What is international transfer

Renting a holiday home in Switzerland, money for friends in the USA, the ancient CD that can only be ordered from dealers in the Ukraine: more often than many people think, consumers transfer money abroad. Long banks have to pay for it, and the costs can quickly add up to 20 or 30 euros - even if the ordered CD hardly costs ten. "There were already one or two nasty surprises," says Ulrich Lohrer from the Catholic consumer service in Bavaria. What costs customers should pay attention to and how they can save.

Euro? Lucky!

The good news first: Anyone who wants to transfer euros to other European countries has been lucky. Customers can use the so-called Sepa transfer for this purpose. The advantage: within the European Economic Area (EU countries plus Iceland, Liechtenstein and Norway) this transfer may not cost more than a domestic transfer. "Many customers still fill out an international transfer instead of a Sepa transfer," says Karolina Wojtal from the Center for European Consumer Protection. "And that can really cost money." Because many banks say nothing when customers, for example, to Austria arrange an expensive international transfer instead of a cheap Sepa transfer. They prefer to secretly pocket the high fees.

Keep your eyes peeled at the exchange rate

Japanese yen, South African rand or Indian rupee: If you want to transfer money remotely, you have to choose the classic international transfer for better or worse. Each bank can set its own fees here. Some institutes charge a fixed price, some a percentage of the transfer amount, some design a whole thicket of fees. What they often conceal: The institutes also collect money from the exchange rate. Many banks do not convert euros into the foreign currency at the middle rate on the foreign exchange market, but instead set their own, often worse, rate for their customers. Even decimal places can have a significant impact: If a customer transfers 10,000 euros to New Zealand at an exchange rate from euros to New Zealand dollars at 1.72, the recipient receives 17,200 NZ dollars. On the other hand, if the bank uses a worse rate of 1.70, only NZ $ 17,000 would be received. That would be the equivalent of 115 euros less.

Know third-party charges

With international transfers, customers can vote and tick boxes - this is sometimes just as difficult as in the voting booth. Because for a foreign transfer, customers have to choose one of the fee systems OUR, BEN or SHA. With OUR the client pays all costs, with BEN the recipient pays everything, with SHA both sides share the costs. The problem: If you want to pay for CDs or craftsmen abroad, you usually have to transfer a fixed amount in the foreign currency. For example, exactly 300 Ukrainian hryvnia must arrive on the account of the Ukrainian CD dealer. The retailer will not want to bear the costs of the transfer - and he will not participate in it either.

The only thing left for the customer to do is grudgingly assume all the costs for the transaction and choose the OUR option. Because here the bank bills all costs separately. Mind you, not only your own costs, but also the so-called third-party fees of the recipient bank. Some banks in Germany charge a flat rate for this, which covers all costs of the recipient bank. Some simply pass the costs on to the recipient bank. No matter how, most of the time it gets expensive. Sometimes even 20 euros are charged - in addition to all other fees.

The Europe bonus

Polish zloty, Bulgarian lev, Danish krone: even in these non-euro countries, many people grab the foreign transfer form. And sometimes pay on top. Because many banks in the nine European non-euro countries accept Sepa payments. So far, they have only been possible in euros, but what many banks in Germany like to hide: Most banks abroad simply convert incoming euros, for example into Polish zloty. This can be worthwhile, especially with small transfer amounts, because it avoids the lavish fees for a conventional international transfer. However, customers should always ask the recipient bank whether they accept Sepa payments and convert them - and above all at what rate. Some banks convert incoming euros at poor rates, like the landlord, which is particularly important for large amounts.

Caution is also advised with Switzerland: It has joined the Sepa system, but not the European Economic Area. In other words: transfers in Sepa format are technically possible, but may cost more than a domestic transfer, which every bank handles at will. The same also applies to Monaco, San Marino and the British Crown Territories of Jersey, Guernsey and the Isle of Man.

Start-ups push down prices

Start-ups are now attacking the established banks with international transfers. Services like Transferwise often only charge a small percentage of the transfer amount. Exactly how much customers pay depends on the target currency. A transfer there costs no more than a few euros, especially for small amounts. But be careful: with large transfers, the percentage fee can become a curse. For example, if you send 40,000 euros to the USA, you have to pay almost 200 euros in transaction fees. And thus possibly more than with some banks. The exchange rates at Transferwise are mostly acceptable, however: The company converts to the so-called mid-market rate, which it receives from the data service provider Reuters. This rate is usually better than the exchange rates of many banks.

Enjoyed it well

Many cooperative banks offer their customers international transfers to the Czech Republic, Liechtenstein, Switzerland and the USA at lower prices. Because for these four countries they have their own transfer system called Tipanet. The advantage: With many cooperative institutions, such a transfer costs only 7.50 euros - and this usually covers both the costs of the German bank and the recipient's bank. This is usually cheaper than a conventional international transfer. However, customers already have to have their money converted into Czech crowns, Swiss francs or US dollars by the cooperative bankers in Germany - so they should find out about the rate.

But be careful: It is not easy to fill out the transfer form for the USA correctly. And some US companies reject such payments because customers could theoretically retrieve any payment via Tipanet for eight weeks. Customers should always get good advice and short-circuit with the recipient.