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9 min read 21.01.2022 692
Ibrahim Busari
Ibrahim Busari
Ibrahim is a fintech writer at AskWallet
The Cheapest Way To Send Money

The Cheapest Way To Send Money

Sending money internationally has become more convenient, thanks to a wide range of options available online. In the past, you would have to queue at your bank branch, fill out forms and pay high transfer fees on top of the exchange rate spread between sending and receiving currency. However, in today’s world, there are dozens of providers competing on price and convenience that offer cheaper rates and faster transfers than traditional banks. This buyers’ guide will introduce you to some of the cheapest ways to send money abroad. So you can choose the provider that best suits your needs.

If you are searching for the cheapest way to send money internationally, you will end up having to choose from a list of money transfer apps. Many of the money transfer services have started to spring up more and more, often allowing users to send money internationally at little to no cost. 

As we have stated, there are lots of money transfer apps out there. Nevertheless, before we give you a list of the cheapest ways to send money. Let us take a look at what international transfers work and how money transfers services function?

What Is An International Money Transfer?

Sending money overseas is a fairly easy process, but there are many things you must take into consideration. When transferring money internationally, services such as Visa have to first convert your funds into US dollars before changing it to the recipient’s currency. However, this is not the case for MasterCard as they utilize direct conversion into the recipient's currency. 

The most important thing to know is that sending money from one country to another involves converting your home currency into U.S. dollars and then converting them again into foreign currency. 

When comparing the costs of sending money from one country to another, keep in mind that not all companies operate on equal terms, so compare exchange rates carefully before choosing a provider for your international transaction. 

Some providers charge for every part of an international transaction; others include fees in their exchange rate or have only minor changes. Find out what each provider's fees are before making a decision.

How Do Money Transfer Services Work?

There are three basic ways money transfer services work. First, you can use an exchange-based money transfer service, such as Western Union or MoneyGram. These are usually available at a retail location in your area and offer fast transfers to any location where there is an agent, cash pickup, or ATM access. 

The second option is a bank-to-bank service that requires you to initiate transfers online from your bank account. These tend to be much slower than exchange-based services but also have better rates and less fee for amounts transferred over a certain amount (usually around $1,000). The range of products can be dizzying, with some being better than others for different purposes and travel situations. 

The third option is transferring money locally or internationally using peer-2-peer. Transferring money via P2P (peer-to-peer) platforms is one of the cheapest ways to send cash overseas. There are a number of popular services offering P2P transfers, such as Wise(Formerly TransferWise), PayPal, TransferGo, and many more. 

What are the Different Types of Money Transfer Services?

The market for money transfer services seems to keep rising and more players keep coming in. However, this wasn’t always the case. We will look at some of the traditional international money transfer services as well as modern ones. You can check out the difference between traditional and mobile money transfer services in our other article. 

So, there are four main types of money transfer services available: 

Wire Transfer 

These are typically used for large amounts of money sent internationally. You’ll likely have to pay a fee to your bank, and you’ll typically need your recipient’s bank information.

It can take one or two days for funds to clear, but many financial institutions offer an online interface that lets you track these funds. All in all, wire transfers can be a bit costly, but they work well if you need them immediately.

Bank Draft 

A bank draft is a type of check that a bank issues directly. While you can use it like cash, you’ll need your account number and a routing number. In most cases, it takes one to two business days for a bank draft to clear. This means that your recipient may not have access to his or her money immediately.

Because they take longer than other methods, they tend to be less expensive but also aren’t as convenient. The upside is that they are nearly impossible for fraudsters to forge because they are tied directly back to an actual bank account.

Money transfer apps

If you’re sending money from abroad (usually from one developed country to another), your best bet is probably an app-based transfer service. These services take a cut of a fraction of a percent and don’t charge an extra fee. The biggest companies in this space are probably PayPal, Worldremit, and Azimo —all three allow you to send money directly from your account with them (or using an associated debit card). 

They also all let you send money using your smartphone’s contact list or email address book—great for sending small amounts quickly. If you don’t have any or much cash on hand, these are great tools.

Money order

Though they’re a bit old-fashioned, money orders are still accepted everywhere and charge a little fee. If you’re sending money internationally, however, be sure that whoever you’re sending it to is expecting a money order and not cash. Otherwise, it might take some time for them to figure out what happened. This can cause delays or rejection of your request. Other than that one consideration, you can use money orders as safely as cash. There's no risk in them getting lost or stolen in transit like checks are often prone to doing.

Cheapest Way to Send Money

 

Cheapest ways to send money Peer-to-Peer 

 

Paypal 

Paypal is the oldest and biggest peer-to-peer payment service that is still running to this day. You can send and receive money for free when you use PayPal. It is also one of the cheapest options for transferring money from your bank account. What's more, if you’re a frequent PayPal user, you may qualify for special offers and incentives like discounts or coupon codes. The downside is that it may take up to 4 business days for transfers to go through. You can also connect your checking account or credit card with PayPal so you don't have to pay from an existing balance.

Fees: When sending money to friends and family domestically with PayPal, there are no fees. As long as they have a PayPal account. However, if you will be sending money locally via credit or debit card, you will be subjected to a 2.9% fee. When sending money internationally, you will be charged the aforementioned fee plus a fixed fee depending on the currency.

Timing: If the recipient has a PayPal account the time to receive funds is almost instant. In the case where you are sending money to a bank account, the transaction might take 2-5 business days. 

Transaction limits: If you have a verified PayPal account you have no limit on how much money you can send in total. However, there is a limit in the amount you can send in one go. In a single transaction, you can be limited to $60,000

Territories: Paypal is available in 200 countries/regions and supports 25 currencies.

 

The cheapest ways to send money internationally

 

WorldRemit

If you live in a developed country and have family or friends overseas, you’ve likely thought about sending money at some point. It can be expensive (especially if you use Western Union or a similar service), but there are plenty of options available, including WorldRemit. 

WorldRemit allows people all over the world to send money transfers via cell phone. In addition, since it is linked directly with mobile carriers, these transfers can be nearly instantaneous. they offer much better exchange rates (and instantaneous delivery). If speed and value are your most important factors when choosing a service for money transfer, then WorldRemit is probably your best option.

Fees: When using WorldRemit the transfer fee varies depending on the recipient's 

Timing: The funds can be made available to the recipient almost instantaneously. However, home deliveries can take anywhere from 24 hours up to a week to get delivered.

Transaction limits: For debit, credit, or prepaid cards, you can send up to $9,000 in 24 hours and $5,000 each transaction.

Territories: Available in over 130 countries including the United Kingdom, Germany, EEA countries, the United States, and many more!

 

The cheapest way to send money when traveling 

Wise (Formerly TransferWise)

If you are a freelance nomad or just someone looking to travel the world and worried about how to keep your finances in check. Look no further than Wise. This money transfer service provides everything from an IBAN account to international money transfer and mid-market exchange rates. You also get a Mastercard to pay for things abroad without worrying about fees, including withdrawing cash at ATMs.

Their fees are also clearly visible on their website; you’ll know how much your transfer will cost before you pay for it. Wise does a great job helping you save money, but what we like most about them is that they will help you avoid bank fees from transferring money in-country. It’s especially useful if you plan on sending a lot of smaller amounts; for example, when friends and family want to chip in for a present. 

Fees: There are no monthly account fees. The only fee you will need to pay for is the exchange rate which is at a mid-market rate somewhere between 0.45% to 3%. On the other hand, ATM withdrawals are free up to $250 per month. After this, you will be subjected to a 2% fee. 

Timing: The transaction done via Wise will be delivered in a matter of seconds 

Transaction Limit: There is no limit on the amount you can receive with the exception being funds that are in USD. There is a daily limit of $250,000 and a yearly maximum of $1,000,000.

Territories: Available in over 50 countries including Australia, Argentina, Canada, China, Colombia, Czech Republic, Denmark, Hungary, New Zealand, the United Kingdom, and many more!

Honorable Mentions 

 

Azimo

A global money transfer service that uses a variety of transfer methods and currencies, Azimo is specifically designed for non-bank customers. They’ve kept things simple, making their website easy to navigate and allowing users to send or receive money in over 150 countries around the world. Their aim is to always offer great exchange rates and low fees with fast delivery—though they are unable to specify delivery times due to third-party services. Overall, Azimo provides a fantastic platform for sending and receiving money all over the world.

 

TransferGo

Save time and money with free transfer gives you access to UK's best-value international money transfers. It's simple, safe, and secure: you can send money in over 50 currencies at mid-market rates. There are no hidden fees, no minimum or maximum transfers and unlike some banks, it works out cheaper if you move more. 

With instant rate alerts for every currency, receiving your money has never been easier!

In just two minutes open an account online from wherever you are on your mobile, tablet, or laptop. You will receive an activation email with instructions on how to deposit money into your account. 

 

OFX

Offering transfers in more than 120 countries and boasting zero fees, OFX is arguably one of (if not) the best transfer companies for sending cash abroad. Since their rates are so low, they can often be considered a good choice even for local money transfers where fees are generally lower. It’s possible to send USD without opening an account, and there’s no need to verify your identity.

Final Thoughts 

If you’re sending money, there are a number of reliable ways to do it. While some methods are less expensive than others, all of them offer a fair price for the service provided. 

Whether you’re looking for fast delivery or extra security, there is a method that will be perfect for your needs and budget. In order to choose which method works best for you, consider how much cash you want to send and how fast it should get there. Also keep in mind that fees depend on several factors: currency exchange rates, network fees, and conversion fees (if applicable). 

Although prices fluctuate over time based on these elements, choosing an online provider with low commissions can save you serious cash. That’s where our service comes in, we research and bring you the best of the EMI world and help you compare between money transfer apps to make the right choice for you.