What is the best way to send money internationally?

Are you looking for the best way to send money internationally?

Most US banks offer foreign transfer services. However, they tend to be expensive and tedious as they involve a ton of manual paperwork and often hidden fees. According to the World Bank, traditional banking solutions are still the most expensive money transfer services around, offering fees on average of 10.89 percent per $200 transfer. The global average cost of migrant remittances is 6.75 percent per transfer. The global average, as calculated by World Bank, is the average total cost of sending $200 through RSPs worldwide.

Thankfully, you have a wide array of alternatives to choose from that won’t burn a hole in your pocket. Modern banking solutions such as mobile money transfer tools provide the cheapest ways to send funds to another country.

Here, you’ll learn about the most affordable ways to send money overseas.

Cheapest way to send money internationally

How much does it cost to transfer funds across the world?

That depends primarily on your preferred method of transfer. Banks, as mentioned, tend to cost more than online payment systems like PayPal and BOSS Revolution. These service providers offer varying transfer fees and exchange rates.

Let’s say you want to transfer $300 to Mexico. Find out which providers offer economical and convenient methods for international cash pick-up transfers.

  Wells Fargo PayPal Boss Revolution
Fees $5 $3.99 $2.99
Exchange Rate 1 USD = 19.9194 MXN 1 USD = 19.7298 MXN 1 USD = 19.8000 MXN
Transfer Speed 1-2 business days Same day Same day

The data shown in the table is up to date as of April 12, 2021. Current data may differ slightly due to changes in policies and fluctuations in the exchange rate.

The cost of foreign transfers will depend on a wide range of factors, including the total amount you want to send, the payment method, the country you’re sending the money to, and the delivery method.

While the rates may vary significantly per service provider, it’s evident that the cheapest way to send money internationally is through an online payment solution.

If you wire money from Wells Fargo, outgoing fees can cost about $35 to $45 depending on the currency. But using their ExpressSend service, you can cut costs significantly. You’ll be charged $5 for transfers up to $1,500 to Mexico. Your recipient will have to pick up the cash at Walmart locations.

PayPal also has varying rates, depending on your payment method. If you’re paying with a debit or credit card for a bank deposit, you’ll be charged with a $3.99 fee. However, if you’re sending money from your PayPal balance or a linked bank account, you won’t be charged with a transfer fee.

You can also save a lot of money by using an online payment system like BOSS Revolution, which has low transfer fees and competitive exchange rates.

Using money transfer tools, you can calculate and compare rates from multiple service providers. You can do it quickly and easily.

International money transfers between banks

Sending money through your US bank has its advantages and drawbacks. It’s one of the most secure ways to transfer large amounts of money to a different country. The downside is that it can take several days for the funds to show up in the recipient’s bank account. On top of that, bank transfers are more expensive than digital banking services.

As of the third quarter of 2020, the average cost of overseas money transfers to the same bank or a partner bank was at 5.58 percent per $200 transaction. The cost of sending money to a different bank was significantly higher, averaging 7.24 percent per $200 transaction.

What recipient information will you need to transfer money internationally?

The requirements for foreign transfers can vary from bank to bank. In general, you’ll be asked to provide your intended recipient’s personal information and banking details.

Here are some of the requirements you need to provide:

  • Recipient’s name
  • Address
  • SWIFT code
  • Bank account number
  • International Payments System Routing Code

Sending international money transfers without a bank account

Even without a bank account, you can send funds overseas using various methods. The best way depends on your preferences, as well as your recipient’s preferences. Most money transfer companies like BOSS Revolution offer multiple payment methods that won’t require a bank account, including the following:

Pay with Cash
If you don’t want to take out funds from a bank account, you can send cash to a recipient overseas through a money transfer service like BOSS Revolution. At their retail partners, you can transfer money to another country bank account. If the recipient doesn’t have one, you can choose other delivery methods such as cash pick-up and home deliveries. You can also have it sent to their mobile wallet.
Pay with a Debit/Credit card
Instead of paying through a funded account, you can use a debit or credit to pay for your foreign transfers. Just note that using a credit card vs. a debit card is usually more expensive than other transfer methods.
Money orders
Using the US Postal service, you can use a money order to send funds to participating countries. This is perhaps the slowest method of transfer. It also limits the amount of money you can send. Depending on where you’re sending the money to, you can transfer up to $1,000.
Mobile payment apps
Another way to send money internationally is through a mobile payment system. Whether through a desktop or a smartphone, you can send money to anywhere around the globe in an instant.

Sending money from a credit card

Credit cards can be used for foreign transfers. Banks, as well as payment solutions like PayPal and BOSS Revolution, can use your credit cards to transfer funds around the world. But are they cheaper compared to other methods?

According to the World Bank, transferring funds internationally from a debit or credit card costs an average of 5.13 percent per $200 transaction. However, if convenience is your priority, then the cost might be worth it.

Advantages of credit card payment Disadvantages of credit card payment
Less risky Higher transfer fees
Widely accepted payment method for online payment systems Higher exchange rate margins
Convenient for emergencies Banks charge interest

Sending money for cash pick-up

If you want to send money to a person without a bank account, you can use an international money transfer service like BOSS Revolution, which specializes in international transfers and offers various delivery methods, including cash pick-ups.

A few minutes after completing your transaction, the recipient can pick up their cash at one of many thousand locations worldwide.

Advantages of cash pick-ups Disadvantages of cash pick-ups
Doesn’t require a recipient’s bank account More costly than fund transfers to a bank account
Fast transfer speeds (funds available within minutes) Low maximum limit for transfers
Senders have multiple payment options Risk of theft
Convenient for recipients Cash pick-up locations might be far from your recipient’s home

Can you deliver money to your recipient’s home?

Yes. Using money transfer services like BOSS Revolution, you can have the funds delivered directly to your recipient’s address abroad for certain destinations where this service option is available. They won’t have to drive to a cash pick-up location to receive the funds, which can save recipients money, time, and energy.

These door-to-door cash transfer services are convenient, but they have a few drawbacks as well. Make sure you weigh the pros and cons before choosing this transfer method.

Advantages of home delivery Disadvantages of home delivery
Doesn’t require a recipient’s bank account Slow transfer speeds compared to cash pick-ups
Recipients can receive cash right at their doorstep Not all countries offer this service
Quick and easy for senders and recipients Risk of theft

How to send online top-ups through cell phones

A mobile top-up is a way to transfer credit to a recipient’s mobile number. Even if that person is in a different country, you can send minutes and data with the help of the right service provider.

Using BOSS Revolution, you can send airtime credit to mobile phones from 150+ carriers across 90 countries. You can stay connected with your friends and loved ones, wherever they may be in the world.

Does a digital wallet have to be linked to a bank account?

No. Digital wallets won’t always require a bank account. However, you will have the option to link a bank account, a debit card, or a credit card to your digital wallet. You can also pay for transactions such as foreign money transfers using the balance in your account.

Are there hidden fees?

Not all providers are transparent about their fees and extra charges. Some companies will claim to have zero transfer fees, without telling you that they have exorbitant exchange rate markups, which can drive up the costs.

Here are different types of fees that you should watch out for:

Transfer fee

Whether you use banks or online money transfer systems, you’ll have to pay a transfer fee to send the money overseas. It could be as low as $1.99 or as high as $45 depending on your service provider. If you’re sending large sums of money, your service provider could charge a specific percentage of the total amount of your transfer.

The transfer fee may also vary depending on where you’re sending and how you’re sending the funds—a debit card, a credit card, or a bank account, to name a few. It can range anywhere from 0.5 to 3.9 percent.

Exchange rate margin

An exchange rate margin, which is often called a hidden fee, refers to the difference between mid-market exchange rates and the exchange rates offered by banks and other financial service providers.

Simply put, it’s how service providers profit from foreign transfers, which is why there is often a lack of transparency when it comes to this type of fee. It’s also called a foreign exchange margin or an international conversion margin.

Commission fee

On top of transfer fees and exchange rate margins, banks and financial service providers like Western Union and MoneyGram may charge commission fees for their services. These usually aren’t flat fees. They depend on the amount of money you’re sending. For instance, banks and foreign exchange providers might take one percent of the total amount you send abroad.

How to get the best exchange rates for your money transfers

  • Look up the mid-market rate for your currency.
  • Get quotes from various service providers.
  • Compare all those rates to the mid-market rate. You can avoid hidden fees by selecting the option closest to the mid-market rate of your currency.
  • A high exchange rate is always ideal if you’re sending money.

How to transfer a large amount of money overseas

  • The best way to transfer large sums of money to another country is through your bank. Although it’s slow and costly, it’s so much safer than mobile transfer apps.
  • Online payment systems aren’t ideal for sending large amounts of money internationally as they limit the funds you can send at one time.
  • Always compare multiple providers to find the best option for your budget.

How long does it take to transfer money internationally?

Foreign transfers take longer than domestic transfers.

If you’re sending money abroad through a bank, it can take anywhere from two to five business days. Sometimes, it might even take longer as banks can hold your money while they verify the transaction. Additionally, the transfer speeds can vary per bank. Hence, it’s always best if you check with your bank beforehand.

If you’re sending money internationally using a debit or credit card, it’s going to be a lot faster. Your recipient can receive it within the same day you sent it.

The fastest way to send money to another country is through peer-to-peer transfer systems and other mobile financial apps. They offer instant transfer speeds. That means your recipient will be able to see the funds in their mobile wallets right after you complete your transaction.

Tips to save on international money transfers

  • Don’t hand your money over to banks and other financial service providers until you receive their rates.
  • Before sending money abroad, compare all your options. As mentioned, banks and financial service providers offer varying rates and fees. This way, you can save on foreign transfers and ensure that your recipient receives enough funds.
  • Compare the rates you receive to mid-market rates, which is what banks and other financial systems use when they trade with each other. This lets you determine if there are hidden fees.
  • Instead of using traditional banking solutions, you can use mobile payment systems to transfer money instantly and avoid excessive fees.

Sources: all third party information obtained from applicable website as of April 12, 2021

This article is provided for general information purposes only and is not intended to address every aspect of the matters discussed herein. The information in this article is not intended as specific personal advice. The information in this article does not constitute legal, tax, regulatory or other professional advice from IDT Payment Services, Inc. and its affiliates (collectively, “IDT”), and should not be taken or used as such by any individual. IDT makes no representation, warranty or guaranty, whether express or implied, that the content in this article is current, accurate, or complete. You should obtain professional or other substantive advice before taking, or refraining from, any action on the basis of the information in this article.

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