Many of us have sent money to people across geographies at some point or the other. Most of us have gone with the most accessible of methods – bank transfer. However, there are many other options available to help you make a easy transfer and that too at cheaper fees. Most methods are now quick and reliable but have their own unique features. Let us look at the different methods one can use to transfer money.
Two important points to take care of when choosing a transfer partner are the Fees and Exchange Rates. Lower the fees, higher is the money transferred to the receiver. Also, exchange rates can vary vastly from one mode of transfer to another. The effect gets magnified if you are transferring a large amount.
- Bank Wire Transfers
Financial institutions and banks have an international transfer facility and wire transfers. Banks require various KYC and documentation for verification of purposes.Also, these are quite expensive if required on a regular basis. Most bank wires are considered safe and cost effective for domestic transfers.
- Credit Cards
This is the preferred mode of payment in online shopping and paying to third parties through a payment gateway. It suffers from the issuing of being stolen, copied or hacked if not kept carefully. You can request for a “virtual” card for unknown transactions to enhance safety and unauthorized usage. You are also not liable to pay for incorrect transactions on account of the bank. The good feature here is no auto-debit. You can verify and confirm or cancel a transaction as the money does not leave your account immediately.
- Debit Cards
These pose a greater threat as the money is debited immediately form your account. A “pre-paid” card can help you keep a tab on the withdrawals on this card and also keep a check on expenses. If there is no money above the exact requirement, the misuse will keep your checking account money safe. The charges on this are usually that of bank exchange rate which can be high.
- Money Transfer Companies
Most common and popular names of money transfer companies are easy to use. They might even offer a lesser fees but are missing out on the most important aspect – customer service. This becomes crucial when one sees issues crop up in terms of delay of transfer, how transparent the process is and how they can assist you in incorrect transfers.
Most of the big names have a reach over 100 countries and have no transfer limits. Each service may have either a percentage of the amount transferred or a flat fees upto a certain amount, as a chargeable fees.
These companies fall under the purview of the regulatory guidelines and oversight and have stringent procedures, KYC guidelines and regulatory disclosure from time to time. Hence they are very careful on the pattern of transactions and origination and destination accounts and countries. Companies like Boxypay which fall in this category they take their security and privacy protection very seriously and employee a dedicated. Fraud prevention team to monitor transactions and suspicious activities. This can be specially a life -saver if you need to send money to countries like Ghana or Send money to Senegal where incidence of frauds is high.
Points to Note:
- Some companies charge a flat fee even for transfer limits up to a certain point. So even if your transfer amount might be much, the flat fee might prove expensive to you.
- Some services have a delivery time of 3 to 5 days. Be aware of these timelines beforehand if the intended recipient requires the money urgently
- Wire Transfers are completed within 1 to 2 days but cane easily cost from $20 upwards. Also, on some services, the recipient’sbanks levy extra charge on receiving money from a wire transfer. Be sure to calculate these costs , especially if the recipient is family.
- Online Apps
Many online companies operate through their separate wire services or apps. Some services allow you to transfer $10,000 in a single transaction and are easy to use. On using a debit or credit card through such services you might end up paying 2.9% per few cents of transactions fees.
Other apps like Google Pay are known for their speed and free usage. However, it is mainly for peer-to-peer usage and you cannot stop transfer or verify transactions. You can miss out on purchase protection in these cases.Purchase protection is the insurance claim you can get against unauthorized use and debit from your transfer method, like in a credit card.
- Draft Checks
Another method is a lower one – Draft checks which you can get authorized and made from your bank. If the transaction is not a hurried one, you can send a draft check by courier to the recipient and he can encash it at his bank or financial institution. The entire process might take 15 to 20 days but will at the cheapest rates.
Finding the Best Exchange Rate
One can obviously search on the websites of all these companies to get a quote of the exchange rate offered to customers. However to be able to negotiate with a company, if you will be going for a long-term requirement, one can try looking up their mid-market rate for currency exchanges. This is the rate at which these companies purchase the currencies from banks and other financial institutions. One can do a general currency exchange rate search on the internet. This is the rate at approximately the money transfer company might be purchasing.
Peer-to-peer service providers can provide you much nearer to the mid-market rate prices.
You can compare on the basis of charges each company has – You will come across three types of charges –
- No transfer fee – fees waiver is given when you cross a certain threshold for money transfer like $5,000.
- First transfer fee – Many services offer this feature to allow you to try out their service with the use of a promo code.
- Low Fees – Finally, most services will offer you a low fees after the first free remittance, promising to provide mid-market rate.