With who and how you transfer your money can have a profound effect on not just the exchange rate you receive, but also the service you experience. If you have a requirement for transferring money, either in or out of South Africa, the below advice on Money Transfers South Africa will prove invaluable.
Options for Money Transfers South Africa
There are various options for transferring money to and from South Africa, with the vast majority of money transfers being conducted by either banks or by currency transfer specialists sch as Incompass.
Traditionally money transfers have been the remit of the banks, but more and more countries have seen increasing growth in the number of currency companies or brokers offering specialist services.
Whilst specialist currency companies are a relatively new industry in South Africa – it has seen an exponential growth of customers using their services in the last year or two. A simple search on the internet will confirm that the vast majority of experts in this field recommend the use of a currency company over a bank – but why?
Using the services of a currency company in preference to a bank normally boils down to two key elements:
1. Costs – Why is a currency company cheaper than my bank?
Always a good question, after all currency companies are getting their currency exchange rates from banks as well.
Banks will do many small money transfers each and every day and each transaction they perform is treated as an individual transaction. On each transaction the bank will have a spread (the difference between what they buy the currency for and what they sell the currency to you for). In addition they levy their money transfer service with additional fees on top of this.
On the other hand currency companies will trade a large amount of currency per day that gives them access to lower spreads and they do not levy individual charges on each transaction (subject to minimums). By pooling money together and exchanging a bigger amount, currency transfer companies are getting better exchange rates.
It is typical for a bank to have a spread of Interbank plus 2.5% whereas currency companies are more in the range of 0.4% to 1.5%.
2. Service – How will I get better service than my bank offers?
- Typically a call to your bank will result in a bit of a wait whilst they access the right person. Often to perform your money transfer you will be required to come into the bank and see someone. Even this does not means they can provide you with an exchange rate there and then.
- The complication of exchange control regulations in South Africa also means accessing the right advice is difficult. Often staff are not trained in this area and furthermore they will require you to obtain and supply them with a myriad of tax clearances, invoices etc before any exchange can take place.
- Banks tend to be reactive in their approach – meaning a request from you to them to ‘please call’ when a certain exchange rate is reached will go unheeded.
- They are geared towards a one stop service approach and unless you transfer substantial amounts each month they provide you with their ‘boxed’ product and service levels. Try asking your bank to come to your company to discuss the R1 million rand a month you need to transfer for suppliers.
- It remains just a part of their business and is not their core focus, banks market to obtain depositors, loans, credit card and other such things.
- A call to Incompass will see you in immediate contact with one of our currency experts. The expert you will talk to can provide you with registration, exchange control regulation advice and currency rates. There is no requirement for you to come into our offices but you are of course welcome to visit us.
- Our team is well versed on the impact of exchange control regulations. Unlike some banks who have told many of the clients we have assisted that they cannot transfer their money out of South Africa, we have been able to assist.
- We believe in being proactive not reactive. We are more than happy to monitor the movement of a currency rate and inform you accordingly.
- We understand that individuals and companies using our services may have different needs. We are happy to discuss your requirements in full and also offer businesses a free consultation to better understand their needs and tailor solutions.
- We specialise in currencies, we do not supply a myriad or other banking services. Meaning our team is able to focus their efforts and development in ensuring our service and knowledge is always first class.
There are exceptions of course. but in the majority of cases the specialist currency brokerage wins, as they are bespoke in dealing with foreign exchange. They are more than likely to achieve a better exchange rate and provide you a better service than the department of a bank, who have a number of other interests.
So for advice on Money Transfers South Africa and obtaining the best rates and service contact Incompass today and join the thousands who have learned the smart way to transfer their money.
To find out more about how we can help you with your money transfers needs call us on any of the numbers below or send us an e-mail.
Ph: Cape Town +27 (0) 21 424 2936
Ph: Johannesburg +27 (0) 11 234 4275