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If you want to send money to your loved ones abroad, you would be happy to know that the process to send money overseas has become easy and convenient. Unlike in the old days, you do not need to visit a physical location or wait for the bank to open. Thanks to the internet, you can make an international money transfer from the comfort of your home.
So, what is an international money transfer?
Most people do outward remittance with international money transfer. Although they are similar in many ways, there are noticeable differences too. For instance, outward remittance means the transfer of money to an overseas account. Whereas, there is no such distinction in an international money transfer. It simply refers to a transfer of funds from a home account to an overseas one.
How does an international fund transfer work?
There are three players in an international fund transfer – the sender, the recipient, and the money transfer service provider. To send money overseas, you (the sender) need to initiate a money transfer with your preferred service provider. You will need to provide the recipient’s details, such as name, account number, SWIFT code, etc. You also need to pay the transfer fees and the transfer amount to the service provider.
After that, the money transfer service provider will send money overseas to the recipient. The entire process can take between 2 to 4 working days.
What are the available options to send money overseas?
● Bank-to-bank transfer
It is one of the popular options to send money overseas. You will need to visit your bank and request an international money transfer. However, it is worth noting that banks generally charge a higher transfer fee and markup on the foreign exchange rates compared to online platforms. Although the charges are higher, your hard-earned money is safe with the bank. If the recipient is unable to receive the funds, you can always ask the bank for a refund.
● Online platforms
With the emergence of internet users, money transfer services are creating online platforms to help you send money overseas at a relatively lower fee and more transparent process. To send money abroad, you will need a net banking facilities with your bank account. The best part about online money transfer services is that they are transparent and levy low transfer fees. It also helps you know how much you need a transfer can cost you in advance.
● Cash transfer service
It is a popular option among people who are underbanked or want the recipient to receive cash. To send money overseas through a cash transfer agency, you will need to visit a physical location, fill in a mandatory form, and pay the required fees. The benefit of opting for a cash transfer service is that the recipient can receive the funds within just an hour.
What are the costs involved in an international money transfer?
It is difficult to know exactly how much it costs to send money abroad. The transfer fees and foreign exchange rates vary across different service providers. Therefore, it is crucial to compare multiple service providers based on their transfer fees and foreign exchange rates before sening money abroad:
● Transfer fee
As mentioned earlier, the transfer fee depends on the service provider. Some banks charge a fixed transfer fee for an international money transfer. Others decide the transfer fee based on the destination country and the mode of payment for the transfer.
● The markup on the foreign exchange rate
The transfer fee is not the only cost associated with an international money transfer. Most banks charge a markup to the foreign exchange rate to convert your money. It means that you will have to pay 3-5% in addition to the transfer fee.
So, it is imperative to know the transfer fees and markup charges on foreign exchange rates before sending money abroad. Doing that will save a significant amount of money on your transfers.
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