5 Common Mistakes When Making International Payments and How to Avoid Them

Making international payments isn't just about sending a wire transfer. It can sometimes feel like walking through a maze blindfolded, right? One wrong turn, and you might find yourself lost in a jungle of exchange rates, bank fees, and confusing rules. And let's face it, mistakes can be costly.

So, let's talk about the top five mistakes businesses often make when sending money across borders and, more importantly, how to sidestep these pitfalls. Whether you’re a globe-trotting businessman or just someone trying to send a little love overseas in monetary form, we've got your back. We’re here to make your journey in international payments less of a head-scratcher and more of a smooth sail.
 

5 common mistakes businesses make when sending money overseas

Hidden cross-border payment fees can be an unwanted surprise

Think the price tag is all you need to worry about? Think again! There's a whole bunch of sneaky charges that can creep up on you—like banking fees, service charges, and those mysterious 'additional costs' that seem to come out of nowhere. At first, they might look small, but add them all up, and you've got yourself a hefty extra sum, especially when you're dealing with big transactions.

Not figuring out the right time to send money

Currency rates are like a rollercoaster, always up and down, driven by global events that you can barely keep track of. If you wait too long or don't keep an eye on the market, the amount you end up paying can change big time. This is super important in big deals, where even a tiny change in the exchange rate can mean paying a lot more, or, if you're lucky, a lot less.

Not doing your homework

Every country's got its own way of doing things, from legal stuff to how they handle money. If you don't get to grips with these local traditions and processes, you could end up making costly mistakes or, worse, putting your reputation at stake if you're a business.

DIYing your payments and making currency conversion mistakes

When sending a payment overseas, it's tempting to handle everything yourself, thinking you'll save some cash on fees. But foreign exchange is a tricky matter, and going DIY without really knowing your stuff can backfire, leaving your wallet a lot lighter. That's why it can help to get help from an expert like MTFX that can guide you through the entire process.

Getting caught in double tax traps

Taxes are a always a tricky business, and they're different everywhere you go. Some places might have tax breaks to attract buyers from abroad, while others might hit you with big bills. And then there's the risk of getting taxed twice—once in the country where you're buying and again back home. You'd want to avoid that.
 

How to avoid cross-border payment mistakes

Choose your payment service provider wisely

Start your transactions with someone you can trust to be upfront about costs. Look for banks or services that lay all their cards on the table, showing you every single charge, you'll face. This way, you're in the driver's seat, making choices with your eyes wide open.

Be smart and forward-thinking

Get involved with services that offer forward contracts. This nifty option lets you lock in a good exchange rate now for a payment you'll make later. Also, stay on top of global financial news. Maybe even sign up for a service that specializes in currency trends so you're always in the know.

Research financial practices of the target country

Take the time to really get into the nitty-gritty of local practices. Chat up local real estate experts or consultants who know the ins and outs. And don't forget about online communities! There are loads of forums where people share their experiences and tips about sending money abroad.

Consider professional advice an investment, not a cost

Seeking assistance from a foreign exchange expert might seem like just another expense, but their know-how can actually save you a bundle in the long run. They're the ones who can tell you when to make your move, help you navigate through all the rules, and plan out your finances strategically.

Plan for taxes to stay one step ahead

Link up with local tax attorneys or legal experts who really understand the laws. They'll break down all the tax stuff for you, making sure you're not blindsided by unexpected costs. This way, you're fully prepped for any tax scenarios that might come up.

MTFX - Instant international money transfer with complete peace of mind

International payments can be complex, but MTFX makes it simpler, safer, and more cost-effective. Instead of your conventional international wire transfer, here’s how MTFX makes your global payments easier:

Transparent fees: With MTFX, what you see is what you get. We believe in complete transparency, ensuring that you are fully aware of any fees or charges upfront. This clarity helps you avoid unexpected costs and make informed decisions.

Bank-beating exchange rates: We understand that timing and rate are everything in currency exchange. MTFX offers competitive exchange rates and the option of forward contracts, allowing you to lock in rates for future transactions. This service helps you manage market volatility and plan your finances better.

Local expertise, global reach: MTFX brings you the benefit of local insights with a global perspective. Our extensive network and partnerships with local experts provide you with the nuanced understanding necessary for international transactions. Whether it’s buying property overseas or managing business transactions, MTFX equips you with the right knowledge.

Exchange rate tips: Our team of experts at MTFX is always ready to guide you through the complexities of foreign exchange. With personalized consultancy, we help you navigate regulatory compliances, optimize transaction timings, and strategize your financial planning effectively.
 

Send money anywhere, anytime with MTFX

And there you have it! While there are many ways to send money online, but with the right approach, it doesn't have to be. Remember, knowledge is power. By being aware of these common pitfalls and taking proactive steps to avoid them, you can make your international transactions smoother and more cost-effective. Whether it's seeking transparency in fees, identifying the right time, doing your homework, consulting with professionals, or planning for taxes, each strategy plays a crucial role in safeguarding your finances. So, go ahead, step into the world of international payments with confidence and the wisdom to make the best decisions for your financial journey.

Set up your MTFX business account today and start saving thousands of dollars every year.

FAQs

1. Does not exchanging currency before sending international payments a poor approach?

It can be a poor approach if the recipient's currency is stronger or expected to strengthen against yours. MTFX offers competitive exchange rates and could potentially save costs by locking in rates before making international payments.

2. Is it necessary to avoid weekends when exchanging your money from one currency to another?

Currency markets are closed on weekends, which means any transactions initiated will be processed at the next available rate when markets open. This could lead to unfavorable rates due to market gaps.

3. How to pay a foreign bank account in a cost-effective and secure manner?

Using a service like MTFX, which specializes in international payments, can be cost-effective due to better exchange rates and lower fees compared to traditional banks.

4. Is it better to transfer money in local currency or foreign currency?

It often depends on the recipient's preference and the relative strength of the currencies. MTFX recommends transferring in the currency that offers the best value and lowest cost after considering exchange rates and fees.

5. What are some key mistakes businesses make when sending money across the border?

Common mistakes include not looking for the best exchange rates, not checking transfer fees, and not fixing exchange rates ahead for recurring and frequent payments. Businesses might fail to use hedging strategies to manage currency risk like forward contracts ensuring more predictable and potentially lower costs.