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Cheapest Way To Receive International Payments

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South Africa has an extensive population of foreign workers who support family members back home each month and there are some interesting and innovative ways they do this.

For example, Zimbabweans have an informal money transfer system that is based on a system of trust. Taxi drivers commuting from Joburg and the Western Cape will deliver rands in cash to family members back home – for a fee, which can be 5-10%. Family members in Zimbabwe would rather receive cash in foreign currency because of the ability to swap these on the black market at a better exchange rate than offered through the official banking sector.

Then there are more formal options:

Data from Monito suggests WorldRemit is the best service for sending R1,000 to Zimbabwe. By the time that money arrives in Zimbabwe, the recipient will receive $46.70 (R928) which means about 7% has been swallowed in fees. This transfer can be completed in minutes, with the recipient collecting at a WorldRemit agency with a transfer code.

What about sending money from abroad to South Africa?

Let’s see what happens when we transfer A$200 (Australian) to South Africa (the exchange rate as of May 2023 was R12.84 to A$1).

  • FiveWest comes out as the cheapest (less than 1%), with transfer taking place within a day. The company is cheapest on most transfers, including shipping money outside of SA.

  • SingX comes out as the next best transfer option, with the recipient collecting R2,564 using the company’s zero transfer fees on the first two transfers. Thereafter, the amount received would be R2,402, which amounts to a cost of 6.4%. The other advantage of SingX is that transfer happens on the same day.

  • CurrencyFair and XE are slightly more expensive, though CurrencyFair takes 1-3 days, while XE will effect transfer the following day.

  • WorldRemit will transfer the same day, but offers a worse exchange rate than SingX and will load a transfer fee of A$4.99 on top. The recipient will receive R2,470, which is equivalent to a fee of 3.8% - not bad.

  • Remitly offers a slightly worse exchange rate and loads a transfer fee of A$6.99 on top. The recipient gets R2,455, which equates to a cost of 4.4%.

Both WorldRemit and Remitly will effect transfer the same day. If you transfer larger amounts of money (say A$2,000), SingX and CurrencyFair come out on top mainly because there are no fees on the first few transfers (and in the case of CurrencyFair, no fees for the first three months).

Transferring funds from the UK Again, FiveWest comes out on top with costs of slightly less than 1%. You can check its rates here. CurrencyFair again comes the next cheapest when transferring GBP 200 from the UK to South Africa because there are no fees for the first three months. Once the three months expires, the cost jumps to around 17% which is extremely high. Paysend and XE are better options for the longer term, particularly for small amounts. It’s important to do comparisons of costs before making a transfer, and remember that the costs can vary depending on the amount involved. Also keep note of how long the transfer will take. Ideally, you would want a transfer company that can make the transfer in a day or less.

Published: 31 May 2023There are so many options out there to consider For money transfers but not all of them are fast or cheap. In this blog, we break down the fastest and cheapest options for your money transfer needs from overseas to South Africa

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