In a world where you can make near-instant payments for almost anything, you’d expect that international payments and currency exchanges would be equally seamless.
But for a variety of reasons, including shortcomings in the international forex system and the practices of many traditional forex providers, you may well encounter unforeseen issues when you make an international money transfer.
Whether it’s processing delays or funds not arriving entirely, both can put a handbrake on your international transfer. And for individuals and businesses alike, those delays can be costly and not only due to exchange rate fluctuations.
A South African who wants to put down a deposit for a house in Dublin, for instance, might have to move money across to Ireland in a hurry. An import business, meanwhile, might risk losing out on an important goods consignment if it can’t pay quickly enough.
Fortunately, there are ways to mitigate against these unforeseen issues. And even when that mitigation doesn’t work, the right international payments provider can help you seamlessly navigate them.
Understanding the unforeseen
Before looking at how that might happen, it’s worth understanding why unforeseen issues arise with international money transfers.
As I’ve already mentioned, these issues typically boil down to the practices of traditional international payment providers and longstanding shortcomings in the international forex system.
In the case of the latter, the lack of a central regulator is just one example of an inherent weakness. It can, for instance, lead to disparities in regulatory frameworks across different jurisdictions and may make it challenging to enforce uniform rules.
The involvement of multiple banks and the use of legacy banking systems, meanwhile, can result in prolonged settlement times.
This, in turn, can lead to delays in fund transfers. Having to be compliant with a variety of regulatory requirements can also be complex and time-consuming, mainly due to the strict exchange controls in South Africa. This can result in additional paperwork, delays, and increased costs for financial institutions and users.
Banks will pass the buck
Unfortunately, when these kinds of unforeseen events occur and cause payment delays or even cancellations, banks and other traditional payment providers won’t rush to help their clients. Many of them will throw the problem right back at the client.
That forces them to either become forex experts themselves (and no one gets into electronic imports, for instance, for that reason) or to hire an expert, adding time and cost to the transaction.
Banks doing so isn’t actually that surprising either. Many South African banks especially don’t do well when it comes to customer service and international payments. Anyone who’s ever had to call up a bank’s contact center knows all too well how painful it can be.
Inevitably, you spend hours getting pushed from pillar to post. And even when you do get through to someone who says they can help, there’s still a good chance they’ll give you the wrong advice. That’s painful at the best of times but is doubly so when you’re completing an important international payment.
It’s also worth remembering that most banks charge more than they should on forex transactions. On a big enough payment, a customer could end up handing over tens of thousands of rands more than they should.
Mitigating and navigating with the right partner
Fortunately, choosing the right international payment provider can go a long way to helping individuals and businesses alike mitigate against those issues and navigate them with relative ease.
Ideally, they should look for a provider that prioritises customer service and transparency. The former ensures that your international payment needs will be fully met, while the latter ensures that you don’t have to deal with any unforeseen costs and can come out paying less than you would with a bank.
Moreover, the account managers you deal with at that provider should have deep knowledge of the international payments space and be able to help you through any issues you might have.
The payment provider’s processes should also be as streamlined as possible, ensuring that once you’ve made the payment, you can sit back knowing that it will be completed quickly. Additionally, it should have a compliance team that will facilitate any required paperwork as a complimentary service so that you don’t have to worry about it.
The unforeseen isn’t the customer’s problem
Ultimately, it’s important to remember that, while unforeseen issues can arise around international payments, it shouldn’t be left to customers to try and resolve them. Unfortunately, banks have been under-servicing their currency exchange customers for far too long.
By using an independent payment provider that puts customers first and which resolves issues on its own, both individuals and businesses can save themselves time, money, and stress. In today’s world, and in the international payments space especially those are all invaluable resources that should be treasured.
By Harry Scherzer, CEO, Future Forex