Quick Answer – How South Africans Can Get Cheaper Forex for Travel
For most South African travellers, the difference in costs is minimal, just choose the most convenient option.
Full Breakdown – How South Africans Can Get Cheaper Forex for Travel
Before your trip, estimate how much foreign exchange (Forex) you’ll need. Consider how much cash you’ll require for tips, taxis, and small vendors versus how much you’ll use at card-friendly point-of-sale (POS) terminals. Many countries accept cards, but cash is king in bargaining situations.
The most common way to exchange money is converting South African Rands (ZAR) into U.S. Dollars (USD) or EUR, then exchanging the USD for the local currency at your destination. Direct Rand conversions into foreign currencies tend to be more expensive.
Ways to Get Foreign Currency in South Africa
- Exchange ZAR for USD cash at traditional South African banks.
- Open a travel wallet or foreign currency account (often USD-based) with South African banks.
- Use your existing bank cards overseas to withdraw cash or make purchases, but remember to notify your bank about your travel plans.
- Foreign exchange bureaus (like Travelex or American Express) are an option, but often have higher fees and are not discussed further.
Understanding the Fees
When converting currency, there are three main charges to consider:
- Spread – The difference between the provider’s sell rate and the mid-market rate. Some banks advertise “zero commission” but make up for it with a high spread. Bigger banks are also using this zero commission tactic these days, always compare the full cost.
- Commission – A direct fee per transaction, usually between 1% and 2.75%, with big banks typically charging around 2%.
- ATM & POS Fees – Charges vary depending on the foreign bank (ATM) or South African bank processing the transaction.
Since exchange rates fluctuate and banks apply different spreads, it can be tricky to compare options. Below is an example of a conversionto a third currency for R25,000, ranked from cheapest to most expensive, based on rates obtained at the same time:
A quick note: comissions and charges are always changing, please confirm these before transacting, some charges work on a sliding scale so keep that in mind too.
Best Overall Options– How South Africans Can Get Cheaper Forex for Travel
For most travellers, Shyft and Capitec offer the best value. They both keep fees lower than traditional banks, but Shyft has an advantage, it lets you purchase USD or other major currencies in advance when exchange rates are favourable and store leftover foreign exchange for future trips.
Shyft, backed by Standard Bank (though no Standard Bank account is required), is app-based and allows users to buy USD at any time without needing a passport or flight ticket. It falls under the South African Reserve Bank’s R1 million annual allowance, making it an excellent option for pre-planning Forex purchases.
Additional benefits of Shyft:
- No account fees and competitive spreads (often less than 10c).
- Up to three physical debit cards (R100 total delivery charge) for ATM/POS use.
- Ability to split USD across cards—for example, managing taxi and food budgets separately, or to keep a spare with you incase one card gets lost or stolen. The app allows for quick movement between cards.
- Pre-funded accounts with no interest charges.
ATM Tip– How South Africans Can Get Cheaper Forex for Travel
Avoid “Dynamic Currency Conversion” (DCC) at ATMs—it often results in poor exchange rates. Try finding ATMs that don’t charge additional fees. ATM Fee Saver is a useful app to locate fee-free ATMs.
Update on Bank Zero
Bank Zero is another decent travel option, charging just 1% commission with no other fees, though it doesn’t allow pre-purchasing foreign currency.
Final Word – How South Africans Can Get Cheaper Forex for Travel
While searching for the best exchange rate makes sense, don’t sacrifice convenience for a minor difference in cost. A hassle-free, reliable Forex solution beats unnecessary stress when traveling. Don’t be penny wise, pound foolish.
Kwaai Travel