords, tour guides, language schools, etc to do so, either. If you insist on paying by credit card, you might be limited to staying at a Holiday Inn, taking a course with Berlitz and seeing the sights with Viatour!

My view is to do my research, be prudent and don't risk more than I want to lose. So far, so good. It's foreign travel, it's supposed to be different.

br

 

[audreyh1]

This original posting was about paying for a tour when the tour operator demanded payment directly to their European bank account by wire transfer.

With the failure of one of the largest tour agencies in the world two days ago, paying for travel by wire transfer should be avoided. If a tour company is good enough to hold on to my money, they're good enough to take payment by credit cards. At least that way, you may be somewhat protected under the right of chargebacks.

We'll just pray for the 120,000 individuals that Thomas Cook has stranded throughout the world. Scheduled airlines will eventually get them home, but thousands will have to pay for hotels in the meantime.

I had absolutely no problem paying a small local birding tour company (specialists) who has been in business many years via bank transfer. It did not bother me that they didn’t accept credit cards since direct bank transfer is a very common method of payment in Europe. Europeans are generally much less tolerant of bank fees than Americans.

In this case I had also bought trip insurance for various reasons including the large non-refundable prepayments required for a couple of tours.

 

[OldShooter]

I just skimmed through the posts here. FWIW we wire funds/deposits to tour operators once or twice a year and it has never been a big deal. We've done it through Wells and Schwab and have never had a problem. Fees ranged from 0 to maybe $35, usually a small fraction of the total amount so we don't worry about it.

I always transfer in $USD, adding a few cents to the published wholesale market rate for the local currency, then let the recipient worry about conversion. This has never been a problem.

With smaller operators and smaller countries, I usually ask if there is a discount if I bring cash for the balance of the amount due. This usually saves me a few bucks. I take only new or near-new $100 bills, as in many countries they are very fussy about the condition of the bills. Fearing counterfeits I guess. One time in Myanmar I had a tour operator refuse a new-looking bill that had one corner slightly folded over.

 

[audreyh1]

My US bank, HSBC, has no wire fees and if I transfer to my UK HSBC branch it claims no foreign transaction fees either. However each time I line up a transfer with them and with Transferwise in separate windows then the £’s arriving in my UK account are always higher with Transferwise so I cancel and close the HSBC transfer and confirm the other. The advantage with HSBC for me would be that it takes seconds to arrive in the UK bank but with Transferwise it takes hours but is still same day.

Banks may claim no foreign transaction fees, but they are usually making loads off the exchange rate markup.

 

[Bryan Barnfellow]

As I have mentioned in the past on this forum, I have been a regular user of Transferwise for the last four years. I transfer funds from my brokerage account to my bank here in Switzerland (USD to CHF) for living expenses. I make about three transfers per quarter and have never experienced any problems whatsoever. They have been fast, efficient, and very communicative all along. The negative comments reported seem very suspicious to me. I'd take them with a huge grain of salt.

My process: I go online with Transferwise and initiate a funds transfer via their bank to mine in Switzerland. I then do a domestic wire transfer from my brokerage account to Transferwise's bank, again online. My brokerage allows me three free transfers per quarter. Transferwise picks up my funds and then deposits the equivalent (less their fee) into my CHF account. I get the market exchange rate for the Dollar/Swiss Franc pair and feel the fee is quite reasonable. I just budget for it. Transferwise never sees or has access to my brokerage account.

When I started with them in 2015 the usual transfer times were longer than now; as they have grown the service gets faster. Also, the funds always have arrived in my CHF account on the date promised and Transferwise keeps me informed via email and in-app messaging of where in the process they are. I dealt with customer service once or twice and they were always polite and helpful.

Highly recommend.

=BB

 

[sengsational]

Banks may claim no foreign transaction fees, but they are usually making loads off the exchange rate markup.

A few years ago, I suspected my credit and ATM cards were playing fast and loose with the currency exchange rates, so used a bunch of different cards and compared the rates when I got home. No smoking gun; all the cards used rates that were within the daily range. Maybe they cherry picked the range, but that is tiny compared to FTFs of 3.5% that's on one of my cards. That's not to say wire transfer or someone else's card company would also come out clean, but they'd risk getting exposed because it's all there, in black and white.

 

[omni550]

I have a tour that requires payment by bank transfer (they say wire) and will send me the instructions for transferring funds to their company bank. Payment will be initially 30%, the remainder a couple of months later. The total is ~ €6500.

I'm sure Fidelity handles foreign bank transfers. But I don't know the fees involved or yet how to set such a thing up.

Is this something that I should try to do via TransferWise? And do I set up an account with them?

It's all very mysterious to me.

Thanks for any help.

Audrey

Audrey.

As you were interested in Fidelity's process, I just ran across this article:

https://thefinancebuff.com/free-international-wire-transfer-fidelity-vanguard.html


omni

 

[audreyh1]

A few years ago, I suspected my credit and ATM cards were playing fast and loose with the currency exchange rates, so used a bunch of different cards and compared the rates when I got home. No smoking gun; all the cards used rates that were within the daily range. Maybe they cherry picked the range, but that is tiny compared to FTFs of 3.5% that's on one of my cards. That's not to say wire transfer or someone else's card company would also come out clean, but they'd risk getting exposed because it's all there, in black and white.

I wasn’t talking about credit or ATM card fees. I was talking about international bank to bank wire transfers or ACH transfers and the exchange rate they use which usually includes a hefty markup.

 

[audreyh1]

Audrey.

As you were interested in Fidelity's process, I just ran across this article:

https://thefinancebuff.com/free-international-wire-transfer-fidelity-vanguard.html


omni

I’ve actually been through Fidelity’s process.

The author thought that the transfer was completely free to them. What they did not realize was that they were getting a poor exchange rate. Fidelity goes through JP Morgan Chase for foreign transfers (correspondent bank). Someone in there is marking up exchange rates around 3%.

 

[catotx]

I’ve actually been through Fidelity’s process.

The author thought that the transfer was completely free to them. What they did not realize was that they were getting a poor exchange rate. Fidelity goes through JP Morgan Chase for foreign transfers (correspondent bank). Someone in there is marking up exchange rates around 3%.

Not really. The tour operator wanted U.S. dollars.

 

[audreyh1]

Not really. The tour operator wanted U.S. dollars.

OK, I obviously missed that. But the OP was talking about doing bank transfers that involved currency exchange. That’s usually the gotcha.

 

[OldShooter]

OK, I obviously missed that. But the OP was talking about doing bank transfers that involved currency exchange. That’s the gotcha.

That's why, as I mentioned, I always wire dollars and let the recipient worry about currency conversion.

If the recipient bills me in local currency I will use today's published market exchange rate and add a little bit. For example, CNN's rate today is $1.10/€ so I would probably use $1.12. No one has ever complained about this.

(In some countries/some cases I'm pretty sure the dollars I send are getting converted on the black market and the recipient is making some money. Not my problem to worry about.)