Transferring money from South Africa is a difficult chore. There are strict foreign exchange controls over the amounts of money you can transfer from South Africa internationally (R1,000,000 without prior clearance from South African Revenue Service or 10m Rand with prior clearance), and also the amount of providers who are able to handle South African customers is quite limited, with only a handful of the international money transfer services in UK or USA are authorised to operate in in S.A.
That, however, does not mean that transferring money from SA must be done via banks. Transferring money from South Africa to UK, from South Africa to USA, from South Africa to Australia and so on, can be an easy and inexpensive chore using a money transfer company. When looking at StandardBank’s foreign exchange rates, you can see 2% exchange rate markups which is not the worst when you look at international money transfer fees around the world but then when you read deeper you can see that there’s a SWIFT fee and a commission taken on top of the markups. Hence transferring money internationally from South Africa using a bank can cost even as much as 5% and there’s a lot of saving to be had if you were to use a money transfer service instead.
Finding the best international money transfer service is pivotal if you plan on transferring large amounts from SA (but can also be useful if you are transferring lower amounts frequently).
(For transfers from South Africa; otherwise view the best money transfer in UK, EU, USA, Canada and Australia)
3 Main Reason to Use a Money Transfer Company to Send Money from South Africa Abroad
As touched above, the first and foremost reason will be the foreign exchange rates or lesser fees to be paid on international money transfers.
- With a very prominent reason for transferring money from South Africa being emigration out of SA (named by the Economist as the “brain drain“), we’re talking about potentially very large international transfers of people transferring all their money to another country. Any difference of 1% saving on R1m will amount to R10,000 extra on the other end. If someone has tens of millions of Rands to transfer overseas, a few percentages could make up hundreds of thousands in savings.
- Additionally, there no fixed SWIFT charges added to transfers of money from South Africa with the best money transfer services as per our recommendation. That means someone who needs to transfer money abroad frequently is able to do so without paying on a per transfer basis.
The second reason is that foreign exchange services offer a far more bespoke service than what banks can offer. That means speaking to a dedicated currency dealer that is able to handle any enquiry relating to the transfer in real time and via email or phone. It also means that the currency dealer is able to guide the customer on the right timing to make the transfer to make the most out of it in terms of exchange rates. If the Rand exchange rate is expected to improve, then a currency dealer may recommend using a limit order so that the transfer will only take place in the future when a certain rate hits, or contrarily suggest to use a Forward Contract to fix the current rates. These types of advanced services which were normally reserved for businesses or now readily available for the private consumer and you can make use of them (whereas banks would not offer such services).
Thirdly, money transfer companies who have a local bank account to fund transfers in South Africa do not have to use the SWIFT protocol to transfer funds abroad. That simplifies the transfer of large sums of money out of South Africa by a lot compared to banks.
Transferring money to South Africa
South Africa is still a hub for investments. Although, as you can read further down the article, there’s a lot of emigration from South Africa and plenty of people moving their funds to other countries, there are investors from all over the world investing in South Africa’s prime real estatein large numbers.
The ability to guide customers on where the Rand is heading can be a great money saver on top of no money transfer fees and a better foreign exchange rate than the banks. To learn more about where the Rand is heading, view our small writeup below:
Know More: Why is the S.A Rand Downtrending Since 1990’s?
The movement of skilled workers our of South Africa (previously referred to as the “brain drain”) has a major impact on the South African economy. What has ended up happening is that the professionals with the qualifications that could positively impact the economy have left leaving a hole in the skilled workers that are available to further drive the success of the country? This is not only limited to professionals, but also to skilled tradesmen that streamline the economic success of the country. Without the innovation of skilled professionals and entrepreneurs, it is quite difficult for South Africa to have progressed in the professional sphere.
Another impact that the South African economy has seen is that it has an ageing elderly population that has since retired without the younger workforce to fill the void. This void in skilled workers combined with the heightened race empowerment movements paralyzes the country’s potential economic successes as the size of their workforce continues to shrink as the elderly population decides to retire and leave the workforce.
Since the average age of immigrants has been between the ages of 20 and 40, it not only leaves a gap in the workforce, but also a gap in the workforce of subsequent generations. This impacts the country’s education system as well given that they are using government resources for many of their citizen’s education and then those citizens are deciding to relocate to better opportunities abroad. Furthermore, the children of those immigrants will be raised outside of South Africa and not only be distant from their cultural identity but also, from the opportunity to bring their unique skill sets to the South African economy.
As touched on above, the issue is cyclical. Professional workers are looking at the economic downturn and thinking that their wages may be higher elsewhere. With the movement of capital being so frictionless, and with few language barriers, South Africans are emigrating for economic reasons. This further reduces both the demand in the economy and the productive capacity – further damaging the economy and making emigration look all the more alluring.
A recent IMF report signals that medium-long term growth is not looking promising (which again, highlight their need to retain skilled workers), whilst there is low per capita GDP growth. South Africa has even been downgraded from “stable” to “negative” by the S&P Global Ratings, as they highlight their growing debt problem and increasing fiscal deficits. That’s the real issue here too – South Africa frantically turning to fiscal policy when the issue seems to be just as much supply side perpetuated by emigration as it is demand side. This is further confirmed with inflationary pressures existing, which needs to be fixed with supply-side policy as opposed to worsened further fiscal spending through debt.
Hence as a general rule of thumb we believe that the South African Rand is heading down further and that if you need to transfer Rands for Dollars, Pounds or Euros – it is generally better to pull the trigger today (not financial advice!).
READ MORE:
Living In South Africa: Pros and Cons
South Africa is a beautiful country with amazing weather, incredible wildlife, places of cultural importance, and a laid-back vibe. Often
South African Emigration Patterns and Their Impact on the South African Economy
Recently it has become popular for the white population of South Africa to emigrate to other countries. Given that the
Best International Money Transfer Services in South Africa 🇿🇦
Currencies Direct’s Service is a popular way for transferring money from South Africa to UK, EU, USA, Australia and Asia, supporting 120+ currencies.
The number one rated international money transfer service globally, namely Currencies Direct, is one of few brokers licensed to handle South African clients. The brokerage, which is headquartered in London and have 20+ offices in Europe, as well as offices in the USA, is one of the safest options to transfer money globally for cheap, with more than 20 years of experience and boasting trading volumes in the billions of dollars each year. It offers a “full-suite” type of solutions – from business foreign exchange services, hedging, bespoke guidance for both individuals and businesses and above all competitive rates and NO FEES policy which means that there are no fixed costs per transfer, making them usable for both small and large international money transfers.
The company has 97% positive reviews from customers across the globe, including South African customers, and is highly consists in its level of service. On-boarding with Currencies Direct South Africa is less complicated than opening a new bank account but does require to provide information about the source of funds and the recipient. Once you have signed up with Currencies Direct, you could use them to transfer money internationally from any of your bank accounts, so if you have multiple bank accounts in SA and out of SA – you won’t have to sign up again.
Transferring Money to South Africa from UK, USA, Australia, Europe
Whereas transferring money from South Africa to a bank account abroad has limited options because few money transfer services are authorised to take on South African customers (Western Union, Moneygram, Xoom, World Remit and Sable International are 5 additional options on top of Currencies Direct that we have already presented, but aren’t on our list of best money transfer services)… if you want to transfer money to South Africa from UK, send money to South Africa from USA, or move funds from Europe, you can use any of our top 10 money transfer companies below who all support the SA Rand (here are the top 3)
- Min Transfer: £/€/$ 100
- Currencies Supported: 39
- Offices : UK, EU, USA, India, South Africa.
- Our Rating : 97.8%
- Most Global Offices and Reach
No Fees from Anywhere and Competitive Rates
96% Client Satisfaction
- Min Transfer: £/€ 100
- Currencies Supported: 40
- Offices : UK, EU, Singapore, and Australia.
- Our Rating : 93.4%
- High Quality Bespoke Service
MoneyFact's Best Provider Award
Over 100 Years of FX Experience Across Its Trading Desk
- Min Transfer: £/€/$ 50
- Currencies Supported: 120
- Offices : UK, EU, USA, HK, and UAE.
- Our Rating : 92.8%
- Business Oriented, Many High Profile Business Customers
Industry Veteran since 1979
Diverse Hedging Options and Excellent Guidance
S.A Banks Began Competing with Fintech
There is increasing competition (finally!) in the South African remittances market, and banks are joining the party. Solutions like Shyft, by Standard Bank, is actually a feasible solution to the best international money transfer services listed on this page. While this money transfer app is more oriented towards small transfers, the rates offered on it are competitive and the UI is good.