Our friends and loved ones are a gift and we want to stay in touch with them. But say you have a friend in London and want to send them money for an upcoming celebration—how do you figure out the best way to go about it? Wherever you are in the world, it’s easy to feel stumped by the small text and hidden commission fees when transferring money abroad, especially if it involves switching from one currency to another. Stress no more—here’s a handy guide to help you save money when making international money transfers.
How can you send euros abroad?
Launched in 2008, the Single Euro Payments Area (SEPA) is an initiative led by a group of European countries to standardize international money transfers across the Eurozone. It aims to reduce the time it takes for a transfer to come through, and keep the costs as low as possible. Sound good? Here’s the lowdown on the various types of SEPA transfers, and how to find the cheapest or fastest transfer option that suits you best.
What happens if you’re transferring money into a different currency?
Two elements come into play here—the real exchange rate on the market, and the commission that your bank wants to charge you. But first, what do we mean by the “real exchange rate”? Simply put, it’s the relationship between two currencies. For example, say you’re comparing the euro to the British pound. When you compare the two currencies, you’ll see how much one Euro is worth in British pounds, depending on the currencies’ market value. This rate is what we call the real exchange rate.
International transfers should be made at the real exchange rate. Unfortunately, some banks charge commissions on these transfers. What commissions do they charge? There are all kinds of commissions, which vary depending on which country you’re sending the money from, and whether you requested the transfer in person at a branch, or online. At N26, we’re committed to avoiding any hidden fees—which is why we’ve partnered with TransferWise.
TransferWise x N26
“Money without borders: instant, convenient, transparent, and eventually free.”
That’s the mission statement of TransferWise, a platform that provides fast international transfers without hidden or excessive commissions. Today, more than 8 million people use TransferWise. Every month, more than 5 billion dollars are transferred across the globe. And since 2016, N26 and TransferWise have been working together to revolutionize the way people manage their finances.
TransferWise technology is built into the N26 app, so you can easily send smart international transfers. TransferWise charges a minimum commission usually between 0.3% and 0.5%, depending on where you want to send money. For example, if you want to send €1,000 to the UK, the transaction will only cost you €4.58. You can see what a difference this makes when compared to traditional banks. Although a bank may state that there are no commission fees for transferring money abroad, they may not provide you with the real exchange rate, unlike N26 and TransferWise. This means that although your transfer may be sent without incurring extra fees, the recipient could receive a smaller sum by the time your transfer reaches their bank account—all because the bank hides the commissions within their less favorable exchange rate.
How does TransferWise work? Why is it so cheap?
There is no catch, guaranteed. Imagine that you want to convert euros into British pounds, and transfer them using TransferWise. The Wise system then looks for someone who wants to convert pounds to euros—that is, in the exact opposite direction. It identifies overlapping transfer flows, so that it’s as if the money never crossed a single national border. This avoids the common commissions charged by traditional banks for making international money transfers.
Transfers at the real exchange rate in 38 currencies
Together with TransferWise, N26 customers can make secure international money transfers at the real exchange rate in over 38 currencies—from any country and without hidden fees, as it always should be. All you have to do is log in to your N26 app, then tap on “Send Money”, followed by “Foreign Currency Transfer.” Simply select your recipient, the currency, and the amount that you wish to transfer. For complete transparency, you’ll also be able to view a complete breakdown of the current exchange rate, your transfer fee, and the date that your transfer is expected to arrive, all before you confirm your international money transfer. No hidden fees, no hassle, no worries.
Banks that try to profit from commissions on foreign transfers have been warned—the new era of fair, transparent and efficient banking starts here.
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