International Money Transfer... a traveler's guide
A common challenge faced by traveling Australians, British, New Zealanders, South Africans, Canadians and other expats is sending money internationally. Bewildering arrays of choices exist for international money transfer and finding a fast, secure and inexpensive money transfer service is not always easy. WORKgateways understands this, from first hand experience, and we offer our cumulative insight in this guide to international money transfer. In this page we present and compare all the best options available; from western union money transfers to sending a money order online.
If you think of the bank as doing you a favour by allowing you to keep your money with them, you will be a step ahead in understanding the system, and less bewildered after your UK bank encounters.
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You have several international money transfer options...
...the best one for you will depend on your particular situation.
In general there are two situations in which travelers, expats and working holiday makers find themselves:
Situation 1
- Primary Aim is to Work
- (You are settled in the country where you are going to be sending or receiving money internationally)
- You do have a bank account
- (...in the country where you are going to be receiving or sending the money)
- You need to send money orders online with value greater than 500GBP
For Situation 1 click here
Situation 2
- You are passing through the country
- (where you are going to be sending or receiving money)
- You do not have a bank account
- (in the country where you are going to be sending or receiving the money)
- You need to send or receive money for sums less then approx 500GPB
If Situation 2 best describes your situation,
you may wish to utilize an established, global money transfer company
such as Western Union or Travelex.
Everyone has heard of Western
Union, the original international money transfer company who
probably started with the pony express. Travelex
is another well known company that has services very similar to
Western Union. Sending money through these companies are nearly
always in-person, cash transactions. Outlets exist nearly everywhere
in the world. Western Union money transfer will pay out only in
cash. However in some countries, Travelex will transfer cash to
a bank account, rather than require an in-person pick-up.
*If you are in need of money from relatives or friends also consider asking them to make a payment to your Credit Card.
Summary – Situation 2: Money transfer organisations such as Western Union and Travelex seem to be a better option for people traveling in remote locations and who are not settled there (no bank account or address). Their services are also suitable for travelers overseas who need quick cash sent from home by family or friends.
Pros & Cons of Situation 2
Pros:
- No location too remote
- No internet access required,
- No local bank account required, send and receive cash.
- Send a money order online to third parties - or to yourself if you'll be there to pick it up.
- Sending your money order online occurs quickly - can be done in minutes.
Cons:
- Money transferred in cash making large sums unmanageable,
- In-person pick-up is required - you must go to the actual Western Union representative and fill out a form.
- Your recipient must pick up in person.
- A quick-fix solution - not a long term solution.
- You cannot transfer money from an account or from your credit card - cash only.
- You can't send a money order online to yourself - unless you'll be back at home immediately to pick it up.
How much does it cost? Transferring money through the above companies will usually cost either a percentage of the total amount transferred, or a set fee for certain amounts. Therefore the amount ending up with your recipient will depend on the exchange rate and the transaction fee (percentage) that Western Union charges. For example – sending 500 GBP will cost approximately 37 GBP – these fees change and you should check with your nearest Western Union or Travelex outlet.
Best for: receiving relatively small sums of emergency cash from your friends/ family back home.
Worst for: the amount of money that actually
ends up in your pocket. Consider both the exchange rate and fees
to calculate and compare companies.
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Situation 1
If Situation 1 best describes your circumstances
(You plan to settle in one location for a while and you have a local
back account), you can save a lot of money, time and hassle by transferring
money through an International Money Transfer Service. The growth
of the e-world has brought with it a new breed of online money transfer
companies that are highly cost competitive and user friendly compared
with transferring through regular banks.
Until relatively recently, banks themselves were the only option.
Then, companies like Tranzfers, and 1st Contact launched
a better service. Note: If you only intend to do one or two transactions
you will save some paperwork, though not necessarily money, by just
using the banks’ transfer services.
The lowdown on the key players
- Online Money Transfer Companies (send money order online)
- Banks - Money Transfer Services
Money Transfer Companies
If you want to use Online Money Transfer Companies there are two things you will require:
- Secure Internet Access
If you have a home or your own work computer - perfect. Using a public-access computer is possible – but guard your passwords and transactions very carefully from prying eyes. (*Also be sure to turn off Google Desktop Search - A Local Bank Account
You will need to have a local bank account (at your overseas destination) from which to transfer your funds home, or vice versa (a bank account at your overseas destination into which you can transfer money from home). See UK bank accounts to learn more about opening a bank account.
Offers fees far less than a financial institution/ bank – excellent if you plan to make more than a couple of overseas transfers.
- 7 pounds or AUS/NZ$15 for each transfer.
- Competitive exchange rates that they say beat the banks.
- Tranzfers moves money in both directions, between the UK and AUS, NZ, SA, Singapore and now Canada.
- New countries are being added so do enquire.
- Tranzfers is meant to take two to three business days.
- A minimum transfer amount of 50 GBP and AUS/NZ $100.
- Payments can be made to credit cards in AUS, NZ or SA but not to credit cards issued by UK banks.
How does it work: most of these companies operate their transactions in the same manner. First, you register with them online and input details of the transaction you would like to make (you usually have to fax a certified photocopy of your I.D. due to banking regulations). Once you have registered and been approved, you are given the money transfer company's bank account details. Through online banking at your financial institution, you deposit the amount you wish to transfer into their bank account. Based on your (or a 3rd party's) recipient details you have already supplied during the registration process, the money transfer company will deposit your money into the recipient account.
Pros:
- A cash-free world - all transactions can be done electronically.
- You do not have to go in person to any retail outlets. (However you do have to fax a certified photocopy of passport to most money transfer companies before proceeding electronically - UK banking regulations).
- Some of the companies allow you to pay off credit cards back home, or you can send a money order online to yourself or to friends and family - all you need are the recipient's bank account details.
- Top up your account at home - especially if you have direct debits coming out of your home account - like mortgage payments etc.
- Fees are reasonable - between 7 and 10 GBP and currency rates are competitive
- You can transfer money from the UK or to the UK - countries include UK, AUS, NZ, SA, Canada and the list is growing. Some companies offer services to only some countries - be sure to check.
Cons:
- You must have a bank account in the country from which you are transferring and which you are receiving (the latter is required only if you are sending to yourself).
- You must have access to a reliable internet connection - ideally a private computer at home or work.
- You must have access to either online banking or telephone banking through your financial institution.
- Fraud: if you are uncomfortable with depositing money into a company's bank account, or online money transfer you can either ask friends who have used the service before, or you can do an electronic transfer by visiting a bank teller - although additional fees will apply for this last option.
- Payments using cheques or credit cards are not accepted - electronic funds transfer only.
- Eligible countries are limited - be sure your home country is covered before proceeding with a money transfer company.
Best for: periodically transferring your working holiday earnings from your local overseas account to your home bank account - monitor the exchange rates and take advantage of highs or lows in your home currency! If you keep your money safe from yourself in your home bank account - you will have more leftover upon your return home!
Banks - Money Transfer Services
- Most banks in the UK, Australia, NZ, SA and North America will allow customers with bank accounts to transfer money online to an overseas bank account.
- You will need to currently have, or sign up for, online banking with your current bank.
- You will usually need to know the address of the receiving bank, the account details of the receiving account, the account name and often the receiving bank's SWIFT code (an international bank identification system - ask your current bank for their SWIFT code).
- This is a highly effective and secure way to transfer money - but it can be pricey.
- Costs generally range between 15 GBP (Lloyds) for Standard services and up to 35 GBP (Barclays) for priority services. From an Australian bank it usually costs about 20 AUD.
- Exchange Rates are at the Bank's rate which varies daily. Currency Exchange rates for most leading banks are not easily available online
- You can use this method to send a money order online to your own home bank account or to a third party.
Pros:
- No restrictions on the countries between which you can transfer money
- Security - No need to deal with a 3rd intermediate party
- You can make online money transfers
- No need for an internet connection if you don't mind going to the Bank's branch.
- Less paperwork
Cons:
- Banks tend to be more costly than dedicated online Money Transfer Services
- For most banks you cannot easily check the currency exchange rates online
Best for: Making the occasional transfer where you do not mind paying the extra fees and exchange rate difference.
How much does it cost? Many (if not all) of these services and banks use an exchange rate that is favorable to them. If you are movin g amounts greater then 1000GBP it is important to realize this. Generally the only way you can find out a UK Bank's exchange rate for a particular currency is by going into a branch or calling them. Tranzfers openly displays their going rates on their home page. Frankly, we like that because it is easy for you to see the difference by visiting a site like Yahoo's current currency exchange rate.
BEWARE money transfer fraudster
WORKgateways words of caution: there are lots of companies that offer online money transfer services online from one country to another, usually asking for you to deposit your money with them as a first step. Because these transfers take place electronically and you are asked to deposit the money up-front, WORKgateways recommends that you only use services suggested on this page or services that fellow travelers and colleagues may have used successfully. If in doubt, go with name and reputation because your money is, literally, on the line.
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