Belinda Beresford
Investor or tourist, gift-giver or generous parent bailing out stranded offspring, how can you best get your money out of the country?
The quickest way of taking money overseas is to use your credit or debit card, although this can be expensive. Internationally, credit-card transactions are operated in dollars. A withdrawal in yen will be converted to dollars, this in turn will be changed into rands before being withdrawn from your account. At each stage you can lose money.
As with any other movement of money overseas, exchange-control regulations mean you are supposed to get authorisation before using your credit card internationally. Standard Bank’s Mike Waghorn points out that you are required to have authorisation for your credit card stamped in your passport in the same way as for other forms of foreign exchange.
But when you’re facing the summer sales in New York and you’ve spent your travel allowance, it could be tempting to try to withdraw money using your credit or debit card.
Before giving into the impulse, reflect that your bank is legally bound to inform the Reserve Bank of your indiscretion.
Another incentive to talk to your bank before you use your card overseas, is to check that it will work. Absa’s general manager for international banking, Org Ehlers, says standard credit cards will not operate internationally, except for the new Maestro cards.
Even if the cash does come out, you risk the wrath of the Reserve Bank when you return home since all global electronic card transactions are reported to the exchange-control department. Department head Alick Bruce-Brand says all credit-card transactions are automatically checked against the department’s records.
Discrepancies, or cases where individuals exceed their limits, are queried. Bruce- Brand said the Reserve Bank could condone the practice in some extreme circumstances; for example, if travellers cheques were stolen and the owner used his credit card to withdraw cash instead of getting the cheques replaced.
Another quick, and usually cost-effective, way of moving money overseas is by telegraphic transfer or Society of Worldwide Interbank Financial Transfers. The sending banks electronically transfer the money via the foreign currency accounts banks hold with each other.
The process is delayed by the need to get the transfer information approved by receiving banks, a process compounded by time differences. For example, United Kingdom banks have to receive international transfer information before 8am, while South African banks are open for international settlement until 3.15pm.
The transmission of your money can also be slowed by the tendency of banks to operate through a series of relationships. This means your money can pass through an intermediary bank on its journey.
One foreigner working here has a bitter complaint on this score — his monthly transfer from National Westminster in the UK to Volkskas in South Africa went via Standard Bank and was often a week late. Complaints to the UK bank meant the money is now routed directly to Absa.
You can go the old-fashioned route and carry cash, although banks are wary of large amounts of foreign currency in this form. According to Standard Bank, money- laundering legislation worldwide precludes banks from taking big amounts of cash unless the customer is already well-known, or has been introduced by another bank. Cash is also a risky and expensive way to transfer money.
Other alternatives are bank drafts — guaranteed international bank cheques — and travellers cheques. Electronic transfer and bank draft costs are similar, with the purchaser paying a percentage of the amount concerned as a transaction fee. There are also some travel cards which can be preloaded with foreign exchange.