As international borders are fading due to globalization and the internet, there are many occasions when you need to transact in foreign currencies, such as e-commerce, forex trading, traveling, and sending money to relatives and friends. And with today’s technology, don’t you know that bank transfer is not the only way to exchange currencies? In fact, it has been quite an outdated method.
Foreign Exchange Company
A foreign exchange company is a non-bank finance company that is specialized in foreign currency exchange. But why should you bother with entrusting your money to a non-bank entity? First, you should know that banks’ exchange rates are high. In Canada, for example, the rates are around 2.5% per exchange for USD! And most of the time, there are still hidden fees lurking in the transactions. Therefore, companies like KnightsbridgeFX enter the business to tackle those problems. Since they are specialized in currency exchange, their whole resources are allocated for exchange only. And that makes them able to afford better exchange rates.
However, make sure you read the reviews of the company first because ads can sometimes be misleading. Also, don’t forget to examine the terms and agreements before you make any transactions.
To get a quick picture of what payment gateways are, the best example of this enterprise is PayPal. This platform acts as the middle man who bridges buyers and sellers in the e-commerce world, regardless of the currencies they use. If a user commits a dishonest action, the gateway can ban the perpetrator and help the victim to recover the loss.
Alternatives to PayPal are Skrill, Transfer Wise, Google Pay, Payoneer, Shopify Payment, and WePay. But different platforms have different methods of depositing and withdrawing money. Some accept direct bank transfers, while others accept only credit cards. If you are using crypto-money, your choice may even be more limited. Therefore, you should check the gateway’s terms first.
This method may not be the cheapest compared to the previous two, but it surely is the most convenient. With credit cards issued by Visa, Mastercard, American Express, or Discover, you can withdraw money from any ATMs around the world, as long as they have the logos of the issuing companies. Therefore, this may be your best option for exchanging money during traveling.
As for e-commerce, credit cards can charge you 3% and more for transactions in foreign money. And the interest can be different from your regular use as well.