All money transfers are associated with fees, however, these fees range in size depending on your payment corridor.
What's a payment corridor?
A payment corridor is the path that money travels when it is transferred between two countries or regions. It typically refers to the route the funds take, including the banks, financial institutions, and other intermediaries involved in the transaction.
|Example: Your company is based in the United States and sends you money to your bank account in the Philippines. Your payment corridor would include the banks in the US and the Philippines that are facilitating the transfer, as well as any intermediaries that are involved in the process, such as correspondent banks or payment processors.
The payment corridor can impact the speed and cost of the transaction, as well as the exchange rate that is used to convert the money from one currency to another. Some payment corridors may be faster and less expensive than others, depending on the countries and banks involved in the transfer.
Can I choose a cheaper payment corridor?
In most cases, you cannot select the payment corridor for your money transfer, as it is typically determined by the banks and financial institutions involved in the transaction.
When a transfer is initiated for your payment, the banks or other financial institutions involved in the process will automatically determine the payment corridor based on various factors, including the destination country, the specific banks involved, and other factors such as the amount and purpose of the transfer.
Can I do anything to reduce my fees?
Yes! International transfers almost always are associated with higher fees. However, if you choose a Borderless Payment Method that would enable your payments to be processed as local transfers, your fees will reduce significantly.
Please note that even if your payments are processed as local transfers, some countries charge taxes on incoming money transfers. Additionally, some banks deduct fees at the time of accepting incoming money transfers. Borderless has no authority to waive these charges.
What are local transfers? Why are they less expensive?
When you transfer money from one bank account to another, it can either be a local transfer or an international transfer. A local transfer is when the money stays in the same country, and an international transfer is when the money goes to a different country.
Local transfers are typically processed within the same country, in the same currency, and through a single banking system. They are much simpler and less expensive than international transfers processed through the Swift network or other international payment corridors. The payment delivery timelines of local transfers are held constant, as they are governed by the local banking system.
Swift (Society for Worldwide Interbank Financial Telecommunication) is a global network that helps banks and financial institutions securely transfer money internationally, but involves multiple intermediaries. Each intermediary may have a different payment delivery timeline and may charge a fee for their services. Swift transfers are often subject to fluctuating currency conversion fees and other charges, which further add to the cost.
As a general guideline, Swift fees can range from around $20 to $50 or more per transfer, which Borderless has no authority to waive.
How do I know whether my transfers are local or international?
If your bank account currency is the local currency of your bank account's country, your payment will be processed as a local transfer. Otherwise, it will be processed as an international transfer.
Example: You recently moved from Canada to India, you work for an American company, and your contract and invoices are in USD. You want your payments processed as local transfers to reduce fees, so do one of the following options:
1. Add your Indian bank account (in INR) as your Borderless Payment Method. This means your USD invoice amounts would be converted into INR at the current FX rate.
2. Add your Canadian bank account (in CAD) as your Borderless Payment Method. This means your USD invoice amounts would be converted into CAD at the current FX rate.
3. If you happen to have another bank account in a different country, you could use that instead, as long as its currency is the local currency.
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