Wiring Payment to Foreign Travel Vendors: It Saves, But Is It Safe?

[Max Pesling]

Back in the day, you'd stroll into a travel agency, get face-to-face advice, and leave with an armful of color brochures and a paper ticket. Then the Internet came along, but for a long time consumers were slow to warm up to paying online with a credit card. That's mostly history now: Most will happily divulge those 16 digits in return for the savings that online competition and the elimination of the travel agent middleman have brought about.

All well and good, for the most part, when it comes to travel vendors in your own country. Increasingly, though, travelers are tempted by overseas companies -- now easily found online -- which offer more intriguing options or deeper travel discounts. The catch: Many if not most of these vendors charge cardholders around 3 percent for the transaction. As if that weren’t bad enough, cardholders' banks clobber their customers with another fee of 2 to 3 percent for the foreign currency conversion, pretty much wiping out any savings from booking travel online.

My friend John Lamb, a New York City lawyer, recently faced this very dilemma while planning his upcoming honeymoon, a two-week luxury safari in Tanzania. The itinerary John liked best was sold by a tour operator in South Africa, but the combined 5.7 percent credit card and conversion fees amounted to several hundred dollars, money he’d rather spend elsewhere. The tour operator suggested he wire the funds directly instead (total cost: $35 at John’s bank).

John was tempted, but understandably concerned: Would it be safe to wire what's essentially cash to an unknown vendor halfway around the world? If something went wrong (e.g., the company went under), would he have any recourse? Racked by doubt, John dashed off an email seeking advice from a trusted travel writer and friend, a.k.a. yours truly.

YT, however, had no surefire answer, never having been in a comparable situation. I could've offered general tips to help my pal protect himself, but in the age of the Internet I was able to consult my online brain trust. I posted the question in the Tour Operators group here on Tripatini.com, and within 72 hours had amassed a considerable body of travel advice from experts as far afield as India, Tanzania, and Nebraska. Three top tips to wire funds safely to overseas travel vendors emerged:

* Check their reputation. John Tavera of North Carolina-based Marnella Tours says, “Do your homework. Check that the company you are sending funds to is legitimate and in good standing with the local or national tourism association.” Nayaz Noor of Safir Tours in India also suggests that you can vet the company with the destination’s tourism office in your country of residence.

* Ask fellow travelers. Fatema Zavery of Zed Safaris in Tanzania suggests you “check reviews from other travelers who have used [the company’s] services.” Indeed, in the age of user-generated content, it should not be difficult to find enough reviews of just about any travel provider to help answer your doubts.

* Buy insurance. If doubts are still nagging, buy travel insurance, says Peter Walter of CzechTours.cz. It costs a fraction of the money you’ll save by wiring the funds, and will give you peace of mind, whether the vendor takes flight with your money or goes out of business before your trip -- or, more likely perhaps, you get sick and have to cancel.

With the proper precautions, wiring funds directly to an overseas travel vendor can be a safe and effective way to save money – which is exactly why my friend John decided to do it after reading the experts' advice here on Tripatini. As a final note, I was pleased to see that not a single one of the tour operators who offered advice tried to sell John anything. Several, in fact, outright confirmed that his vendor is a reputable company in great standing. It's reassuring to see that, at least in some cases, you can find unbiased advice on transparent online travel forums.

And John, by the way, had an unforgettable honeymoon.