How to send money internationally
There are many reasons why you would want to transfer money abroad. Whether it is to send funds to a family member and friends or to purchase international goods, many households in the U.S. send billions of dollars overseas every year.
With today’s technology, transferring money overseas has never been easier. They are quick, efficient and generally low cost.
In this article, we will be breaking down the different ways of transferring money internationally, our top picks for money transfer services, and so much more!
Keep reading to find out more.
What are money transfer services?
A money transfer service helps people and businesses send money abroad securely from one person to another. Banks, credit unions, and specialized companies provide these services.
While many services allow free instant money transfers within the U.S., sending money internationally is more complex. An international transfer service usually has upfront payment and adds extra to the exchange rate. This means they take a percentage on top of the regular exchange rate when converting currencies.
For instance, if you use Western Union to send money overseas, they might charge up to 3% extra.
There’s always a fee to send money across borders. Be cautious of any app claiming to offer free international money transfers– it could be a scam or have hidden charges. Generally, fees should be under 5% of your international money transfer amount.
Certified money transfer services are the quickest and safest way to send money abroad, and they’re much safer than sending cash. Plus, using their simple online platforms is easier than setting up your own international wire transfer to a foreign bank.
Ways to send money abroad
There are many methods of transferring money overseas, which are listed below.
Bank-to-bank transfer
Certain banks allow you to transfer money directly from your bank account to someone else’s. You can arrange these money transfers online, over the phone, or in person at the bank. There might be transfer fees, and you’ll need both bank accounts and routing numbers.
Some banks might have special programs for smaller international transfers. But, it’s crucial to check the exchange rates because the bank could still make money from the transaction, even if there is no fee.
Wire transfer
You can transfer big amounts of money from one bank account to another using a wire transfer. A bank officer at the sending bank handles the paperwork for these money transfers, usually done in person.
You have to pay fees for this service, but international wire transfers provide protection from both banks, which makes the cost worthwhile. In the U.S., you must do wire transfers before 5 p.m. EST to get the money on the same day.
Automated clearing house transactions
Automated Clearing House (ACH) transactions work like wire transfers, but use a computer-based clearing house as a go-between to handle money exchanges. The Federal Reserve Bank, the main ACH operator in the U.S., processed about $154.7 billion daily in 2022.
ACH transactions don’t have transfer fees, but both banks must be connected. Both sides have to follow the specific instructions from their banks in order to facilitate the transfer.
Cash-to-cash transfer
If someone wants to send cash abroad, they can use walk-in transfer centers. They deposit money at one of these centers, which converts it to the destination country’s currency. The recipient can pick up the money at a participating center, or in some locations, they provide a delivery method where you can have the money brought to your home or office.
Big companies like Western Union, Moneygram, and Ria offer this money transfer service with locations in many areas around the world. Fintech companies like Wise, Payoneer, Paypal, and WorldRemit that can also do international money transfers.
Prepaid debit cards
Certain money transfer services offer the option to transfer your money internationally using a prepaid debit card owned by the recipient’s bank account, often online.
The recipient can then take out the money or use the card for purchases like a regular debit card. Usually, there are fees to activate the prepaid card or a monthly fee to use it.
Our top picks for the best ways to send money internationally
Without further ado, here is our list of the best international money transfer services that will allow you to seamlessly send money internationally.
Airwallex
Airwallex supports transferring funds and payments in over 110 countries, allowing you to send money internationally at relatively lower costs compared to traditional ways of sending money overseas.
This money transfer service is particularly useful for businesses that send money internationally on a regular basis. You’ll be able to manage your employees’ spending limits and they can upload their expenses in real time.
While it doesn’t have physical locations, Airwallex offers physical and virtual corporate cards for purchases to receive and send money internationally at competitive exchange rates. It allows smooth integration with software and simplifies payment processes with their SWIFT payment and other payment methods.
Check out our Airwallex review for the full inside scoop on this money transfer service.
Wise
Wise allows you to quickly transfer money internationally with low initial fees and competitive exchange rates. They can help you send money between 70 countries.
Formally known as TransferWise, Wise is a financial technology company that promotes itself as providing “borderless banking.” You can easily send money using their platform, even if the recipient has no Wise account. Simply provide the recipient’s information, like their bank details, whether it’s a checking, savings or high-yield savings account.
Wise offers various payment methods, including credit and debit cards, wiring, ACH and SWIFT, as well as Apple Pay and Google Pay.
Doing a bank transfer with Wise is a bit slower than other services and might take up to a week. But if you use Wise’s credit or debit card transfers, it’s almost instant, typically within three minutes.
You can do a money transfer online using their website or mobile app. Wise offers live customer support and a 24/7 helpline.
Wise’s exchange rate markup is average or slightly above average, which can vary depending on the foreign currency, but they don’t add any extra fees, so they’re quite affordable overall. Plus, their transfer fees are low.
With Wise accounts, there are no monthly maintenance fees, and you can withdraw money for free twice a month if it’s $100 or less.
PayPal
PayPal allows you to quickly send money between accounts worldwide, making it convenient for sending money to friends or family overseas. It’s been around for a while and is great for smaller, instant transfers.
With PayPal, sending money overseas becomes a breeze using just the recipient’s email address. But be cautious and only send money to people you trust, because PayPal can’t refund you for scams.
One perk of PayPal is that you don’t need to use your bank account for international transfers. You can add money to your PayPal balance from your debit card or bank account, and then send it internationally. This way, people in other countries won’t see your bank info. However, sending money from your PayPal balance to a bank account might take an extra day.
Creating a PayPal account is free and available in over 200 countries, accepting 25 currencies. They have customer service through a helpline and live chat.
The main downside of PayPal is its fees. They charge a 5% fee for international transfers, ranging from $0.99 to $4.99 per transaction. This could add up, especially for businesses that are doing regular transfers. There is also a limit of $60,000 per transaction, with certain countries having an even lower limit of $10,000.
Because of these fees, PayPal isn’t the best choice for everyday payments. However, it’s convenient for making quick transfers without a bank account. You can link a debit or credit card, or use your account balance from previous transactions. This makes it a good option for occasional payments among friends and family.
Western Union
Western Union is widely available for transferring money internationally. It offers four ways to do so: online, over the phone, through its mobile app, or in person at one of its 500,000 branches worldwide.
You can use Western Union to deposit cash into an overseas bank account or arrange a cash pickup. This is handy for sending money to someone without a bank account.
As the sender, you can drop off money at a Western Union location or send it online or via the mobile app (using a credit card, debit card, or bank account). The recipient can then pick up the equivalent amount in their local currency at their nearest branch.
This method of sending money is praised for its customer service, offering live chat support and three international phone lines. You can also get help in person at any Western Union branch. Its widespread availability, various ways to send money, and helpful customer service make it a top choice for international transfers.
However, it’s not the most affordable option. Western Union’s exchange rate differs by country and is often higher than average. For instance, sending $500 to Mexico City may cost about $2, but sending the same amount to London could cost up to $12. The exchange rate markup can vary, making it unclear how much your transfer will ultimately cost.
OFX
OFX may not be the quickest service, but it’s safe and has no transfer fees or maximum limits, making it perfect if you’re sending more money regularly.
If you’re sending more than $1,000 to an international bank account and don’t mind waiting a bit, OFX is worth considering. This online service is available in 190 countries and doesn’t charge fees. You can do a bank transfer straight from your account using the OFX website or mobile app.
OFX only allows money to be transferred between bank accounts, so you can’t use your credit card or cash to make payments. This adds a layer of security since bank transfers are the safest method for sending cash internationally, reducing the risk of theft or identity fraud.
However, the downside is that it’s a slower process, taking up to four business days or more, depending on banking hours and holidays.
Although OFX doesn’t charge fees for transferring money internationally, most currency exchanges come with a cost ranging between 2% and 4% of the total transfer amount, which is higher than other ways to send money overseas. While they offer 24/7 customer service, OFX doesn’t provide live chat services.
MoneyGram
MoneyGram is a top choice for a quick transfer, with 380,000 service locations worldwide and low costs. They charge minimal upfront fees and usually complete a transfer on the same day, no matter how you send the money.
Similar to Western Union, MoneyGram offers various ways to send money internationally. You can do it through their website or highly-rated mobile app, transferring money between bank accounts or to a MoneyGram location. You can also simply visit a MoneyGram branch and hand over the money for a transfer.
MoneyGram’s app has a live chat feature, but they don’t offer customer support over the phone, so you’ll need to visit a branch if you need to speak with an agent.
Another drawback is their exchange rate markups, which can be as high as 3% of your total payment. While most transfers have a $10,000 limit, some transactions from the U.S. to certain European countries allow up to $15,000.
Advice for international money transfers
Here are several factors you should be aware of before you transfer your money internationally:
1. Understand how exchange rates function and where to find the best exchange rate
Money transfer companies often make money by adjusting exchange rates. While their rates may not match those found on dedicated exchange platforms like Bloomberg or Reuters, these platforms can provide a reference point for the current rate.
When evaluating rates offered by services like Western Union, pay attention to the markup on the foreign currency amount. A higher markup means a lower exchange rate and less money for your recipient.
2. Compare the total cost of transferring money from various services
There are two main costs to consider: upfront payments and exchange rate markups. Look for a service with the lowest fees and the most favorable exchange rate.
Typically, online non-bank services offer cheaper transfers compared to traditional banks.
3. Avoid paying with a credit card
While some services accept credit card payments, this may result in higher upfront payments and additional costs imposed by your credit card issuer, such as interest and advance fees.
Transferring funds directly from your bank account is usually a cheaper (albeit slower) option. If you require speedy delivery, choose a debit card instead, which typically incurs lower fees than a credit card.
FAQs
How long do international money transfers take?
They can take a few seconds to several days, with credit and debit cards taking a few minutes, cash pickups taking one day, and wiring taking three to five business days.
Is sending money internationally safe?
Yes, they are safe if you do it right and ensure you use a certified, well-known service.
Are international money transfers reported to the government?
Yes. In the U.S., banks report wire transfers over $10,000 to the IRS. This helps the government look out for and prevent tax evasion, money laundering, terrorist financing, drug dealing, and other crimes.
What is the cheapest way to transfer money internationally?
Bank transfers are usually the cheapest option ,with the cost of being slower than other services.
Conclusion
Now that we’ve covered the best money transferring services, you can make an informed decision about which service suits your needs. These services are quick, efficient, and generally low cost with many positive reviews from happy customers.
Exercise caution when transferring cash abroad. Use a well-reputed service and follow the regulations to ensure your money is safe from scammers.