International money transfer services are becoming increasingly relevant. It’s because many individuals are dissatisfied with expensive and slow bank wire transfers. Businesses require lower fees for moving money and making and receiving payments. They are essential to both international investors and small company owners.
Migrants’ savings may be jeopardized by bank transfer costs that can be as low as 3% on each transaction (transaction cost). Migrant workers, in particular, rely on these transfers since the expense of remittances is critical to them and the global economy. They’re also international travelers and individuals who mostly rely on these providers for convenience.
The demand for money transfers is high, and it is no surprise that numerous money transfer providers have emerged all around the world. Not all of them, however, are equally trustworthy and excellent. Because the sector is not well regulated yet, it’s critical that you pick a firm with extreme caution.
- Factors To Consider When Selecting A Money Transfer Service
- Reasons To Consider Use Of Specialist Money Transfer Services
- Types Of Money Transfer Companies
- Top 10 Best International Money Transfer Services
- International Money Transfer Services Compare Table
- Understanding International Money Transfer Fees
- When Depositing A Money Transfer, Is It Better To Use A Bank Or A Money Transfer Service?
- Why Do Money Transfer Services Charge Fees?
- Bottom Line
Factors To Consider When Selecting A Money Transfer Service
- Safety & Security: The worldwide electronic money transfer sector is highly regulated, with several governing bodies including the FinCEN (Financial Crimes Enforcement Network) in the United States, FCA (Financial Conduct Authority) in the United Kingdom, and ASIC (Australian Securities and Investments Commission) in Australia.
- Exchange Rate: It is critical to consider the impact of the exchange rate when selecting a service. The exchange rate will have a considerably larger influence on bigger transfers.
- Transfer Fees: It is the cost of moving money from one currency to another. The cost of a money transfer varies based on the service you use. This may be a percentage taken from the total amount of your transfer, a flat fee, or a fee that is dependent on the type of transfer you’re utilizing. If you make a cash transfer using your credit card, the fee will generally be greater. When utilizing a money transfer service, the optimum alternative is to utilize your bank account.
- Transfer Speed: It’s crucial to understand that the actual speed of money transmission, which is how long it takes to put your funds into your receiving account, is a vital consideration. It generally takes from a few hours to 5 working days for your transfer to be ready. You can use a service that offers quick transmission speeds if you have particular demands.
- Amount Received: This is the amount you’ll receive in your destination bank account after any charges are deducted. This is the most important consideration when choosing a service.
- User Experience: While the convenience of the service is debatable, you want to use a service that is easy and quick especially if you are making frequent transfers. You’ll also need excellent customer service if you need assistance.
Reasons To Consider Use Of Specialist Money Transfer Services
- They Specialize In Money Transfer Services: Transferring money is the livelihood for a money transfer service. These firms are constantly looking for ways to keep their rates competitive and ensure that you receive the greatest exchange rate at the lowest cost feasible.
- They Save You Time: Yes, you may use your bank to transfer money. If you do not mind filling out lots of paperwork and going to your local bank branch, you can have a wire transfer arranged through your bank. However, you won’t be receiving the best exchange rate, and you will definitely pay more than you should. A money transfer firm takes care of everything for you. They’ve made the process incredibly simple, requiring only a few minutes to complete it remotely online.
- They Save You Money: To obtain the highest possible exchange rates, you must use a professional money transfer company. You’ll save a lot of money on fees and get a much more favorable exchange rate than the banks can offer you.
Types Of Money Transfer Companies
- Remittance Companies: These firms assist people in transferring money from immigrants who work in one country, such as the U.S., to their family members back home. Remittance payments have grown to be a significant source of income for developing nations with few employment opportunities.
- P2P Companies: The majority of these companies facilitate direct exchanges between two individuals. This occurs most frequently when one person transfers cash from his bank account to another individual’s bank account through cell phones or online. The exchanges are typically quite small and go unnoticed by financial institutions.
- Non-P2P Companies: Non-P2P transactions are those between organizations in different nations or very large transfers between people. In these transactions, large amounts of money are transferred and may attract the attention of both financial and federal authorities.
Top 10 Best International Money Transfer Services
1) Currencies Direct
There are no transfer fees with Currency Direct and the exchange rates are extremely competitive and low. Accounts can be created online or with mobile devices, and they are both free and simple to create.
This is a firm with one of the most competitive rates available today. If you’re searching for the lowest transfer fees across borders, this could be the firm to contact. On the other hand, there is a disadvantage to this firm. It only works with about 20 different currencies. So, if you want to send money to a location that isn’t quite typical or “the norm,” you might have difficulty doing so using this service.
2) XE Money Transfer
XE Money Transfer service has several useful characteristics that aren’t available from other worldwide money transfer businesses. They allow you to complete same-day transactions with a majority of the 170 nations they serve, and they have the capacity to swap one currency for another. One of the best factors that are liked most about this transfer service is its lack of additional fees to transfer money.
This money transfer service allows clients to receive and send money from the comfort of their own homes. Every user possesses their own private account on the firm’s website, so anybody can check their account at any time.
3) OFX
OFX doesn’t charge any transfer fees when you move money through their firm. Transfers may be made directly via wire transfers or from the buyer’s debit card. They do, however, have a lock-in rate function, which allows purchasers to lock in a certain interest rate before transferring funds.
You may use an account on their website to keep track of your transfers and access your complete transaction history. OFX does not provide same-day transfers. Transfers using OFX may take anywhere from 1 to 2 days up to 3 to 5 days depending on a variety of criteria.
4) SendFX
Sendfx specializes in helping clients with cross-border transfers at favorable exchange rates on large volume transactions, no fees, the ability to book transfers 24 hours a day, 7 days a week with same-day transfer capability and local support from the team of account managers that you can converse with and discuss your needs.
Setting up a Sendfx account is free, simple, and there’s no obligation to utilize them if you create an account. When you have successfully authenticated your identity, one of their representatives will speak with you and then complete your transaction, or if you don’t want to talk to anybody, you may self-serve on their safe 24/7 payments system.
5) TorFX
Transferring money through Torfx is absolutely free. Also, they have excellent exchange rates, which means you can save a lot of money on foreign currency fees if you use them to send money abroad. Torfx’s process for creating an account is also very easy.
It only takes a few minutes to create an account on their website. TorFX then assigns you a Personal Account Manager, who is typically an agent. You and your agent will negotiate a rate that works for both of you. One of the most appealing features of Torfx is that it is safe and secure.
6) World First
World First provides both same and next day transfers to many nations, as well as a 24/7 customer care and account monitoring assurance. The transfers are absolutely free if you are moving money between World First customers; otherwise, fees will be applied to your transfer.
Despite the costs, many people appreciate World First since it offers one of the world’s most diverse transferrable currencies, with a total of 187 different currencies.
7) Wise
The fee for sending money with Wise is actually minimal, with some costs of as little as $1 for each transfer plus 10% of the total amount sent. TransferWise’s fees are among the lowest in the market, making it an excellent option for moving small amounts of money.
Despite the fees, there are no hidden costs or unpleasant surprises, and Wise is completely upfront about its charges. Other than that, Wise offers several alternative methods for transferring money. These methods include direct wire transfers, debit and credit cards, Apple Pay, and even direct ACH transfers. This firm also provides next-day transfers, but this service isn’t available for all transactions.
8) Currency Fair
It’s straightforward to set up an account with Currency Fair, and it allows you to send and receive money from over 150 different nations. Customers of Currency Fair seem to use the firm more as a means of receiving cash rather than transferring money, however, both of those things are possible.
There are no fees associated with receiving money into your Currency Fair account straight from a bank transfer. If you receive funds in your Currency Fair account from any other sort of transfer, however, there are costs involved in the procedure. The two outstanding characteristics of Currency Fair are its Chatbot and the client’s capacity to set up automatic payments.
9) World Remit
There are costs to sending money through World Remit, although they are reasonable and the exchange rates are incredibly competitive. World Remit is liked by customers since it provides a variety of alternative and creative methods to send money overseas. World Remit also provides a door-to-door payment service, airtime top-ups, a cash pickup, and several mobile options.
10) Money Gram
MoneyGram is one of the faster ways to move money, with many of their transactions receiving approval the same day as they are purchased. Transfers can be delayed by bank closures or holidays, but they generally arrive within the next business day. The monthly and transfer limit of Money Gram is $6,000.
However, Money Gram is one of the more costly money transfer services. They’ve imposed markups as high as 3%. An advantage of this service is that since they’ve numerous physical locations where people can collect cash that has been delivered in person, individuals without bank accounts may easily receive money because they do not require the setup of any accounts or the completion of any banks.
International Money Transfer Services Compare Table
| Money Transfer Service | Exchange Rate Markup | Transfer Speed | Customer Service |
|---|---|---|---|
| Currencies Direct | 0.7% – 1% | 24-48 hours (dependent on the countries and currencies involved) | Excellent |
| XE Money Transfer | 0.5% – 2% | 1-2 days | Outstanding |
| OFX | 1.5% | 1-4 days | Good |
| SendFX | 0.15% – 0.25% | 1-2 days | Good |
| TorFX | 1.91% – 2.71% | 1-2 days | Excellent |
| World First | 2% | 0-4 days | Outstanding |
| Wise | 0.5% | 1-3 days | Good |
| Currency Fair | 0.35% – 0.6% | 0-2 days | Outstanding |
| World Remit | 1% – 1.5% | 0-3 days (depending on the type of transfer) | Outstanding |
| Money Gram | 4% – 5% | 1 day | Excellent |
Understanding International Money Transfer Fees
- Transfer Fee: This is the fee your credit union, bank, or other financial institution charges for transferring money to you. For example, if you want to move $100 and the firm charges a transfer fee of $15, your total expenditure for sending that money would be $115. Some of these costs are set prices, while others are determined by a variety of elements, including where you are sending the cash and how much cash you are sending, as well as how quickly you need it to arrive there.
- Sending Fee: Sending costs are essentially the same as transfer fees. They may, however, be referred to by this name instead depending on the firm you’re using.
- Exchange Rate: This is the way to convert between two currencies. For example, if the value of one US dollar is equal to 7.08 Chinese yuan, then your funds will be converted at that rate. If you use this exchange rate, your second-party receiver in China would get 708.05 Chinese yuan for each $100 US dollars sent.
- Receiving Fee: The recipient of funds is responsible for this fee, not the sender. Companies may charge both a receive and transfer fee, resulting in a profit for both the individual sending money and the individual receiving it on the other end.
When Depositing A Money Transfer, Is It Better To Use A Bank Or A Money Transfer Service?
Based on what you have just learned, you’re probably concluding that using a money transfer service is a good idea, especially if you want to get the highest possible exchange rate and avoid expenses when sending money overseas.
You must evaluate a variety of criteria, including security, reliability, fees, and service when making a selection. Let’s take a look at some of the advantages of using a remittance provider over a bank.
- Banks Are Usually More Expensive: A bank’s currency rate may not be as competitive as you might find with a transfer provider. Banks may also charge a wire transfer cost, which can be approximately $40 per transaction. However, there are some restrictions to consider. Some banks will provide overseas wire transfers for free, but they may include hidden costs. You must also remember that the receiving bank will charge you a fee, as well.
- Banks Often Want A Lot More Information: Some banks may not provide wire transfer services. You’ll usually have to go to your local branch as well. The process of transferring money between two account holders is usually time-consuming and laborious. You’ll also be asked to provide photo identification for the transfer.
- Banks Will Frequently Demand That You Already Have An Account With Them: The banks will require you to already be a customer in order to execute a wire transfer. If you lack an account, you’ll need to create one, which involves a lot of time and paperwork.
- Transfers By Bank Are Often Slower: International wire transfers are considerably slower than online service providers. However, wire transfer services are considerably slower than internet service providers.
- Banks Frequently Only Exchange Funds With One Another: When you use a wire transfer service to send money from one bank to another, the money generally only travels in one direction, limiting your options when it comes to where you’ll end up. You don’t have to worry about the same restrictions when using online money transfer services, and you can choose your preferred receiving account.
- Smaller Transfers Are More Adaptable To Online Money Transfer Companies: While some banks are capable of smaller transfers at a lower cost, you frequently find that the exchange rate is not as good as specialized providers.
- Large Money Transfers Can Be Completed Using Specialist Money Transfer Providers: When it comes to sending a large amount of money (such as purchasing a home), you can’t go wrong with a professional service. The banks, on the other hand, are unable to match the intense competition for exchange rates and minimal (or zero) costs that these specialist providers provide.
Why Do Money Transfer Services Charge Fees?
The reality is that money transfer services need to turn a profit in order to continue operating, and those profits are extracted from the markups or costs charged on each money transfer made through them. That is why you’ll never find a money transfer service for the precise mid-market exchange rate on any specific day, with no additional costs.
Many money transfer firms include a markup to cover their expenses or a set fee to the mid-market rate when computing your money transfer. This is why, when we suggest a zero-commission or no-fee service, we advise you to be cautious since more often than not, this means there will be hidden costs that you won’t know about.
Bottom Line
Billions of dollars must be sent across borders every year for personal and commercial reasons as globalization expands. The traditional method for transferring money across borders is going to be phased out by inexpensive and more efficient money transfer companies. We’ll see more competition in the market, which will result in even better offers.
