How to Compare Money Transfer Companies
There are almost as many ways to transfer money abroad as there are reasons for doing it. New technologies and new companies are constantly evolving to meet the ongoing and increasing demand for reliable international money transfer options. Options such as online money transfer providers, prepaid cards, SMS payments, peer-to-peer lending, and money transfer operators (MTOs) provide safe and cost-effective ways to send your money overseas without the high fees and strict sending limits of a bank.
Compare the best money transfer deals
THE EASIEST WAY TO COMPARE TRANSFER PROVIDERS
A number of companies today offer consumers an easy way to compare methods for sending money overseas. Often, this is the best way to compare your options and find a money transfer service that meets your needs. These companies offer businesses and individuals a range of choices for the best and most efficient way to transfer money internationally, by researching lower-cost and higher-service alternatives to the typical bank. They do this by comparing a selection of the best providers from around the world and then vetting them to ensure that they offer the best products and rates, provide security of funds, and adhere to all regulations and relevant money transfer laws.
Money transfer comparison websites look at a variety of metrics to determine the trustworthiness of money transfer providers. These metrics include analyzing whether the transfer service:
• Meets all relevant regulatory requirements (e.g. FCA
in the UK or FinCEN
in the US)
• Provides a safe, transparent transaction environment
• Maintains a high level of customer service
• Offers the best prices and low- or no-fee options
• Provides local market services
To help you compare all the options available, the following list summarizes the different ways to send money overseas that are available today, along with a brief description of how each works.
Foreign Exchange Providers (FX Brokers or Money Transfer Providers)
FX brokers are specialists in the international money transfer business and offer their clients individualized, tailored services for sending money abroad. If you need to transfer large amounts of money for starting a business or buying property, or if you need to make regular overseas payments, FX brokers can often offer you the best FX rates, often along with lower fees than what you’d pay at a bank. Typically, you will need to open an account with the FX broker first, then fund this account using your bank account. For smaller amounts you can often use a credit card. FX brokers have numerous benefits, including the ability to lock in a favorable fixed exchange rate to use over a period of time, low fees, and specialized experience in the international currency markets.
Money Transfer Operators (MTOs)
MTOs provide money transfer services, typically using transfer agents. Examples of MTOs are Western Union
and MoneyGram. These companies typically do not require you to open an account to use their services, and often have offices in popular areas, including shopping malls and post offices. Many MTOs today offer mobile phone transfers and online money transfers. To send money using a MTO, you will need to complete a company form and provide some form of identification.
Online Money Transfer Service Companies
These companies offer the ability to send money overseas through their online-based system. You will need access to a secure online service, a bank account or credit card, and a valid e-mail address. You’ll first need to register and establish an account with the online transfer service provider, and it’s possible that you will also need to provide the bank account and email address of the person or entity that will receive the money. Benefits of online money transfer service providers are that they are generally reliable, and typically charge lower fees than a bank.
Peer-to-Peer Money Transfer Providers
A peer-to-peer company provides a platform to allow senders and receivers of different foreign currencies to trade directly with one another. In this type of transaction, buyers and sellers are able to set their own rates, and by dealing directly with one another, this cuts out the banks’ fees and exchange rate margins, potentially saving both parties money in the process. Examples of peer-to-peer money transfer providers include CurrencyFair
. Typically, you will be required to register with the peer-to-peer money transfer provider before you can participate in transactions.
Prepaid Money Cards
Prepaid money cards are a convenient alternative for obtaining small amounts of foreign currency and are widely accepted in many countries. They can be used to send money overseas, for making online purchases, or for travel in a foreign country. They’re also accepted at ATMs globally for withdrawing cash (wherever Visa or MasterCard is accepted).
Prepaid money cards work the same way as a credit card or debit card, and typically have many of the same benefits. Before you can use the card, you must first load funds onto it, and can only spend up to the amount put on the card. Prepaid cards are easy to order online and are also available in selected shops.
Most banks offer money transfer services, however it’s standard at most banks that you must either already have an account with the bank, or apply for an account before you can use the bank’s transfer services. Banks typically have strict restrictions on the amounts you can send overseas, tend to charge higher fees, offer less competitive exchange rates, and take longer to transfer your money. The costs of using banks to send money abroad is measured by the International Money Transfer Index
Compare the best money transfer deals