You are a newly expatriate, a student who went abroad for a semester or a retiree who decided to spend some time in a warmer country? The question of making international money transfers will rise very soon. Indeed you might need to send money home on your saving accounts, ask your parents for their help or need to get your pension. But yet you do not know anything about the money transfers industry. Do not worry; this article is here to guide you.
What are money transfers?
It might seem quite obvious but there are some aspects of the topic you probably do not know, especially if you are new to this. Money transfer is simply about send money from a point A to B. Just like transportation you have several ways to arrive to your destination: use a bank, Western Union or an online money transfer operator. You can decide to pay with a credit card, make a wire or deposit cash to an agency. The way you want to receive the money can also be chosen: if you do not have an account in your ne country you can receive cash for example.
Another important aspect that you might not have in mind is exchange rate. Indeed when making international transfers you’ll be exchanging two different currencies. The exchange rate is what defines the value of one unit of a currency to a foreign one.
For example 1€ = US$ 1.04 or EUR/USD = 1.04
The main thing to have in mind is that exchange rates fluctuate (some of them quite a lot) depending on the demand on the foreign exchange rate market or on events such as the US elections or the Brexit. This means that there are better moments than others to make money transfers. Keep this in mind 😉
How to make money transfers?
Today you have 3 ways of making international money transfers: 2 of them that I do not recommend and one that is very good.
You’ll probably be tempted to use your bank as most of us do when thinking about sending money abroad. This is the worst thing you could do when it comes to money transfers. The reason is that you’ll end up paying around 8-10% fees: variable, fixed and hidden ones.
You could go for dinosaurs such as Western Union or Moneygram. They’ve been on the market for a long time and therefore might seem more legitimate than newcomers but they are just as expensive as banks. The only good thing about them is that you can receive cash if you do not have a bank account in your new country.
Or you could use online money transfer operators: many of them emerged recently and the good thing about them is that they are really cheap! Money transfers generally cost 2 to 3% of the amount sent.
There you are, ready for making your first money transfer! Just remember to check the exchange rate and use an online money transfer.