Harry Scherzer, CEO, Future Forex.

There are any number of reasons why you might need to make an international payment that involves exchanging rands for a major foreign currency such as the US Dollar, Euro, or British Pound. Maybe you’ve got a business that imports goods from overseas or paying an intercompany transfer. Alternatively, you might be emigrating, moving your pension abroad or purchasing an offshore investment property. Whatever your reasons, it should be a given that you want the best service and price for your transaction.

But how do you go about finding a foreign exchange provider that meets these two needs? The answer lies in identifying a provider that puts a premium on customer service and which, by extension, is completely transparent in its pricing.

Don’t count on your bank being the best bet

The obvious temptation, of course, is to simply make international payments through your bank. After all, you trust them with most of your other financial transactions, so why not this avenue too? While all major banks do offer forex services, they may not be the best bet when it comes to making international payments. In fact, there’s a very real risk that you’ll come out the other side feeling overcharged and underserved.

Let’s start with how the bank handles customer service. Even if you’re on one of your bank’s highest tiers, you’ll probably experience a fair amount of frustration if you have a currency exchange query. Given the complexity of most of these kinds of queries, you’re probably not going to want to use the bank’s chatbot (if there is one available).

That leaves you having to call its contact centre. After hopefully steadily moving through the queue, all the while being told that the bank’s experiencing high call volumes (when isn’t it?), you’ll likely be pushed from pillar to post. And even if you do reach the right representative, they may not be able to properly help you. That inevitably means you have to go into the bank, where you’ll have to stand in more queues and fill out reams of paperwork. Of course, banks do offer forex services on their apps and websites but they’re only useful for extremely straightforward transactions, and assume that you have all of the knowledge and approvals necessary to make the transfer.

All in all, going through your bank means that you’re likely to end up stressed, frustrated, and feeling like you’re just another number to it.

Seeking out the personal touch

Fortunately, there is an alternative. Rather than relying on your bank, you could seek out an independent forex provider. Not all such providers are created equally, however. Ideally, you should look for one that places a premium on customer service and offers clients a dedicated account manager.

That account manager should understand the nuances of currency exchange and international money transfers. They should also understand the ins and outs of what’s required for both individuals and the specifics of certain industries for businesses. Moreover, the account manager should be readily available on the channel of your choice, be that email, WhatsApp, or phone call.

Your account manager shouldn’t just be there to help you out when you have specific queries either. They should also be able to educate and assist you through the entire international money transfer process. That includes everything from onboarding to guiding you through regulatory aspects such as an Approval of International Transfer (AIT) if you’re transferring more than R1 million. They should also be able to help you complete the Reserve Bank’s mandatory Balance of Payment (BOP) forms. Ultimately, these capabilities should take the hassle and queues out of your hands and make forex feel simple.

Transparency is key

But personalised service isn’t the only thing that’s important when choosing your forex provider. Pricing plays a role too. Or, more specifically, transparent and competitive pricing.

This is another area where banks frequently fall short. Let’s say you’re converting rands to pounds because you’re moving over to the UK or you’re looking to bolster your offshore investment portfolio. The bank will probably be open about certain fees that it charges, for example the processing fee. But it likely won’t be upfront about the exchange rate margin, or spread, it applies to each transaction. This fee comes in the form of providing a client with an unfavourable exchange rate, and taking the difference between the rate provided to the client and the spot rate at the time of the transfer.

This fee typically forms by far the biggest cost to a client when performing a forex transaction, yet clients often don’t know it exists. The trouble is that banks often apply it inconsistently and in an untransparent way, which leaves customers paying more than they should on a transaction.

By contrast, if a forex provider is upfront and transparent about the fees it charges, you know that you can trust and build a relationship with that provider. Importantly, you’ll also likely end up paying less on each transaction than you would with a bank.

So, next time you have to make a big international payment, forget about your bank and find a provider that understands your individual needs, offers impeccable service and that can be trusted to give you the best possible rate on that transaction.