Despite an increase in the volume of international money transfer over the years, the global average cost to send money internationally remains high. According to the World Bank, the average cost of sending money is 7% globally.
When you are sending money through a high street bank from the United States, depending on the bank you use, the usual international money transfer fee through a high street bank could be cost you up to $30 to send $500 when you are sending money through your checking account or savings account. Banks are one of the most expensive ways to exchange money, transfer funds, and send money overseas.
The good news is that the money transfer options have expanded over the last few years. You can find money transfer services in convenience and drug stores, supermarkets, retailers such as Walmart, and stand-alone storefront operations. Traditional brick and mortar agencies are expensive too.
The cheapest way to send money internationally is through Money Transfer Service Providers online. Tech-enabled
platform-agnostic money transfer service providers have lower costs and offer higher exchange rates compared to their traditional payment methods by cutting out the middlemen.
This brings us to the next point of discussion, which money transfer service provider should you use?
Compare the transfer fees, speed, exchange rates, and the terms of the services provided to pick the best and the cheapest way to send money internationally that suits you.
- Fees: Banks and money transfer companies charge different fees. It may be a fixed amount or a percentage of the amount you are sending. Fees are also charged depending on the method of payment you want to use. Payment made with a credit card or debit card instead of bank transfer to send money comes with its own fees. Normally, credit card charge fees are higher over a debit card or bank account transfer.
- Speed: Some transfer service providers also charge fees depending on the speed of the transfer. Faster transfer speed that takes only a few minutes to reach the recipient costs fees over a slower transfer speed.
- Exchange Rate: The exchange rate is the value of a currency compared to another currency. It is set by the Foreign Exchange Market or simply Forex. The rate is determined by the demand and supply of currencies at any point in time. Banks and money transfer companies make money from the difference in the exchange rate of the currencies. Ultimately, sending money internationally without spending a dime is not easy. You will be charged either in the form of a fee or through a lower exchange rate. However, it is right to find the cheapest way to send money also using reputable companies and services.
Here are some of the cheapest ways to send money internationally online:
- TransferWise: TransferWise is an online money transfer service provider based in London. TransferWise reviews are very positive, with many verified users rating excellent for their high exchange rate. They offer mid-market exchange rates, which is the rate that you would see on Google of XE.com also known as the “real exchange rate.” TransferWise has a transparent fee structure and it is one of the cheapest ways to send money online.
- Western Union: Western Union is one of the oldest and undoubtedly the most well-known money transfer companies in the world. It operates both online and offline models with a large agent network span across many countries. Their branches are almost in every country in the world. Their fees and rates change by location and type of transfer you choose. Western Union is best known for its convenience and speed, usually within a day for Cash Pickups or few business days for bank transfer. It may not offer the best exchange rate in the industry but definitely the cheapest way to transfer money compared to banks.
- WorldRemit: WorldRemit also provides online money transfer services. It does not have physical locations where you can convert cash to transfer like traditional money transfer companies such as Western Union. WorldRemit Transfer fees range from $3.99 to $24.99 depending on the currency you are sending in, the recipient’s country, the amount of money, and the delivery option. It is one of the cheapest international money transfer service available in the market. Find out more about WorldRemit.
- Xoom: Xoom, a PayPal service has been providing quick and affordable money transfer online services for 14 years. It also has wide coverage, allowing customers to send money to 131 countries around the world. You can also use multiple payment methods; debit or credit card, bank transfer, or PayPal balance to send money overseas through Xoom. Our favorite feature is their money-back guarantee. Xoom will refund your transaction in full if your recipient does not receive the money. Xoom is also popular for its speed, high transfer limits, and exchange rate. Read how you can save money on transfer fees through Xoom.
- Remitly: This Seattle-based online money transfer company is one of the users’ favorites. Remitly offers competitive exchange rates. And if you are sending $1001 and above, your transfer fees will most likely be waived off. Remitly users can only send money in an electronic form through the website and mobile app. Their online model helps them save huge cost and are able to pass on the benefits to its users by offering low transfer fees.
- Skrill: Skrill is a very popular money transfer company amongst the tech-savvy and crypto enthusiasts. You pay ZERO fees when you send money internationally through Skrill. In addition, Still offers interbank exchange rates.
- OFX: OFX is another money transfer service provider popular for offering low transfer fees. OFX is known to be strict with its user's identification and verification. This makes it a little longer to get a verified account. Once you clear this step, you can send money through bank transfer or wire transfer or credit/debit card.
To find the cheapest way to transfer money internationally that works for you and suits your needs, compare the top money transfer services providers said-by-side, and save on every transfer. Check out what's on offer on CompareRemit today.