International money exchange has never been so important before as globalization has reached a new level with digitalization. People are working cross border on freelancing basis and getting also paid internationally. The World Bank estimated $625 billion was sent by migrants living in the U.S. to their friends and family members in their home countries in 2017 alone. There are some tacit issues and fees involved in such transferring money internationally and if you don’t understand them it might cost you dearly. Nowadays, you’ll likely pay lower costs and get your money faster by using one of these licensed money transfer companies.
What Do I Need For Transferring Money Internationally?
Technology has come a long way in ensuring that the transfer of cash takes place as securely and as fast as possible. Therefore, institutions have a set of rules and producers that you must adhere to in order for your transfer to be successful. Below are some of the details that you will need in to carry out successful transferring money internationally .
As a sender in the US, you must provide details about the recipient’s bank account. The specific information required mostly depends on the country you are sending the money to and the bank the recipient is operating. Here are the additional details that you need:
- The receiver’s address and full names
- The reason for the cash transfer
- The receiver’s bank full name and address
- The transfer amounts
- The account type and account number of the person to whom you are sending the cash.
- The recipient’s bank IBAN if it is applicable
- The routing number of the recipient
- The SWIFT or BIC code of the recipient if they are applicable
For international transfers, SWIFT network is considered to be the standard, as such most banks and countries do have a unique SWIFT code. In most European countries, the banks use IBAN ( International Bank Account Number ) codes.
The Secure And Best Way of Transferring Money Internationally
The services discussed below may incur fewer fees for transferring money internationally and both the sender and receiver will gain a little more when compared to the traditional bank’s wire transfer.
TransferWise is a UK company which has been in the business for long and has therefore created a reputation for both transparency and convenience. The company offers money transfer services to many countries USA included. The good thing with the firm is that it offers the actual exchange rate. With the company, the transfer process is very easy. Just pay the transfer fee and the person you are sending the cash to will receive it in their bank account after a few days.
The company has both online and mobile platforms where it is very easy to understand the sending procedure. The downside though is that the platform has a limit of $50,000 for personal funds transfers. You also cannot exceed $250,000 in transfers per year for personal fund.
The limit is however higher for business transfers as you can send $250,000 per day and up to $1,000,000 per year.
OFX is a good alternative if you do not want to pay some hefty transfer costs. You can send money to as many as 80 countries from the US using the platform. The company is a favorite of many because it does not charge you any transfer fees. The company profits by charging a slightly higher exchange rate but the difference is small which makes the transfer less expensive.
The company usually does bank to bank transfers. Therefore, it will usually take 2 days to transfer cash from your bank account to the recipient’s bank account. It will then take another two days for the cash to reflect in the recipient’s accounts. Therefore, it will take a total of 4 days for the whole transfer process. It might take less than 4days depending on where the recipient resides.
The least amount of cash you can send on OFX is $1000. The good news though is that there is no maximum limit and you can send as much as you want per transfer. As earlier stated though, you can only transfer cash to another bank account and you cannot send the money to cash pickup points.
The company offers 24/7 customer support and also has a very helpful Q/A section which covers a lot of areas and is quite helpful. One of the downsides of the platform is that you must register to see their exchange rates. Another issue is that the company uses some complicated terminologies which you might not understand if you are not wellversed with foreign exchange.
Xoom is a top-rated transfer agency mainly because of its very fast transfer speed. Its web site is also easy to navigate which makes the transfer process less strenuous.
Apart from the fast delivery speeds, the company will charge less upfront fees. They charge $5 when you transfer the cash using a bank account instead of a credit or debit card. However, they charge 3% markup on exchange rate which is on the higher side considering that other transfer agencies charge 1% or less. Having said that though, Xoom is still cheaper than using a bank wire transfer which tends to be more expensive.
The strongest selling point of Xoom is its fast delivery. The recipient can receive the cash within minutes once you send the money regardless of the payment method. At times though, the transfer might take days depending on time zones and the bank’s operating hours.
Another good thing with the platform is that the recipient can pick up their cash at any pick up point so it is not necessary for them to go into a bank. They can collect their cash from supermarkets or any other authorized pick up point. The maximum amount of cash that you can send is $50,000 for personal transfers and you can send the cash through a credit card, bank account a debit card or PayPal who are the owners of Xoom.
The company takes its customer service very seriously and as such they offer 24/7 phone support. The company offers this support in Filipino, English and Spanish. When you call at certain times, you will get help in Arabic, Italian, German and French. The platform is very transparent and you get to see the costs rights away.
4. World Remit
World Remit was founded by a Somali born guy by the name of Ismail Ahmed in 2010. The main aim of the company is to help immigrants and other under banked people to send money around the globe. The best thing about the service is that its services are online which makes the platform cheaper. It is very simple to use the service as all you need to do is sign up and send the cash to the recipient. They can withdrawal it from a mobile wallet, their bank account, or the pickup locations of their choice. They can also get the cash as credit in their mobile phones.
Receiving cash in the mobile phones is quite a unique feature because it helps people who live in areas that they cannot access landline phones. By the end of 2018, people in the US and other 49 countries could send cash in 150 countries.
In order to send the cash using the platform, you need to download the app into your phone and set up your account. In order to send the cash, you need to upload a picture of your ID when making the first transaction. The app is a popular choice for many people because it is easy to use and is also a very secure platform which means that your cash is also secure.
On the downside though, the requirement to upload the ID can be a hindrance as some people do not have one so they cannot use the platform.
5. Bank Transfer
Another avenue that you can use to send cash is bank transfer. Most banks in the US offer money transfer services but they are more expensive. At first, the transfer fees are usually higher and there is also a markup on the exchange rate. Another thing about bank transfer is that you can only transfer cash from an account that you operate with your bank. However, if you want to transfer large amounts, then the bank is the best option. With bank transfer, you are assured of the safety of your cash. Apart from the high fees, the transfer might take longer as compared to other means of transfer.
6. Western Union
Western Union has been in the money transfer business for long and has gained a reputation of being a reliable company. The company offers fast delivery and is present in more than 200 countries and it possible to receive your cash in more than 550,000 locations including banks. The fees are reasonable especially if you are sending cash from your bank account. When sending the money from other platforms, the fees tend to be higher.
Another great advantage of the platform is that the recipient can get their cash on the same day. This option is available when the recipient is to receive their cash from a pickup point. You can also use a debit or credit card to send the cash. When you use the bank to send the cash through your bank, the transfer might take more than a week for it to be processed.
With Western Union, the limit depends on the destination of the transfer. For example, if you are sending the cash to Mexico, the limit is $5,000 while for transfers to India the limit is $50,000. The company has a wide network and for this reason it becomes one of the best platforms to send cash from the US.
The company offers support every day through live chat and the phone. However, you will have a hard time finding the transfer fees on the company’s website.
PayPal is another platform which has transformed the money sending sector and using the platform is quite easy. You can send the cash using your credit card or from your bank account that is linked to your PayPal account. When you use a credit card, you will have to pay the fees that your credit card company charges for sending cash.
If you decide to send money from your bank account, you will incur PayPal fees which vary depending on the country of origin and the destination country.
On the upside, the company is quite fast when it comes to transferring cash especially if the amounts involved are small. The downside however is that the recipient should also have a PayPal account.
Money Gram is another way that you can transfer cash from the US to more than 200 countries. The company has over 350,000 money collection points including banks. The rate markups are high and they might be as much as 3% which is on the higher end.
Due to its massive network, it is quite possible for a recipient to receive the cash on the same day. With the platform, it is possible to send $10,000 per month with personal transfer. Another great advantage is that it is possible even for people without a bank account to receive cash.
When you use the platform’s website, you can send cash from your credit card, bank account and credit card. It is also quite easy to find out the transfer rate and the charges on Money Gram’s website.
How Can I Save Fees For Transferring Money Internationally?
Here are some tips to aid you in this situation:
- The money transfer service companies have their own exchange rate which is different from the standard one and they profit from these rates. So, in order to save money, you should compare their rate with the mid-market rate and select someone offering a rate close to that.
- This exchange rate changes with time and you can save more when the lowest rate occurs. There are some money transferring services which will allow you to set an alert and even execute the transfer when the best currency pair reaches. If possible, send the fund in the same currency.
- Be aware of the hidden fees. Sometimes, money transferring agencies or banks charges the recipient, too. You should also look for the special offers.
- Sometimes, the amount of funds determines the fee. In that case, you may have to limit or increase your fund to justify that cost. Also, if you are a regular customer, you can expect a discount.
- You can actually negotiate the markup rate with some services like TorFX or WorldFirst. It’s a good idea to call and negotiate for the lowest rate beforehand.
How do Transfer Fees Affect Your Total Cost?
In addition to the dissatisfaction of losing money as transfer fee at the time of fund transfer, this fee may cost you more in the future. When you use a credit card to pay the fund you want to transfer, the transfer fee is added to your original debt. If you frequently transfer money, this additional cost will be rather significant at the end of the year.
It will also affect the annual percentage rate. For example, consider that you have borrowed $10,000 with a transfer fee of $500. Then you will receive $9,500 and if you have an APR of 10%, it will be now 10.526%. The APR is increased because you will pay $1,000 ($10,000 x 10 percent) per year in interest, divided by the $9,500 loan proceeds that you actually received in the transfer.
For a short term debt, this situation is far worse. In the previous example, if your debt is outstanding for 6 months, the balance transfer fee will add 10 percent to whatever interest rate you are paying on the loan amount. It is because, as you are paying an interest of 5% which is the transfer fee for just one half of a year, the annual interest rate has become 10%.
FAQ – Transferring Money Internationally
How long do transfers usually take?
The time a transfer takes depends mostly on the provider. Some offer same day services while for others it might take a few days.
What is the cheapest way to transferring money internationally?
The cheapest way to send money internationally is usually through bank transfer. One downside of this method is that it is not as fast.
Can I use PayPal to transferring money internationally?
Yes, it is possible to use PayPal to send money internationally. However, the recipients must have a PayPal account to receive the cash.
Which bank is best for transferring money internationally ?
Citibank is the best bank to use when you want to send cash through a wire transfer.
How much are transferring money internationally ?
The cost of international bank transfers depends on the particular bank and the system they use to charge the transfer fees. Some use percentage, others use a flat rate and so the fees vary.
How do I avoid international wire transfer fees?
The best way to avoid wire transfer fees is by using alternative companies like Western Union and PayPal although they are also not free.
What if I only want to transfer a small amount of money?
For smaller amounts, it is better to use service providers like PayPal. Other companies might impose the minimum amount you can send.
Can I transfer money from my smart phone?
Yes, many companies offer apps that are compatible with mobile phones. Therefore, it is possible to transfer cash from your mobile phone using these apps.
Can I change or cancel an international money transfer?
Yes, you can cancel your transfer within 30 minutes of making the deposit provided the recipient has not collected the cash.
What if I have a problem or can’t track my transfer ?
When you have any issue with the transfer, contact your provider as fast as possible and you will be assisted.
Is it free to register for an account with an online money transfer provider?
Yes, it is free most of the time to set up an account
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- Transfer Money From Checking Account To Prepaid Card Online
There are many people in the US who send money to their friends or relatives who are abroad. As such, they need to find ways to send the cash quickly and securely. Luckily, there are reputable companies in the US which make this process possible. However, it is important to do a thorough research on these companies so that you might not end up paying a hefty transfer fee. We believe that the information we have provided will help you choose the right company to use while transferring cash from the US.