International Money Transfer: Where to Do It
Key Takeaways
- You can send money internationally through your primary bank or through a third-party company that specializes in money transfers.
- Markup fees, transfer limits and the countries involved will all inform your decision on which service to use when sending money overseas.
- Transfers can be as quick as the same day or take as long as several days. If you need to send money sooner rather than later, you may have to pay higher fees.
Consumers who are sending money to their families or friends in another country have several options, but the expense and length of time it takes to complete a transfer are important factors when considering a method.
International Money Transfer Considerations
While consumers can choose from a variety of banks and fintech companies to complete a wire transfer, they should consider the fees, limits on transfer amounts, transfer speed, money destinations and transfer countries permitted before making one.
Fees
The fees are what a bank or company such as Western Union or PayPal will charge you to send money outside of the United States. The fee is typically a percentage of the amount. Another factor to remember is that the company will likely charge you a markup on the currency exchange rate. Consumers should not expect the best exchange rate when sending U.S. dollars to another country such as Mexico or China.
Amount Limits
Another factor to consider is limits on amounts. Depending on the bank or company that you select, there will likely be a minimum amount that you can send overseas and also maximums on the amounts to comply with various international banking regulations. The limits could apply to each transaction or be a cumulative amount over a set period of time.
Transfer Speed
One major factor is the length of time it takes the money to arrive in another country. The funds could take several days or more to be available in the recipient’s bank account. There are other options available if the money transfer needs to be basically instant. If your recipient needs the money soon, plan on paying another fee for the convenience.
Money Destination
Some services will transfer money into a bank account, but others will require that the recipient have an account with the service. Determine which option is most convenient before the money transfer occurs. Other companies such as Western Union allow people to pick up actual cash at various physical locations.
Transfer Countries
Shop around and compare the various services since many focus on certain countries and are not available everywhere. In some countries, receiving money from the U.S. may not be an option.
What Are the Best Ways to Send Money Internationally?
You can use the bank where you have a checking or savings account to conduct your international money transfer or open an account with various companies that specialize in sending money, such as Western Union, MoneyGram, PayPal, Xoom, Wise or Paysend.
The fees for transferring money can add up quickly. For example, Pittsburgh-based PNC Bank charges $40 or $50 for international wire transfers. The minimum amount is $100.
Here are some of the top services for sending money internationally.
Western Union. Western Union is the best bet if your family member or friend needs to receive money via cash. The company is located in more than 200 countries with 500,000 locations. Western Union’s fees are comparable to its competitors, and the exchange rate markup ranges from less than 1% to more than 6%, depending on the currency and destination. The amount limits vary by country. Same-day money transfers are possible if you send funds by cash, debit or credit card.
MoneyGram. MoneyGram is the second-largest money transfer provider and competes with Western Union. It operates in more than 200 countries and has about 480,000 retail locations, which is convenient if you want the recipient to receive cash. Transfers from bank accounts are low-cost, but fees via other methods, along with MoneyGram’s exchange rates, which run up to more than 3%, are more costly. Same-day money transfers are an option.
PayPal. Use PayPal if you’re sending money to someone who also has a PayPal account. If you need to send money to a person’s bank account, consider Xoom, which was acquired by PayPal. If you send money from your PayPal balance or bank account, the fee is 5%, with a minimum fee of 99 cents and maximum of $4.99. When you use a debit or credit card, the fee is 5% plus a currency-based fixed fee.
Xoom. Xoom is owned by PayPal, the same company that also owns Venmo. You can send money to about 160 countries via Xoom. The fee for transferring via bank accounts changes based on the country of the recipient, the currency being sent and the amount of the transfer. The exchange rate markup is 1% to 3% more than the midmarket rate.
Wise. The exchange rate appears to be one of the highest, and you can send money in more than 20 currencies and 70-plus countries from U.S. banks. Transfers using a debit or credit card can arrive within a few minutes, but bank transfers take one to three business days.
OFX. OFX works with small businesses. It does not charge any fees, and the exchange rate is less than 1%, but all transfers must occur within bank accounts, and it typically takes one to four business days for your recipient to get the money. The company can transfer money to over 170 countries or 50-plus currencies. The minimum amount of a transfer is $150.
Paysend. U.S. customers can send money to more than 170 countries from its website or mobile app. Paysend charges a fee starting at $1.99 for cross currency transfers that varies depending on the origination country.
