Why Is It Important To Compare Money Transfer Services And Remit Rates?

There are several ways one can transfer money overseas – some traditional, some emerging. However, these money transfer methods can be quite different from each other in terms of service and cost. Before you compare money transfers, it is beneficial to make a remittance comparison and decide on the method that suits you best.

But when you compare remittance rates, it is essential to know the options available, what they offer, and who they suit the most. So here are some of the popular money transfer options available to you when you compare sending money abroad.

Bank Wire Transfer

One can remit money overseas via bank wire transfer, either in person or online. This is an electronic transfer between two banks where both parties have a bank account. Banks are a safe mode of money transfer and very convenient for both, the remitter and the receiver. In terms of money transfer fees comparison, banks charge a fee for the transaction and are also likely to charge an exchange rate mark-up.

This mode of transfer is ideal for those who prefer to transfer money from one bank account to another. It allows you to send large amounts of money in one go and is especially convenient if you want to send money to a business. Since banking regulations and safety protocols cover the process, your money is safe from unscrupulous hackers.

Inter – Bank Transfer

An inter-bank transfer is possible with major banking organisations that have a multinational presence. For example, if the remitter has an account in a branch of a particular bank in both the countries and the recipient has an account in the same branch of the bank as the remitter in the receiving country, there is a possibility that the bank will allow free transfer of funds between the two accounts.

This method is best used when both accounts are in the same currency. You may not be charged a bank fee, but you may be charged heavily on the exchange rate mark-up. It must be noted that not all banks have this facility; many offer email money transfer instead.

Online Payment Platforms

Online money transfer can be done in a matter of minutes using a smartphone or computer. Money can be transferred through such online payment services with the email ID or the phone number of the recipient. The fee charged is transparent, and so is the exchange rate.

This method is popular for its hassle-free process as there is no paperwork or banking information involved; all you need is the recipient’s email or phone number. This method is widely used for transferring small sums of money, for example to pay freelancers working overseas.

While the person receives the money instantly, the process of transfer from an online account to the bank account may involve some time and cost. However, there’s transparency of cost involved, which is usually a percentage of the remittance.

Money Transfer Operators

These are remittance specialists with ground presence across the world, and one can make remittances between branches and partners within an IMTO’s network. Players like Xpress Money – with a presence of 200,000 agent locations across 170+ countries – can facilitate instant remittance to bank accounts, enable cash pick-ups, remit to mobile wallets, or even offer doorstep delivery of cash.

The cash pick up method is ideal for those who want to send money instantly and where the recipient needs cash at the earliest. It is also suitable for people who don’t have access to the internet; they can drop in to the nearest agent/branch to pick up the cash. Convenience is a given, as the recipient doesn’t need an online account, or to sign in, or provide documentation.

With a unique transaction number, the beneficiary can collect the money from any branch of the IMTO’s network from anywhere in the world.

The cost is generally higher than cheaper options like online transfer, but companies like Xpress Money are bringing down the costs drastically through the process of streamlining and strategic partnerships. Therefore, this service is widely popular among expats.

Peer – to – Peer Currency Exchange

This is a relatively new mode of international remittance whose USP is low-cost money transfer at high speed. With significantly lower charges, this method safeguards the remitter from fluctuating bank rates and exorbitant exchange rate mark-ups.

The service provider here is essentially a software that provides a peer-to-peer marketplace for the user, who can set their own currency rates and buy/sell at that rate. This method can take some time as it requires you to set up an account and transfer funds to that account. Although it is cheap, it is not always easily comprehensible for the average expat family member.

It is always important to compare money transfer options and also compare remit rates before you perform a transfer. Remittance comparison helps you to get the best rates on your transfer.

Before you compare sending money abroad, there are various aspects that need to be taken into consideration. Here are some factors that will affect your money transfer fees comparison:

• Check whether there are two different currencies involved, or if the remittance can be made in the same currency
• Compare the currency exchange rate
• Is it a large amount or a small one?
• Is it a recurring payment or a one-off payment?
• The urgency of the money transfer
• The preparedness of the recipient (availability of internet, branches, literacy etc.) should also be assessed in remittance comparison
• The person’s exact financial need – is hard cash required or will a credit to an online account be good enough?
• Safety of the method also needs to be considered when you compare sending money abroad

While sending money abroad, small calculations may become important. For example, online payment platforms charge a fixed percentage, so if you’re transferring a large sum of money, even a small percentage can lead to a significant amount. So it is always wise to compare remit rates with respect to all possible criteria.

When you compare money transfers, you will have to strike the right balance between your requirements and what works best for you.

 

References

^1. https://www.compareremit.com/money-transfer-guide/different-ways-to-send-money-to-india/

^2. http://echeck.org/best-ways-to-send-money-abroad/

^3. https://www.policygenius.com/blog/the-best-ways-to-send-money-internationally/

^4. https://www.investopedia.com/financial-edge/0411/7-low-cost-ways-to-transfer-money.aspx

^5. https://www.bookmyforex.com/blog/transfer-money-abroad-india-guide-2017/

^6. https://www.finder.com/in/international-money-transfers

^7. https://www.wikihow.com/Send-Money-from-India