Paying overseas bills isn’t fun, or easy. We’ve listed different ways you can do it to take the stress out of the process as much as possible.
What will we cover in this article?
Whether it be household bills in your overseas property, medical expenses, or school fees – paying bills abroad can be tricky business. Due to the regularity of some payments like household bills, we want to make sure that you can reduce the cost of these payments and reduce the stress involved wherever possible.
The Currency Shop aims to provide you with the most updated information in simple form, without any of the jargon. In this article, we will explore the best ways to pay bills overseas:
- Using credit card as a way of paying overseas bills
- Paying overseas bills via international money transfer
- Using Paypal to pay overseas bills.
- Paying overseas bills via Western Union
- Setting up a local bank account
- What to consider when paying overseas bills
As well as paying overseas bills, you may need to transfer money internationally. Our comparison page compares providers and banks that allow you to do this.
Paying overseas bills by credit card
Paying overseas bills by credit card can be a good option for smaller transactions (under $200NZD). This is because you will be charged a fee between 3%-8%, plus an unfavourable exchange rate. For smaller transactions this won’t have a huge effect on your overall amount, but exercise caution if you’re looking to transfer larger amounts via credit.
Paying overseas bills via international money transfer
One option is to pay into your biller’s bank account, if they have one. If so, then you can do this through an international money transfer. There are two methods for this transfer:
- Using a bank
- Using a money transfer company
There are pros and cons to each method, although it is dependent on how much money you are transferring. Some transfer companies have a minimum of $1000NZD. You will generally get a better exchange rate through money transfer companies, and less fees but there is a lot more work involved than going through your bank. Your bank will allow you to do it all online conveniently, with many banks charging less for online transfers rather than in-branch. The charges from your bank are normally between $18-$32NZD, plus the exchange rate.
- TIP: Always check with your bank and compare their prices with money transfer companies such as OFX, TorFX, or HiFX. Dependent on the size of the transfer, both methods can be good or bad.
Our comparison page compares providers and banks so that you can contrast their rates and fees.
Paying overseas bills via Paypal
You will have most likely heard of Paypal, and how convenient it is in the modern world. It has a handy app, and all you need is an account with your email set up to your bank account, and you’re good to go. You can either choose to pay directly from your bank account via Paypal, or from your Paypal balance – essentially your own separate wallet that you can choose to fill from your bank. This is particularly handy and effective if you are paying smaller bills below $200NZD.
Be careful though, as convenience comes at a price. Paypal will charge you a flat fee and a percentage of that payment – not too much to worry about for smaller payments, but if they are regular or if they are larger payments then you could be losing out of some of your funds.
To read our review of paypal, click here.
Paying overseas bills via Western Union
In terms of convenience and ease, Western Union probably isn’t the star player. However, with it’s 90,000 agents worldwide, it certainly is a global competitor. This can be particularly useful if you are sending payments to parts of the world without a big banking sector i.e. South America, Africa and parts of Asia.
The charges incurred via Western Union can, understandably, put you off. You are charges a transfer fee and an exchange rate. Although the exchange rate will likely be more favourable than your bank, the fees are not set. Unfortunately, they will fluctuate based on where you are sending the money to, how it is being received i.e. cash pick-up, online, and how much you are sending. The maximum amount via Western Union is $5000NZD and there is no minimum.
To read our review of Western Union, click here.
Setting up a local bank account
If the bills are regular, then we would recommend setting up a local bank account in the destination that the bills arise. For example, if you own a property in Italy and pay household bills monthly then it might pay to set up an Italian bank account when you are next in the country. This way, you can make an international money transfer of a set amount you think you might need, say for three months, and then pay in the correct currency with no hassle.
What to consider when paying bills overseas
Paying bills overseas is generally considered a hassle. But thankfully, you now have a few options to consider which, although having both pros and cons to each, might help you decide dependent on your circumstances and reasoning behind your payments.
- How much are you paying? Paypal and credit cards are good for smaller transactions, but due to the fees and exchange rates, you can lose a lot of cash in transition if the sum is larger than $200NZD.
- How regularly are you paying? If it’s a regular commitment, then it might be worth setting up a local bank account and avoid the regular conversion and transaction fees.
- What fees and charges are involved with your chosen method of payment?
- What exchange rate are you getting?
Susan and Harry have two daughters both studying at The University of Melbourne in Australia. As residents in New Zealand, they had to be clued up on how best to send their daughters money for bills on a monthly basis, so decided to research into it before their daughters left. They found that Paypal was their best option, as both daughters had a Paypal account. Due to it also having lower fees than their bank, they decided to set up their own Paypal account as well. They found that they could complete the transfer and convert their NZD to AUD easily and conveniently within 1-2 business days, leaving their daughters happy but more importantly to them, warm and clean!