We all know young science nomads are not paid with a huge paycheck. And sometimes facing a high cost of living in the new society where you are working. But some of us still want to transfer money across the border for reasons like supporting family or paying a student loan. Already with the currency exchange fee, this is quite troublesome in the case of sending regularly a small amount of money. So let me show some tips about the international money transfer.
Let’s say I want to send some money to support my family. Then the first obvious option is trying my local French bank for international transfer. Sadly to the outside of the EU, it is not an easy fee. Let’s say I want to send 400 euros to Korea. My current bank offers 30 euros fixed fee for a transaction. It is quite significant compared to the money I want to send. So bigger the amount the better.
If you are lucky, then maybe one of the banks from your home country has a local branch in your foreign habitat. Or a special partnership. In that case, you would expect much better deals, with possibly better language support even.
I could use other relatively new Fintech company doing international transfer like Transferwise. Here for the same 300 euros with 6 euros fee. Although you have to check how much of exchange rate they offer, surely this is a better deal. If I want to send 4,000 euros than it is the opposite case. Because this company charges you the fee in relation to the total amount. How this company works is interesting. As far as I understand they have sizable cash deposits in each country and then when customers from both countries sending demands for exchanges they match them. let’s say I want to send money to Mr Kim in Korea. Then this company receive euros from me and put them in French deposit. Mr Kim will receive KRW from Korean deposit. Then this unbalance of each deposit will be even out later, when Jisu in Korea wants to send some money to Pierre in France. While doing this they earn money with fees. I think you can find numerous companies are doing similar business, like OFX, Xoom or more well know Western Union.
Some people would prefer the person to person exchange. Something equivalent to what Transferwise does but with people you already know or trust. ‘A’ could do transfer Korean currency from A’s Korean account to a Korean account of person ‘B’. And ‘B’ does the equivalent transaction but in French account to match it. Anyway, the advantage of ‘person to person exchange’ is clear, the charge would be minimal and you can even avoid a currency exchange fee. But I think it is in a grey area, might be illegal depending on where you live (especially the amount of exchange is relatively big).
Especially the US, having two accounts of Paypal for the US and the other country could be a neat way. Because an exchange between two PayPal account is rather not aggressive for a small amount of transfer. To do this you need two credit cards from each country.
Sometimes it might be better bringing cash with you when you visit your home country for vacation. Each country has a different law, but I think the amount of cash you can move without additional tax is around 10,000 USD worth. Without saying, we have to be careful with moving that amount of cash with us.
It depends on how much, how frequently you want to move. And also where to where. With emerging Fintech industry and Cryptocurrency recently, this post might lose its merit quite soon. But I hope it is useful to some nomads, who are not keen on money like me.
* updated 2021 MAR 9th.
If you are living in the UK or European Economic Area (EEA), you might want to check new online banks (so-called challenger bank), such as Monzo, Starling, Revoult, n26. They seem to offer quite attractive services like zero account fee. Especially if you have to send or spend currencies across the border, like wanting to pay EUR with GBP account, withdrawing EUR in France with the UK account. Some of them offer no service fee for this kind of transactions.
‘Monzo’ and ‘Starling’ are for people who have an address in the UK. ‘N26’ for EEA residents. ‘Revoult’ covers a wider target, the European Economic Area, Australia, Canada, Singapore, Switzerland, Japan and the United States.
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