Best Way to Send Money Internationally

In this fast-paced world of globalization, where more and more people stay abroad, either temporarily or permanently, the need to send money back home is real. Global cross border payments totaled $1.9 trillion in 2018, according to McKinsey. To make payments as efficient as possible, several companies have stepped up, offering innovative solutions. In this article, we’ll explore some of the best ways to send money internationally.

Reasons to Send Money Abroad

There are multiple reasons that people send money back home. It varies from person to person. But the most common reasons to send money from abroad are the following:

Bills Back Home

When you grow up in one country, say Mexico, you use resources and accumulate bills to be paid later. These resources could be real estate, education, or anything along those lines. When people move abroad, they still have to pay their bills. So to pay them off, they send money back home to the biller. As you’ll see later, certain methods are better suited for this type of transaction.

Sending to Family

When people move overseas, they usually go alone or with their spouses and children. But other family members — parents, siblings, cousins, etc. — stay behind. So, your family might be in South Africa, but you have moved to the U.S. As a responsible family member, people send a certain amount of money back home. This ensures their family can take care of themselves financially.

Best Ways to Send Money Internationally

If you’re someone sending money overseas for the first time, you’ve got multiple options at your disposal. These vary by speed of transaction, fees, and location. You must learn about each one of them to select the best payment methods for you. Here are some of the best ways to send money internationally:

Your Bank

Bank transfer, also known as wire transfer, is the easiest way to send money overseas to your home country. Chances are you already have a bank account in your foreign country; you can start the process by simply calling a representative. Usually, banks do not have international remittance services activated. When you open a bank account, you’re restricted to domestic remittances, so you have to submit a request to send money from overseas. Once the request is approved, you’ll be able to add a beneficiary, set an amount, and send that money to a bank account holder located overseas.

The rates vary depending on your bank and the amount. Intra-bank charges are usually less than inter-bank charges. The processing time is between two and three days. This method is also completely safe and guarantees that the beneficiary will receive the money. As a downside, you must note that wire transfers, both nationally and internationally, are nonreversible. Once sent, you cannot request them back. Therefore, you must make sure you’re sending it to the correct account.

Western Union

Western Union was established to make payments easy irrespective of location. They operate over 100,000 branches in 185 countries. Thus, you can conclude it’s among the most efficient ways to move money across the world.

To send money via Western Union, you have two options. You can either visit their website or their physical store. You’ll be given a form to fill out the foreign beneficiary’s information. Then you’ll hand over the amount to the Western Union staff, and they’ll do the rest of the work.

The main advantage of using Western Union to send money overseas is that the foreign beneficiary can pick up the cash at his/her local Western Union store in minutes. You do not have to go through a lengthy form-filing or verification process. Therefore, charges are more expensive than with a wire transfer. But if reaching a remote location or transaction speed is your concern, Western Union is perhaps the best option.

PayPal

PayPal is another excellent processor for sending money anywhere in the world. Consider it the digital version of Western Union. You send money from your PayPal account to the beneficiary’s PayPal account. So both of you need to have a PayPal account or at least have access to one.

PayPal requires that you connect your bank accounts to it. Once you send money, the amount will be deducted from your account and deposited into your family member’s PayPal account, which he/she can then transfer to their bank account. For this, you need to pay fees both to PayPal and the bank.

This way, you can skip the process of activating international remittances at your home bank.

PayPal recently came out with Xoom, which offers lower fees. So, check out this service if you often send money overseas.

TransferWise

TransferWise is a relatively new service for sending and receiving money overseas. It follows a peer to peer payment mechanism where there are no middlemen involved. This way, their fees are lower than both PayPal and an international wire transfer.

Not only that, but it is also transparent when it comes to exchange rates. It doesn’t wait for the rates to go up so it can disburse less money. Instead, it transfers the money as soon as you send it on your end.

TransferWise has a mobile app you can download, which lets you control the entire transaction process from your phone.

OFX

OFX specializes in foreign exchanges. Hence, it offers the best possible rates and fees compared to other providers. You can inspect the foreign exchange rates in real-time using its app. Forward Contracts ensure you do not end up paying more than the current exchange rate. Also, Limit Orders get you the best price in the near future. Both these features allow OFX to operate more like a foreign exchange broker than a banking provider.

Creating an account at OFX is easy, and it’s even easier to send and track payments.

Remitly

Similar to OFX is Remitly, which specializes in foreign remittances. Fees vary depending on how much you’re sending and how fast you want the payment to process. A larger amount usually has a lower fee. For payment to particular countries, there are no fees if you send $1001 or more. For speed of transaction, it offers two options: Economy and Express. Economy mode can take up to a few hours, whereas in Express mode the amount is transferred in minutes.

Frequently Asked Questions

Are There Fees for Using These Services?

Yes. All of these services charge fees for transferring money overseas. Banks, Western Union, and PayPal charge higher fees compared to services like OFX and Remitly, which are more focused on exchange rates. 

How Long Will My Transfer Take?

Most services are instant or within a few minutes. Bank transfers can take up to two days. 

Are There Limits on How Much I Can Send?

Yes, but it varies from processor to processor. Banks limit it to $5,000 per day. PayPal has capped the limit to $10,000 per month. It also depends on the type of account you hold.

Conclusion

The use of technology has made sending money overseas easy and seamless. With future innovative technologies like Blockchain and AI, we can expect a further reduction in fees.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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