International Payments to France: Regular Payment plans

Making regular international payments to France can often come with excessive transfer fees and hidden charges, not to mention the effects of currency exchange rate fluctuations. The fee itself is usually the smaller of the two costs. The bigger one is the margin, or mark-up, that your bank or provider adds to the market exchange rate, which is rarely stated separately and can be worth far more than the transfer charge on a payment of any size. When you’re making monthly mortgage payments or living off an overseas income or pension, these costs quickly add up, and changing rates can mean you never know exactly how much you’re going to have to pay each month.

Setting up a regular payment plan with a currency exchange specialist takes all the hassle out of organising your monthly transfers, as well as offering peace of mind. You can set up a standing order to transfer money into your French bank account to cover utility bills and property taxes such as the taxe foncière, or pay your mortgage repayments directly. Most providers collect the funds from your home account by direct debit on a date you choose, and if you need to make any changes, you can adjust dates and transfer amounts online.

For less frequent payments, you can save the recipient’s details. When you’re ready to make a transfer, simply go online and set up the payment.

Opting for a long-term payment plan also means a reduction in transfer fees or lower fixed fees. You could even benefit from free transfers for life thanks to FrenchEntrée’s exclusive offer with Moneycorp (more about that below). When you consider that some high-street banks in the UK charge up to £40 and international wire transfers from the US can incur fees of around $45 per transaction, this is no small saving over the course of a year of monthly payments.

Another challenge with making regular international payments to France is that you will always be at the mercy of the exchange rates. This might mean some months you get a welcome bump in your pension funds, while other months you’re left short. Either way, it can be worrying, especially in times of economic uncertainty, as many UK expats experienced after Brexit. It’s also difficult to plan your finances when you never know exactly how much income you will be receiving each month or how much your bills will be.

To protect against this, there are three options available:

Fix your domestic currency amount. You will know exactly how much in pounds, US dollars, Australian dollars or another currency will be leaving your account with each payment. How many euros you receive will depend on the exchange rate at the time of transfer. This suits you if your priority is protecting your home budget.

Fix the euro amount. You will know exactly how many euros arrive in your French account each time, which is the better choice if you have a fixed mortgage repayment or a set of regular bills to cover. How much you pay for the transaction will depend on the exchange rate at the time.

Fix both with a forward contract. This means you fix the exchange rate on your regular payment plan. When the rate is at a level you are happy with, you put down a deposit, often around 10 per cent of the total, to lock that rate in for up to two years. You then know exactly how much you will pay in your domestic currency and how much you will receive in euros.

If you are making transfers of an overseas pension, rental income or other revenue into your France bank account, you have two main options available to you. If you are living off your income or pension, the best option will likely be to set up a regular payment plan as outlined above.

However, if you have greater flexibility over when you transfer your money, a smart move could be to set up a rate tracking system or market order. This means that you schedule your transfers into Euros only when the exchange rate reaches your desired value, ensuring you always benefit from the best rates.