This can be done online, in person at a bank, over the telephone or through money order services, and can be completed for domestic transfers or international payments. Usually, the money transfer company acts like a broker, receiving the funds from the originator and then transferring them to the recipient – and in the case of international transfers, the money transfer company will exchange it into the right currency before depositing the funds. Some money transfer companies accept incoming funds from credit cards, while others need a connected bank account. In some cases, recipients can get the funds paid into their bank account or can arrange to collect cash. To handle your money safely and securely, all money transfer companies must be regulated – in the US, this is the remit of the Financial Crimes Enforcement Network, and all members must follow guidelines and stipulations to keep money safe. To make sure that you can trust the company with your money, ensure that they are regulated. In almost every case, a money transfer service is a cheaper, faster and more efficient way to send money internationally than a bank. This is why when you are sending money, either domestically or internationally, you might want to choose a money transfer service instead of a traditional brick and mortar bank.
Key Points to Consider When Choosing a Money Transfer Company
There are any number of money transfer companies available and choosing the right one will depend on several factors:
What Security Features Do They Have?
The security of transactions, especially those completed online, is important. Choosing a money transfer service that has acceptable levels of security gives you peace of mind against cyber threats. Look for SSL encryption, third-party proprietary software, like Norton, and if the account comes with card payments, that it follows the Payment Card Industry Data Security Standards (PCI/DSS). Bear in mind that even with enterprise-level security, online transactions can still be vulnerable to attack.
Fees
This is one of the most important considerations to make. Money transfer companies charge fees for their services, and these generally come under three main headings:
Transfer fees – This encapsulates the costs associated with completing the transfer, such as admin fees. This is the way the money transfer service makes money to keep the service available. Exchange rate margin – International money transfers need to be exchanged into the receiver’s currency, and this follows the exchange rate. Some money transfer companies add on a small margin to the available exchange rate. Other fees – In some cases, the recipient may have to pay fees for the money to come into their accounts. These might be landing fees or SWIFT fees, for example.
Speed
If you need to make speedy transfers, a money transfer service that allows for almost immediate fund exchange would be best – but if you are happy to wait for the transfer to complete, you might find there are fewer fees (and therefore much less cost overall).
Exchange Rate
The exchange rate is simply the rate at which one currency can be exchanged for another. The exchange rate is affected by trading patterns and banks – and in terms of the money transfer service, this rate determines how much the currency you hold is worth when it is transferred.
Countries Offered
Not all international money transfer companies work across the world, so making sure the one you choose operates (and is regulated) in both your country (the origin country) and the destination country is vital. Finding the right service that works in the countries you want should be a serious point of consideration.
Do You Need a Card?
Some money transfer companies also operate accounts where a card can be available, allowing simple withdrawal and spending of money in different currencies. If that is something that would be useful to you, then choose an account with that option.
The Top 10 Money Transfer Companies
Best for: International travelers and digital nomads Wise is more than just a money transfer service – it also offers what is described as borderless banking, allowing users to seamlessly receive money and transfer it between ‘wallets’ – separate pockets of different currencies. Wise also offers a Mastercard debit card so you can make purchases and withdrawals throughout the world in the local currency. Best for: Those who want to work closely with the exchange rates OFX is a great service for those who want to send larger amounts, and with the option of electronic bank transfer and wire transfer to fund it, it is a flexible answer. OFX is an Australian-based company that gets great reviews for its customer service because it has offices in many countries. Best for: Business users and regular transfers Founded in 1996, Currencies Direct is a well-established, long-running service that is known for great customer service. Currencies Direct is not just a money transfer service; it also offers a range of other functions, such as business hedging. It has over 500 currency experts available to give advice and risk management solutions. Best for: Straightforward, no-hassle transfers between major currencies TorFX is an English-based money transfer service that allows multiple ways to transfer – credit cards, bank transfers and over the phone. An assigned account manager works with you to help you get a better rate, and it is one of the most credible companies, thanks to its great reviews and top-notch credit score. Best for: Making transfers from the US and Canada XE is a popular choice for many people looking for a smart way to transfer money – and with enterprise-grade security, XE is a good choice in terms of safety. This service needs a bank account to send money – you cannot use a card to fund the exchange, but the 24/7 account management and great customer service are enough of a draw. Best for: Fast transfers Xoom is a PayPal company, and as such, it is much faster than the competition at getting money to the destination. Funds can be transferred via credit and debit card or bank transfer, and in some countries, you can use Xoom to pay bills or top up a prepaid mobile phone balance. The hefty transaction rates and exchange rate margins make this a costly option in comparison to some of the other money transfer companies, but it is a fast way to send money internationally. Best for: Those who need varied options for funding and receiving transfers WorldRemit has a range of options for funding your transfer and for how the transfer is delivered. Offering the options of cash delivery, as well as bank transfer and even airtime top-up, WorldRemit even offers customers the opportunity to use Apple Pay and Google Pay. Best for: Businesses and freelancers needing to receive money in multiple currencies Because you can request a payment from within the account, it can be used to invoice clients as well as make and receive payments (domestically and internationally). The fee structure is quite complex, so it is not as simple as other money transfer companies, but with most transfers completed almost instantly, it is a speedy solution. Best for: Businesses with international staff and freelancers InstaReM is based in India and offers a quick, simple and easy process for money transfers, especially to the East. Transfers are simply made through the app, and users can earn loyalty points. InstaReM also has a mass-pay platform that allows users to make bulk payments to multiple recipients in multiple currencies. Best for: Sending money to developing countries Remitly is specifically mobile-optimized, making it simple and straightforward to send money internationally. Recipients can pick up the funds from their local back if it is part of the Remitly network, or cash can be delivered to their home address if necessary. With a 100% satisfaction guarantee, if your money doesn’t arrive on time, there is one less thing to worry about when making an international money transfer. Protecting yourself when completing any financial transactions online is important, so ensure that your chosen money transfer company is secure and regulated in both the country you are sending money from – and the country you are sending money to. Any online financial activity should take place with end-to-end SSL encryption at the very least, and if you are asked for any card details, then look for Mastercard SecureCode or Visa Secure which offers at least two-step authorization. Third-party cyber risk prevention, like Norton, or enterprise-level security, can give you additional peace of mind, whether you are transferring from your PC or via an app on your smartphone. The Financial Crimes Enforcement Network (and similar entities overseas like the Financial Conduct Authority in the UK) regulate money transfer companies, so ensuring the company you choose is checked and regulated means that they must follow stipulated guidelines to protect your money. Aside from the regulated and safety aspect, the real decision is a balance between speed, cost and availability. The best money transfer company for you is the one that offers currency exchange in the right currency pairs, in a reasonable time frame, with acceptable fees and margins. WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor, and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.
