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International money transfers: barriers and tips

Financial Foundation

International money transfers: barriers and tips

DNBC Team DNBC Team

Nov 23, 2023

Table of Content

No one can deny the essentials for international money transfers. You can send money to family and friends abroad. You can do business transactions, manage assets, education and travel expenses. Also, you can donate, buy online and make international payments. Yet, they come with some challenges.

We will explore some common barriers in making international money transfers. We will also provide some tips on how to overcome these barriers and make the most of your money transfers.

Challenges in international money transfers

There are several factors you need to cover in sending and receiving money from overseas:

Regulatory compliance

Different countries have different laws and regulations about money transfers. They include anti-money laundering (AML), counter-terrorism financing (CTF), and foreign exchange controls.

The EU’s General Data Protection Regulation imposes strict data protection requirements on businesses. It processes personal data of EU citizens, regardless of their location. This can be challenging for foreign companies to follow.

The EU has various sector-specific regulations, such as those for financial services. They can create barriers to entry for foreign companies in these sectors.

Different countries have different laws and regulations about money transfers.
Different countries have different laws and regulations about money transfers.

The UK has a regulatory body for financial services (Financial Conduct Authority: FCA). The FCA’s rules can be onerous for financial institutions. This can increase costs and reduce competition.

The UK has its own data protection regulations, which are like the EU’s GDPR. These can be hard to follow, especially those that operate in many jurisdictions.

The Canadian government reviews foreign investments to ensure net benefit to Canada. This can be a lengthy and uncertain process for foreign investors.

We’re required to check like Know Your Customer (KYC) and Anti-Money Laundering (AML). These checks take time and can make transfers cost more.

Currency conversion

International money transfers usually involve converting one currency to another. This can incur fees and exchange rate fluctuations. The fees can vary depending on each provider, amount, destination, and transfer method.

When you send money worldwide, the value might change because exchange rates can go up or down.

When sending money worldwide, the exchange rates can go up or down.
When sending money worldwide, the exchange rates can go up or down.

This is more likely if there’s a gap between starting and finishing the transfer. Also, in some places, it might be hard to use certain currencies. This makes transfers more limited and costly.

Security risks

International money transfers can be vulnerable to fraud and scams. This is because the process involves many intermediaries and is difficult to track.

Hackers often target money transfer providers to steal customer information and funds. Data breaches can expose sensitive personal and financial details. They include account numbers, passwords, and transaction histories.

Watch out for fake websites or emails pretending to be real money transfer services. They trick people into giving away login details or money info. Be cautious and double-check if something feels suspicious when you send money to another country.

International money transfers can be vulnerable to fraud and scams.
International money transfers can be vulnerable to fraud and scams.

These are scams that use people as intermediaries to transfer illegal money. The scammers may ask them to receive money from a fraudulent source and then send it to another account. This way, they hide the origin and destination of the illicit funds.

The person you’re sending money to needs to have strong security. They also need to be careful with their login details. Otherwise, someone unauthorized might get in and take the money. So, it’s important to use strong security measures.

Service availability

International money transfers depend on the availability and reliability of various service providers. They can be banks, money transfer operators, online platforms and mobile wallets.

These service providers may have different coverage, network, speed, security, and service standards. Some money transfer providers can’t work in some places due to laws or unstable politics. It means they might not be an option in those areas.

Money service providers have different coverage, network, speed, security, and service standards.
Money service providers have different coverage, network, speed, security, and service standards.

It’s crucial to find solutions for challenges in international money transfers. Making them easier, faster, cheaper, and safer benefits everyone involved.

Tips for overcoming these barriers in transferring money internationally

Transferring money abroad may become troublesome if you aim to steer clear of high fees. Additionally, unfavorable exchange rates can add to the complications. Moreover, delays further contribute to the challenges of the process.

Here are some tips for overcoming these barriers and sending money abroad with ease.

Compare different providers and options

Different options for sending money abroad may have different advantages and disadvantages.

You can use online calculators to see how much each option will cost. You can then pick the one that meets your needs and budget.

Plan ahead and avoid urgent transfers

Sending money abroad quickly can be costly and inefficient. You may have to pay higher fees and accept a lower exchange rate.

Plan ahead and avoid urgent transfers
Plan ahead and avoid urgent transfers

To avoid this, try to plan your transfers ahead of time and use regular or standard delivery options. They are usually cheaper and still reliable.

Check the recipient’s details carefully

Stay informed about your spending, track transfer statuses, and address disputes promptly. This ensures effective management and resolution of concerns that may arise.

To avoid problems, double-check the recipient’s information before confirming the transfer. Additionally, ask the recipient to confirm once they’ve received the money.

Keep track of your transfers and receipts

Keeping a record of your money transfers can help you in many ways. Keep track of your expenses, monitoring how much you spend. Check the status of your transfers regularly for updates. If any problems or disputes arise, address them for a smoother experience.

Try to save all of the transfer details: date, amount, fees, and recipient’s information…. This helps track and verify your transactions efficiently.

Be aware of the risks and regulations

When you transfer funds overseas, some risks can be fraud, scams, currency fluctuations and taxes. To ensure safety, opt for money transfer services licensed and reputable.

Adhere to their regulations and guidelines to enhance the security of your transactions. Promptly report any suspicious activity to further safeguard both yourself and your finances.

DNBC Financial Group in transferring money internationally

DNBC offers a smooth and safe experience for sending money across borders. The platform verifies every transaction to prevent illegal financial activities. It also ensures transparency and trust. This is how we deliver high-quality and reliable international money transfer services.

DNBC offers a smooth and safe experience for sending money across borders.
DNBC offers a smooth and safe experience for sending money across borders.

We follow the anti-money laundering laws in all our global financial activities. We protect every transaction from illegal financial practices. Transactions undergo verification to prevent illegal activities, and fees are transparent and fair.

DNBC Financial Group is your trusted provider in international money transfer

Note: The content in this article is for general informative purposes only. You should conduct your own research or ask for specialist advice before making any financial decisions. All information in this article is current as of the date of publication, and DNBC Financial Group reserves the right to modify, add, or remove any information. We don’t provide any express or implied representations, warranties, or guarantees regarding the accuracy, completeness, or currency of the content within this publication.