If you regularly need to send money abroad to loved ones, you need an international transfer option that's efficient and affordable.
Sending money overseas can be more challenging than you might think. While there are plenty of options to do it nowadays, it's harder to pick a method that checks all the boxes. Each transfer option has its own currency exchange rate and fees to think about. Plus, there are issues such as security and data protection to think about if you want to keep your money protected when transferring.
To help, read on to learn how to pick the best option for sending money abroad.
The need for efficient international transfers
There are many reasons why you may need to send money abroad. It could be to support family in times of need, provide funds for education, or even to invest.
No matter the reason, every time you send money overseas, it will be subject to fluctuating currency exchange rates and fees from the platform you use.
If you need to send money regularly, it's all the more important to find an affordable solution so that you and your recipient don't lose out too much on the currency exchange.
With a poor exchange rate, the recipient won't get as much value from the transfer, and you may have to send more money to cover the loss — which could increase the fees that you have to pay to transfer the money. It can quickly become expensive to send money abroad when you have to do it on a regular basis.
Different ways to send money abroad
1. Bank transfers
One of the simplest methods to send money abroad is to use your current bank to send money directly to your recipient's bank account. Banks typically charge fees for foreign money transfers, so be sure to check what fees will be applied and whether they work for you. An exchange rate will also be applied, so you will want to check this against other options to make sure it's an affordable option.
2. Wire transfers
Wire transfers are another popular option for sending money internationally because it's easy to change it to a foreign currency. This type of transfer is facilitated by a bank or a money transfer provider. The sender must include the recipient's name, bank, account number, amount, and sometimes the pickup location as well. It's a good option if you need to move large sums of money. However, keep in mind wire transfers can sometimes take a couple of days to process if you're sending money internationally.
3. Peer-to-peer transfer methods
A peer-to-peer money transfer is when individuals send money directly to each other without needing to use a bank. P2P money transfer platforms often have lower fees and better exchange rates than traditional banks offer. They are also some of the fastest ways to transfer money internationally, which may be important if you need to send money urgently.
One of the most commonly used P2P money transfer methods is PayPal because it's widely accessible and recognizable worldwide. It's easy to send money instantly and doesn't require either the sender or recipient to have a bank account. There's typically a charge on the amount sent when sending money internationally, so it's worth looking into the current fees and exchange rates.
4. International money transfer options
Services such as WorldRemit and Wise are also popular P2P transfer methods that are more commonly used for sending money overseas. They usually have lower fees and favorable exchange rates when compared to banks. Most transfers happen quickly — either instantly or within a couple of days, depending on location.
Another popular option is MoneyGram, which is one of the biggest global money transfer providers. It offers secure transactions to locations worldwide.
Factors to consider when sending money abroad
When sending money abroad, there are a lot of options to choose from, including your regular bank, PayPal, Wise, and many more. However, not all international money transfer options are the same, and it's important to choose one that's convenient, accessible, and doesn't cost too much.
Before you decide on one, you should consider the factors below:
Currency exchange rate
Currency exchange rates are affected by multiple factors, including:
- The rate set by the platform you use
- Inflation
- Interest rates
- Political events and instability
- Economic growth
- Government and central bank influence
- Market activity
While these are all things beyond your control, it's still important to shop around and find a platform or bank that offers the most favorable rates or close to the mid-market rate.
Exchange rates change all the time, so you may even want to time your transactions with current market activity. When trading markets are closed, there's typically less fluctuation. However, this may not be convenient for you if you need to send money quickly.
Exchange fees
Many banks and online transfer options will charge a fee for foreign money transfers. These can include transfer fees and fees for receiving the funds, as well as currency exchange fees.
It's important to get a full picture of exactly what fees you will be charged by a bank or other transfer option. To keep your transfers as affordable as possible, look for options that include low fees or just one plain fee for making transfers. Once all of the fees are added to your transfer, it can be expensive to send even a small amount of money abroad.
Speed
While many foreign transfer options can happen instantly, others may take a while to arrive. Check that the option you want to use has a timeframe that works for your recipient as well.
For example, if you need to send money abroad to help your family with an emergency, this should play into your decision of which payment option to use.
Security
It's also important to choose a payment option that has the latest security features, such as data encryption and fraud protection. All major banks and many online transfer options, such as Wise and PayPal, offer a degree of protection for your money, so you won't have to worry about money going missing or someone intercepting the transfer.
Just make sure that whenever you're asked to transfer money, you verify the request is genuine. Fraudsters will sometimes pose as friends or family via social engineering to ask you to send money through P2P transfer options. So always be cautious with money requests.
Affordable international money transfer solutions
It's important to do your research when you need to send money internationally. Things to factor into your decision include the fees, current exchange rates, speed of transfer, and which options are accessible and convenient for your recipient.
Some of the most affordable international money transfer solutions include Wise, MoneyGram, WorldRemit, and CurrencyFair. These solutions all offer some of the lowest fees and best exchange rates and are widely used worldwide to send and receive money internationally.
