INTERNATIONAL MONEY TRANSFER

UPDATE April 2021

Canadian bank draft sent on March 10, 2021 by postal service from Victoria, BC to Germany, arriving Frankfurt Airport March 17, 2021, then held up in customs (?), finally arriving April 7, 2021, in Berlin – 21 business days. Not too bad ! My son who lives in Europe told me that some mail took up to one year. Therefore – it is apparently not a good idea to do any international money transfer to any countries [the United States may be the exception ?], but rather transfer funds online. In the end, transfer costs may amount to the same.

When sending a bank draft by Canada Post, special delivery for tracking purposes, WARNING – during the world wide pandemic lock downs occur that may include postal services. My bank draft mailed via Canada Post on March 10 to Berlin, Germany, has never arrived, yet.

One thing I learned, (besides “you cannot really trust any bank”) unless you spend hours researching on the Internet how money (or funds) are transferred from point A to point B, and more importantly – what extra charges are taken by each INTERMEDIARY BANK in between your bank (point A) and the payee’s bank (point B). Remember, your own bank, even if it is the largest, will not disclose this to you. You will have to dig deep for it.

CASE IN POINT. Each year I need to transfer income tax payments to Europe, where I started working, having had income, contributing to the government social insurance, and now receive a small pension. Back to banking business: What is the best and cheapest way to pay these annual amounts ? As my online bank account does not allow certain money transfers which are commercial – especially to a large government – my Canadian Bank must do this for me. My bank advertises a fee of C$6 for any amounts under $1,000. [ https://www.rbcroyalbank.com/banking-services/international-money-transfer.html ]. What they forget to mention is, that the funds may first go to an INTERMEDIARY BANK in Europe. That bank may take another hefty fee. While my bank here in Canada will not be responsible for any extra charges, once the transfer has been processed. In my case, for a small amount for under C$1,000, the bank in Europe charged an additional Euro20, equal to C$30 m/l. That is too expensive. [ https://www.investopedia.com/ask/answers/062515/what-difference-between-correspondent-bank-and-intermediary-bank.asp ]

Buying a draft in Euro currency at my bank and then mail to the (government) recipient in Europe would cost me: C$8.50 for an amount under $1,000 funds. [ https://www.rbcroyalbank.com/banking-services/bank-draft.html ]. Sending this bank draft by mail probably needs special secure mail. Check this out: [ https://www.cbc.ca/news/business/bank-draft-td-canadatrust-royalbank-rbc-bmo-cibc-canada-banking-cash-cheques-1.4457823 ]. From Canada international, better use registered mail and hope for the best. [ https://www.canadapost.ca/cpc/en/personal/sending/letters-mail/registered-mail.page ]

Banking Problems while Traveling

Many times I travel from North America to Europe, there is a problem with any of my Bank cards, either my regular Debit Card or a major Credit Card. The problem being not, that they are stolen or compromised by some hackers, the problem is always with the Banks themselves and their method of contacting them when such emergencies arise. Over the past years this situation has worsened because of the changing and more complex security devices the Banks invent. There are two types of banking privileges that can be cancelled by a Bank while out of country: (a) Using the bank card to get cash out of a banking (ATM) machine, or for payments; (b) access to online banking. Both are important to have as a traveler while having to rely on a mobile phone. But the worst situation arises if there is no way to contact the Bank. Mostly for technical reasons, telephone services, expensive mobile phones (foreign SIM cards and providers), and the banking telephone system itself: Either offering an international toll-free number, or even worse offering clients a call collect number. On another occasion, years ago, when my bank card got cancelled, I called a “collect” number, got someone from my bank on the phone who told me: “we do not accept charges”.
I have two cards, my regular bank card (that works via ATM, international Interac and PLUS* displayed almost anywhere), but which I not use anymore because it got cancelled in Europe (security reason, because I had removed several times a few hundred €). And my Credit Card, most precious, because it can be used anywhere for paying anything even food and super markets, and cash advances via ATM. Two cards from two different banks, I have been client of for at least thirty years.
However, if using a credit card for all payments, then when the payment for the card is due, it needs to be paid using online banking. One cannot pay off a credit card with the same credit card. This time in Europe for three months both my bank cards got cancelled/or suspended: (1) Credit Card because I accessed my online banking with my iPad tablet, a device the bank did not recognize. At least I could connect easily with the Bank and resolve that issue. (2) My online banking with my regular bank, because of a new security system, my error in logon, and telephone connection problems (I have an old unblocked cell phone, using a foreign SIM card), on my cell phone cannot enter other than regular phone numbers, but not bank card numbers, therefore, when calling I got cut off by my foreign phone provider.
This time I have someone here in Europe try out with a smart phone the process to connect to my bank with their ‘international toll free number’, going thru the process. If it works, then it is that old regular cell phone of mine, that is not usable. From all this, it appears that the safest way to have any money on you (at least for food) is, to take sufficient cash with you. Like in the old days. Either way, I still always inform my Banks that I will be out of country, and where, and how long.
It should always be remembered, that any banking or debit or credit cards are property of a Bank, not property of a client. Therefore, can be cancelled/suspended anytime by the Banks’ security system. The client does not need to know the reason. The client only needs to store their money with those Banks.