It costs a lot to do an International money transfer. Even with the high cost of International money transfer, money sent back to relatives is the largest source of foreign investment for many African and Latin American countries. Traditionally, people have used a money transfer agent such as Western Union or used a bank wire transfer to send money to relatives and families. With the advent of the internet and prepaid debit cards, there are now more choices when sending money overseas.
Choices for International Money Transfer
There are now many choices for International money transfer. These choices include cash transfers, money orders, bank transfers, prepaid debit / ATM cards, eWallets, or credit cards. See below for the advantages and disadvantages of these different types of International money transfer methods.
Cash Transfers
Cash transfers using a money transfer agent is a convenient, but expensive method to transfer money overseas. Western Union and MoneyGram are examples of money transfer agents. With a money transfer agent the sender gives the cash to be sent to the local money transfer agent, and the receiver then can collect the cash at a local money transfer agent. Both Western Union and MoneyGram will also accept payment online or by phone to transfer money overseas.
International Money Orders.
International money orders are cheap, but they have to be mailed to the recipient. If you use an United States Postal Service (USPS) money order, it can be cashed in most banks or post offices in foreign countries. Banks and financial institutions also offer money orders, but money orders other than the USPS may be difficult to cash.
Bank Transfers
Bank transfers are convenient and secure if at least the receiver has a bank account. The sender does not have to have a bank account as most banks will accept cash from a non-bank customer for a bank transfer (fees will be higher for a non-bank customer). Many banks offer banking accounts that cater to multi-currency transactions at a very competitive rate. Most banks provide various International money transfers options such as wire transfers, currency exchange, money orders, bank drafts, and even ACH services.
Transfer Money To A Prepaid Debit / ATM Card.
A prepaid debit card is a great way to avoid high International money transfers fees. Great for family members where money is transferred on a regular basis. You can either send the recipient an ATM card containing the money or transfer money to a re-loadable ATM card that the recipient carries with them. You can send money to the debit card from your bank account, eCurrency, credit card, or another prepaid debit card. Many ATM cards now carry the Visa or Mastercard logo which means that they can be used at ATM machines or be used for shopping instead of converting the money to cash.
Transfer Money Using an eWallets.
eWallets can be a cheap, secure way to transfer money if both the sender and receiver have access to online accounts. An example of an eWallet is PayPal that specializes in person-to-person payments online. There are also several International companies that fulfill the need for a global currency by offering private eCurrency backed by gold. By using the gold standard there is no need to convert currency. Money transfers between eCurrency accounts can happen in seconds. In most cases you can open up an eCurrency account for free. Depending on the financial services company, there are many ways to add eCurrency to your account and to transfer the eCurrency to your local financial institution and local currency.
Transfer Money Using Credit Cards.
Credit cards can be a convenient way to transfer money between a parent and a student studying overseas. Credit cards can also be a way to readily receive cash by using the cash advance feature on most credit cards. You can also have multiple cards issued to family members tied to the same account. Then for example, a parent’s college student needs money he would just use a cash advance at an ATM to get cash. The downside to cash advances on credit cards is that there are many times additional fees and higher interest rates tied to a cash advance vs. just regular credit card purchases.
