Debunking 9 Myths About International Money Transfers

International money transfers and foreign exchange have come a long way. The days of expensive, slow, and complicated cross-border payments are mostly behind us. However, many myths still persist. Let’s clear up seven common misconceptions and see how modern services are making global payments easier and more affordable.

Myth #1: You have to use conventional banks for global transfers

Many believe that traditional banks are the best way to handle cross-border payments but often charge high fees. There are better options out there. Specialized payment providers can offer lower costs and better exchange rates. For example, digital payment services are typically much cheaper and faster than traditional banks. A McKinsey report found that these services are, on average, 50% cheaper and three times faster. By choosing these alternatives, businesses can enhance their access to international markets while keeping costs down.

Myth #2: Global money transfers are always expensive

Many people think sending money internationally always costs a lot. But that’s not true! Fees can vary greatly between service providers. For example, while the global average cost of sending $200 was 6.3% in mid-2023, using specialized payment services can save you a lot of money. These services can offer exchange rates much lower than traditional banks, sometimes only charging between 0.4% and 1.9%. Imagine you’re a business owner who makes frequent transfers to different countries. By using a service with lower fees, you could save hundreds or even thousands of dollars annually.

Myth #3: FX rates only affect large money transfers

Don’t think that exchange rates only impact big money transfers. Even small changes in rates can add up over time. For example, if you make frequent smaller payments, a slight difference in exchange rates can significantly affect your overall costs. Using cost-effective international payment services ensures you get the best value for every transfer, no matter the size, helping your business save money. This is especially important for businesses with regular international transactions, as savings from lower rates can accumulate quickly.

Myth #4: International payments are always complex

Another common belief is that managing international payments is always tricky. Thanks to technology, it’s now much simpler. You can send money abroad with just an internet connection and a multi-currency account. Leading service providers support transactions in various currencies, making global transfers seamless. For example, many businesses now use online platforms to pay suppliers and employees in different countries with just a few clicks. Deloitte found that 45% of businesses already use online platforms for cross-border payments, highlighting how user-friendly these systems have become.

Myth #5: You can somehow manage exchange rates

Some people think they can fully control foreign exchange rates. But, exchange rates are affected by many unpredictable factors like political events, economic news, and global trade relationships. While you can’t control the market, you can use tools like forward contracts to lock in favourable rates for future transactions. Also, agreeing to use a currency both parties are comfortable with can help manage risks. For instance, if you know you’ll need to make a significant payment in six months, a forward contract can secure today’s rate, protecting you from potential adverse changes.

Myth #6: You have to pay global suppliers in USD

It might seem easiest to pay everyone in USD, but that’s not always the best choice. Paying in your vendor’s local currency can simplify things and even save money. For example, a Canadian company paying a supplier in Europe might get better terms by paying in euros rather than USD. Multi-currency accounts let you hold and manage funds in different currencies, so you don’t have to worry about costly conversions. Plus, paying in the local currency can often lead to better terms and prices from suppliers, as they avoid the hassle and costs of currency conversion.

Myth #7: International transfers take too long

There’s a misconception that sending money internationally always takes a long time, sometimes even weeks. However, with modern payment solutions, transfers can be completed within hours or even minutes. Digital payment platforms leverage advanced technology and a network of global banking partnerships to expedite the process. This speed is crucial for businesses needing to pay suppliers quickly or respond to urgent financial needs. By opting for these innovative solutions, you can significantly reduce the time it takes to complete international transactions, improving efficiency and cash flow management.

Myth #8: Only large businesses benefit from international payment services

There's a belief that specialized international payment services only benefit large corporations. In reality, small and medium-sized enterprises (SMEs) can also benefit significantly. These services offer competitive exchange rates, lower fees, and tools that simplify managing cross-border transactions, helping SMEs expand their global reach without incurring high costs. For instance, an SME importing goods from various countries can save substantially by using a specialized provider rather than a conventional bank, enhancing their profitability.

Myth #9: You need separate bank account for every country

The idea that you need a separate bank account in every country is outdated. Modern multi-currency accounts let you manage funds in over 25 currencies from one account. This means you can collect, hold, and transfer money in different currencies without opening multiple bank accounts. For example, a company in Europe, Asia, and North America can handle all its transactions from a single account, simplifying financial management and reducing administrative burdens. It’s a convenient way to handle international business without the hassle.

Streamline your international money transfers with MTFX

When it comes to international money transfers, MTFX stands out as a trusted partner for businesses and individuals alike. Here’s how MTFX can make your global transactions smoother, faster, and more cost-effective:

Competitive exchange rates

MTFX offers highly competitive exchange rates, often much lower than those provided by traditional banks. By leveraging interbank rates, MTFX ensures you get the best possible value for your money. This can result in significant savings, especially for businesses that make frequent or large international transactions.

Low fees

One of the primary advantages of using MTFX is the low transaction fees. Traditional banks often charge high fees for international transfers, but MTFX keeps costs down, making it an affordable option for both individuals and businesses.

Speed and efficiency

Time is money, and MTFX understands this. The platform ensures that your funds are transferred quickly and efficiently. With MTFX, you can expect faster processing times compared to many traditional banking services, helping you meet your financial commitments without delay.

User-friendly platform

MTFX’s online platform is designed to be user-friendly and accessible. Whether you’re a business managing multiple international transactions or an individual sending money to family abroad, the MTFX platform makes the process straightforward and hassle-free.

Multi-currency accounts

With MTFX, you can manage multi-currency accounts, allowing you to hold, receive, and transfer funds in various currencies. This flexibility can help you avoid unnecessary conversion fees and provide more favourable terms when dealing with international partners.

Risk management tools

Foreign exchange markets can be volatile, but MTFX offers a range of risk management tools to help you navigate these fluctuations. Services such as forward contracts allow you to lock in exchange rates for future transactions, providing stability and predictability for your financial planning.

Simplify your global payments and international money transfers

In the ever-evolving world of international money transfers, staying informed and choosing the right service provider can make a significant difference. The myths surrounding cross-border payments—such as high costs, complexity, and the necessity of traditional banking—are being debunked as technology and specialized services revolutionize the industry. By understanding the realities behind these myths, you can make more informed decisions that benefit your business or personal finances.

Modern solutions, like those offered by MTFX, provide competitive exchange rates, low fees, speedy transactions, and user-friendly platforms that simplify sending money internationally. Whether you're a business owner managing global transactions or an individual sending funds to loved ones abroad, leveraging advanced tools and services can help you save time and money. MTFX stands out as a reliable partner in this journey, offering the expertise and support needed to easily handle the complexities of international payments.

Create your MTFX business account today and stop overpaying high bank fees and inflated FX rates on global payments.