It wasn't until 2022, over two years since the beginning of the COVID-19 outbreak, that travel began opening back up around the world. Whilst some countries have doubled down on zero covid (most notably China) much of the world has accepted the virus to be endemic and something we have to live with, to some extent, with the likes of Thailand and Vietnam now having almost no entry requirements.

Whilst expats around the world could remain in their currently settled countries, it was a matter of whether you were already in your desired destination before lockdowns. But with the doors opening up, few people are worried about them shutting again - particularly within Europe - meaning that flights are on the rise and digital nomads are back in business.

This highlights another issue, though, which is something that is often overlooked. With the rise of expatriating and traveling comes an increase in cross-border payments and currency exchanges. We all know that not all exchange rates provided by currency companies are the same (most of us have been exploited by the airport stalls), but it can be confusing to differentiate them online when they use verbose language and have unclear quotes.

We often just search for which company is crowned "best" when it comes to exchanging money, but it's not always a one-size-fits-all. There's nothing wrong with shortlisting the "best" companies, but we need to go a step further if we want to avoid chucking hundreds of dollars down the drain each year in fees and poor rates.

Step 1: Determine which type of client are you

Before we look outwards, we must first look within. Not necessarily in a spiritual way; we literally need to assess what type of client we are so we know who the company is catering to (and if we are that). One of the major reasons why there is no single best company is because two great companies can be great at different things - and only one may be relevant to you.

There are often just two types of clients: someone who:

• Makes regular small payments (client 1)
• Makes infrequent large payments (client 2)

If we take client 1, this is more likely to be someone who spends their money day-to-day overseas using a debit card. They may send and receive frequent small amounts (a couple of hundred dollars and below), and perhaps don't require any sophisticated solutions beyond handling their pensions/income and current living costs.

Generally, client 1 is better off looking at money transfer companies like Remitly or Wise because they're super easy to use and are ideal for regular monthly exchanges (i.e. pension/income) and handling multiple currencies in different virtual accounts. You receive money into a virtual euros account, shift that money to dollars within seconds, and use an ATM abroad in a way that will avoid being exploited by their dreadful exchange rates.

Client 1 is more likely to opt for convenience, low fees, and a good exchange rate. Client 2, however, should look beyond a slick, easy-to-use app and see if the company offers a dedicated dealer, hedging products, and an exchange rate that becomes preferential with larger volumes.

Client 2 is more likely to be an investor, business owner, a wealthy expat, or someone buying a home overseas. A large, one-off purchase of a house or dealing with big payments to business suppliers can require a more sophisticated and bespoke service; someone that is willing to put your safety first and make sure the transfer is optimal.

Client 2 should disregard worrying about minimum transfer amounts and accept the fact that you may have to execute transfers over the phone, focusing more on brokerages like Currencies Direct and Global Reach, which can help bring experience and bespoke service to your investment or large transfers. These brokerages can tell you when to transfer, how to, if you could make use of hedging products, and even provide treasury management.

Of course, you could be a hybrid of both clients, but it would be a mistake to search for one company that does it all. Why? Because all of the great companies are free to use (i.e. no subscription costs). Signing up can take a matter of minutes, thus it is better two have accounts at two different companies that specialize in different areas than to find a Jack of all trades, master of none.

Step 2: Compare rates

Both client 1 and client 2 share something in common, which is that they want to waste the least amount of money in fees as possible. So, finding the companies with the best exchange rates and lowest fees is ideal for all.

The solution for client 1 is more simple, as they must simply find the companies with the lowest exchange margins that have no fees and small minimum transfer amounts. For client 2, they shouldn't be put off right away by fixed fees (i.e. $4.99 per transfer) because this dwindles in significance the larger the transfer is.

Transparency in regards to exchange rate markups is ideal, but not always possible. For client 1 it is easier, as money transfer companies claim they provide consistent markups/fees, so you needn't check if you're getting ripped off each and every transfer. Plus, many at the very least provide example quotes before signing up.

Brokerages, which focus on larger transfers are often less open, but for good reason. This is because the rate often becomes more preferential the larger the transfer is, which is a good sign, as well as the process being a little more manual.

However, if this bothers you and you find yourself being offered subpar rates, you can often request a call back in an attempt to get reduced fees. Brokerage will often make an effort to match (or beat) competitors. So, there's an upside and downside when it comes to this less transparent, more "improvised" way of quote creation.

Step 3: Avoiding SWIFT

It's uncommon to hear the word "SWIFT" in the same sentence as "the best money transfer services" - the two decoupled long ago. SWIFT was once the best way to transfer money abroad as it was incredibly safe, and the technology of overseas payments was still new.

Today, SWIFT dominates bank transfers still, but it's not the only way. Most of the top international money transfer companies have multiple methods of sending money instead of relying on one, centralized method. Big providers like Wise, OFX, and Currencies Direct all have multiple bank accounts around the world, meaning they can facilitate your transfer by crediting one account and paying the other account domestically.

P2P payments, among others, are a way to avoid intermediary fees, which are a big reason why banks are no longer the best online money transfer method. In a sense though, it doesn't totally matter to you what method they use, providing it's competitive and secure. But, it's worth knowing that companies that rely on SWIFT rarely have the best rates for international transfers.

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