Purchasing luxury goods can be an ideal way to invest your funds, treat yourself, or buy a cherished gift for a loved one, but what about paying for luxury goods outside the UK?
When you’re transferring substantial funds from one region to another, it’s important to select the right payment method. By doing so, you can accelerate the transfer speed, reduce your costs, and maximise security.
Paying for Luxury Goods Outside the UK with Credit and Debit Cards
If you’re purchasing luxury goods from a shop or business, using your credit or debit card may seem like the easiest way to complete the transaction. Although this is a viable option, credit and debit cards can charge relatively high fees on international purchases.
Due to this, it’s important to check the terms and conditions and the fee schedule for your card agreements in advance. Then, you can compare payment options and choose the best one to suit your needs.
Making International Payments for Luxury Goods
Fortunately, there are many ways to transfer funds across borders, so paying for luxury goods outside the UK needn’t be problematic. Here, we cover some of the most important factors to consider when you’re making an international purchase:
Where are you purchasing from?
The location of the recipient will determine which payment methods are available to you. If you’re paying for luxury goods outside the UK from an EU country, for example, you should be able to use a SEPA Credit Transfer or a SEPA Instant Credit Transfer to make the payment. Alternatively, the TARGET2 payment system can also be used for cross-border Euro payments and is best suited for high-value transactions.
If you’re paying for luxury goods outside the UK and the intended recipient is not in Europe, you’ll need to consider an alternative method of international transfer. SWIFT is the most widely used payment method for non-EU cross-border payments and it allows you to transfer funds to more than 200 countries and territories.
What’s the fastest way to make an international payment?
If you want to make a real-time international payment, then a SEPA Instant Credit Transfer or a TARGET2 transfer is your best option. These transfers are generally completed in seconds (or faster!), so there is no delay in getting the funds to the intended recipient.
Alternatively, a SEPA Credit Transfer typically takes around 24 hours to complete the transaction, while a SWIFT transfer can take a few days to be finalised due to the use of intermediaries in confirming the movement of funds.
How much does it cost to make an international payment?
Purchasing and paying for luxury goods outside the UK can be a good way to save money on what you’re buying but high transaction fees could render the saving negligible. Fortunately, you don’t have to get stuck paying high fees every time you want to make an international transfer.
SEPA Credit Transfers or SEPA Instant Credit Transfers are typically low or no-fee, for example. When fees are applied to SEPA, TARGET2, or SWIFT payments, it can be in the form of a flat fee and/or a percentage of the transfer amount.
As fees vary from one payment provider to another, it’s advisable to compare your options before you decide how to make an international payment. As well as helping you access the right payment infrastructure, this will ensure you can make cost-efficient transfers whenever you need to.
Can I make regular international payments?
Absolutely. You can make international payments as often as you choose. However, if you’re signing up for a recurring purchase from a country within the Eurozone, paying via SEPA Direct Debit could be your best option.
Are there minimum and maximum transfer amounts?
SEPA Instant Credit Transfers are capped at €100,000 and standard SEPA Credit Transfers have a maximum transfer amount of €999,999,999.99, but there’s no limit on SEPA Direct Debit amounts. Similarly, there are no minimum and maximum transfer amounts for TARGET2 transactions or SWIFT payments.
Will my transaction be flagged?
If you’re making a one-off transaction when paying for luxury goods outside the UK, it may be flagged. This is because high-value transactions that are outside of your usual remit may need to be assessed under anti-money laundering rules. As this can delay the transaction, it’s important to consider this in advance.
Providing documentation to show where the money originated may be required, to allay a payment provider’s concerns that the transaction is suspicious. Additionally, choosing a payment provider that specialises in international transfers can also help to reduce the risk of your transaction being delayed.
How is currency exchanged?
If you’re paying for luxury goods outside the UK, then it’s likely your funds will be in GBP and will need to be exchanged before the transaction is completed. It’s essential to check the exchange rate in advance, as this can substantially increase your expenditure.
If you’re making a purchase worth 100,000 Euros from a European trader and the exchange rate is 0.85, for example, this equates to approx. £85,000. If the exchange rate is 0.95, however, the same purchase equates to approx. £95,000.
As you can see, making a purchase when the exchange rate is low enables you to reduce your expenditure. As well as planning your purchase in advance, you can also choose to ‘hold’ the offered exchange rate and schedule a payment transfer in advance. This means you can take advantage of favourable rates, but it could work against you if the exchange rate subsequently drops lower.
Paying for Luxury Goods Outside the UK with PayAlly
At PayAlly, we offer a wide variety of international payment options that allow you to send funds across borders simply and quickly. What’s more – our dedicated Relationship Managers are always on hand to help you identify the most appropriate payment methods and to assist with your transactions.
To find out how we can help when you’re paying for luxury goods outside the UK, get in touch with our team today.