To determine the best national/international money transfer service, we will need to consider several things. We’ll need to look up on the method of transfer, hidden currency conversion fees, stated fees, the total cost of the transfer, reliability and speed of transfer, as well as the “hassle free” factor. These factors affect the performance and affordability of their services.
Let’s start with the basic: the recipient should have an active bank account. The bank account will serve as the destination of the money transfer. There are just a few cases where the recipient will not be required of having a bank account. To get the money they, will just need to present a valid identification card and the transaction details.
Who are the main players in the international money transfer industry?
The main players are established remittance companies which have been in the industry for many years. Some of them have been rolling the dice (standards) since the beginning of internet. They set the standard on the terms of services and rates of every money transfer transaction.
Payoneer is one of leading international remittance companies that offers variety of services. One of their known featured services is they can transfer funds directly to a receiver’s debit card, which they offer at sign up. They have partnered with MasterCard. This feature is convenient on the receiver’s end. The receiver can directly withdraw the transferred funds from virtually any ATM machine which accepts Marstercards.
Outsourcing sites like Freelancer, Upwork (Odesk) and Elance have close ties with Payoneer. They use Payoneer’ service to send and receive member payments, as Payoneer offers just a small transaction fee. Using Payoneer’s US Payment Service, Amazon affiliates also have access to their money easier and faster (no more checks to wait and cash).
The receiver will only be charged on every ATM withdrawal. A standard charge set by the local ATM’s bank will apply at withdrawal. Most ATMs are charging around 3% for releasing funds to MasterCard prepaid cards, and Payoneer also charges an additional $3 per each withdrawal. When receiving money from checks via the US Payment Service, Payoneer also charges 1% of the amount. The foreign exchange conversion is computed by MasterCard at the time of the transaction, using special currency conversion rates, which are in most cases more convenient than local conversion rates.
Despite the great features, Payoneer is only available on selected major affiliate or partners. From a company’s point of view, Payoneer is the best choice if you have many offshore workers. You’ll get the most out of your money and get the best service for your pennies.
PayPal is considered as the forefront of digital payment and have been in the industry since 1998. PayPal’s payment system is being used widely by most of the businesses around the globe. It can transfer funds anywhere using different currencies. The main currency used by PayPal is the US Dollar, any other currencies will be converted to US dollar or from the main currency converted to the local currency.
Basically you will need a bank account if you are planning to use their services. A bank account will be linked to a PayPal account. The standard PayPal charges for every transaction is 4%.
If you have a business PayPal has some strict requirements for you to be a Business seller. You will need to link a credit card (bank account) in order to lift the initial limits set on your PayPal account.
Occasionally, Paypal checks for random suspicious transactions. If you are a service provider you will need to undergo this verification process. After a large non-dispute streak however, you will not be bothered with this process.
Paypal offers two payment options. The payment for goods and services this is ideal if you own a business. The transaction fee is shouldered by the receiver if you will use this payment option. The other option is sending the payment to a family or friend. The transaction fee is much lower and automatically added to the sender, however, in this case you will not be able to dispute the money, should something go wrong.
The downside of their service is they offer a bad currency conversion rate. They will deduct a certain percentage of the conversion fees from the main currency to your country’s currency. For example, on the latest forex exchange the rate for 1 USD is equal to 46.XX PHP. PayPal’s hidden conversion charge for 1 USD make this deal equal to 45.XX PHP. Please note that the conversion rates will often fluctuate depending on the actual Forex exchange rate.
Aside from the hidden conversion fees, the receiver is also deducted a certain amount for the transfer of PayPal credits to the receiver’s bank account. If the transferred money is lower than the specified amount set by PayPal, then there will be a charge. In many cases, you will not be able to transfer more than $500/day back to you credit card.
The transferred credit received by receiver into their bank account for a minimum of 2 days (but it may take up to a maximum of 4 days). This could extend depending on the regular holidays that are implemented in the US and in your country.
Western Union is considered by some as the fastest in terms of speed and reliability. Although their rates are a bit high compared to other money transfer companies, their services are fairly reasonable, especially if you are considering speed above all. A sender can send money easily using the Western Union online services, or by going into the nearest Western Union office. Their friendly associates can accommodate and assist your transaction. There are a lot of options for you to choose when sending money with Western, such as sending the payment to a bank account, to a mobile phone or to a specific branch, for physical pickup. In the latter case, the receiver will only need to show two valid identification cards accomplished by a receiver form that contains the Money Transfer Control Number (MTCN) and other information required on the receiver’s end. Once the verification process is cleared out and completed, the receiver can get the cash instantly and automatically converted into their country’s currency (if preferred).
Western Union is also accepting transfer of funds locally.
Bank to Bank transfer
If you prefer higher rates of conversion, then bank to bank transfer is your best bet. The receiver will get almost the same rate as the actual foreign exchange rate. The downside about this service is the receiver will get the funds after 5 to 7 banking days, weekends not included. In some cases, the funds will be received after 3 banking days, but it all depends on the banks you are working with. This lengthy timeframe occurs because most banks have their transfer services outsourced to 3rd world countries. For example, even though you are a customer of an Italian bank such as Intesa Sanpaolo Bank, your transfer will most likely be processed somewhere in Romania. Wire transfer may also get pretty expensive, depending on the collaboration procedures between the involved banks.
What are the other alternative ways of sending money?
Google Wallet is a digital service that accepts debit cards from other countries. This service is currently available in the US and United Kingdom. You can use google wallet on your Android devices that are NFC-enabled. You can use this service when you pay your groceries or buy any items in a store or mall.
Unlike PayPal, Google designed their service specifically for merchants. Sending money to other Google Wallet accounts is not possible. The good thing about this service is there’s no charge when you use it to purchase something.
Using google wallet is ideal when you are planning on a shopping spree in the US and United Kingdom.
You can also use google mail to send funds by attaching an amount to an email. The funds will be automatically deducted to your Google Wallet after the transaction is successfully forwarded to the receiver. This method is free of charge.
Paym is one of the most convenient ways to send money in UK to banks affiliated to this service. You’ll just need to download the banking app that is applicable to your bank. The affiliated banks are First Direct, Lloyds bank, HSBC, TSB, Barclays, Santander, Halifax and a lot more.
The funds can be sent to anyone as a gift. Users that are not using the Paym banking app can also send funds by entering their phone number. Paym uses a system that will let their affiliated banks to work with the users’ mobile number. A user just needs to register their mobile number and the name of the affiliated bank on their official website, for them to be able to receive and send funds.
Payza – formerly AlertPay
Payza is mainly operating in the US and Canadian territories. However, they also accept transfer of funds from an affiliated bank and other well-known banks abroad. Payza lets you send money to 191 countries and they accept 21 currencies.
You will need to register before accessing their services. The registration is free of charge, but the fees for money transfer are rather high compared to PayPal. However, they offer competitive rates, compared to other money transfer service providers. If you are receiving funds, you will pay 2.50% + €0.25 EUR (or equivalent). If you want to withdraw funds to your credit card, it will cost you $8.00 (or equivalent). If you want to withdraw directly to your bank account, the cost is $20. Adding funds directly from you bank account will also cost you $20, while adding money to Payza from your credit card will release you of 5%.
Paymate is widely used by sellers in New Zealand and Australia to get their payments from their buyers abroad. Sellers using this service can get their payments on EBay Australia for a substantial fee.
If you buy from a Paymate merchant, you won’t need to register for an account. You’ll just need to key in the credit card information to proceed with the purchase making the process easy and hassle free. All of your credit card information is handled securely by Paymate. As part of their commitment on providing a quality service, the non-disclosure agreement is utmost practiced.
Skrill – formerly MoneyBookers
Skrill lets you receive and send money to other users. Skrill is used by approximately 10 million people, which can transfer funds in 40+ currencies. Most Skrill users are from gambling and casino sites. You can send funds using a debit or credit card. You can use Skrills to transfer funds to major cities in other countries. Every country has a specific rate for receiving and sending funds. Skrill focuses on sending funds among users, merchant accounts are few so it’s popular to cycle the money. Their services are far competitive to those offered i.e. by PayPal. Receiving money is free, while sending costs 1% of the amount sent, with the maximum cap of €10.
Dwolla is only available in the US. They offer a flat rate of 25 cents, and if the money transfer is below $10, then it’s free!
You will just need to sign up for you to be able to use their services. Expect for the standard plan which has limited functionality, all their other plans are paid, starting at $25, and ending with $1500+. The free money transfers usually take time. They also offer a $3 monthly payment for a feature that allows you to instantly send your cash to the bank. You can download the Dwolla application on iOS, Windows and Google Play Store.
Do you know about the Foreign Exchange broker service?
If you are planning to transfer a huge amount of money, then your best bet is to find a suitable Foreign Exchange broker. The persuasive reason why it is better than the usual way of sending money is the higher exchange rates and lower fees.
Did you know that FX companies are 2-3% cheaper than any usual way of transferring money? That’s the usual business on most FX companies.
Using this method is good for regular money transfer. For example, in the United Kingdom FX companies offer corporate deals that don’t require any fees and they can freeze the exchange rates prior to the sending of the funds.
The sender will only need a bank account, debit card or a credit card to send funds using the FX service. The receiver is required to have a bank account. The FX company can offer free or minimal transaction fees for a regular payment. The sender will be given a privilege of locking exchange rates to have a financial constancy.
FX companies usually operate 24/7 for convenient access anytime and anywhere. The receiver can get the funds after 24 to 48 hours. In some cases, the funds will be received instantly. This method is very easy and a convenient on the sender’s end because it can save time and money. The transferring of funds can be done using the online banking service.
In conclusion, there’s no straight answer to the question Which is the best online money transfer service?, but based on the facts presented above, Paypal, Payoneer and Skrill are among the most convenient. It’s now up to you to find out if your bank accommodates these, and at what cost. Last but not least, I would love your feedback on this subject.