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Looking to send money internationally? Here’s what you need to know about ways to send money overseas, the importance of exchange rates and how to manage your costs.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Sending money overseas can be done in a variety of ways. In general, your options include:
Many Canadian banks offer global money transfer options and wire transfers to countries around the world. This includes major banks like TD, RBC and CIBC as well as digital banks like Simplii Financial and EQ Bank.
Bank transfers typically come with lower exchange rates and higher fees than companies that specialize in money transfers like Western Union and TransferWise. However, we may see this change over time as traditional banks respond to competition from newer fintech companies by developing more competitive digital money management solutions.
Online money transfer services let you conveniently manage transfers from anywhere in the world through online platforms and mobile apps. Some services like XE and Remitly offer same-day money transfers.
Acceptable payments usually include bank transfer, debit and credit. One downside is that you can’t pay for your transfer with cash, as digital money transfer services don’t operate physical branches.
Industry giants like Western Union and MoneyGram offer the advantage of giving your recipient fast access to the cash you send — sometimes within minutes. These companies offer the choice of paying online or in person at an agent location.
However, depending on the type of transfer, you may pay higher fees than if you used an online-only money transfer service that has less overhead costs to maintain. Some online-only transfer services like WorldRemit and Remitly offer cash pickup as a receiving option.
PayPal offers online transfers to 150+ countries and territories around the world through its international money transfer service, Xoom. Before Xoom became available, PayPal had a reputation for offering poor exchange rates and high fees, particularly for large transactions.
However, with the advent of Xoom, PayPal has made it much easier to send money overseas using its platform. Xoom’s exchange rates and fees are competitive with other online money transfer service providers.
Not the quickest option for sending money internationally, you can mail physical cheques or money orders around the world from your bank or Canada Post. Compared to an electronic transfer, there are added costs involved like a fee for each cheque or money order you request and the cost of postage. Your recipient may also be charged a fee by their bank when cashing in.
Although the exact process may differ between service providers, these are the steps you’ll generally have to follow to send money internationally:
Once the transaction is complete, you may receive an email or text notification that the funds have been received. Details of the transaction may be saved to your account to make future transfers quicker and easier.
When you send money internationally, fees and exchange rates play a huge role in determining your costs.
The exchange rate is the value of one currency when converted to another currency. Technically, exchange rates change every second, but banks and money transfer services may update their rates daily, hourly or even sooner.
The midmarket rate is the value of one currency in another currency. For example, if the midmarket rate for converting CAD to USD is 0.80, then CAD$1 is worth USD$0.80.
Most banks and money transfer services make a profit by taking a fee worth a small percentage of the midmarket rate. So, if the midmarket rate for converting from CAD to USD is 0.80, you might actually be offered a rate of 0.76. This means your recipient will get USD$0.76, and the bank or money transfer service will pocket the remaining 4 cents.
While losing a few cents per dollar may not sound like a lot, it can really add. A lower exchange rate means you lose more of your money to fees, and your recipient gets less. A higher exchange rate means more of your money goes to your recipient instead of fees.
Compared to banks, companies that provide money transfer services exclusively usually offer rates that are closer to the mid-market rate.
Let’s say you need to send $2,000 to family in Mexico. Here’s what you might face as far as fees and exchange rates as of October 26, 2021.
|Online money transfer||Cash transfer (in-person)||Bank transfer|
|Fee||$5||$10||$50 + intermediary bank fees|
|Exchange rate||1 CAD = 16.1995 MXN||1 CAD = 16.0286 MXN||1 CAD = 15.8740 MXN|
|Transfer speed||1-2 day||Within an hour||2-5 days|
|Amount received||MXN 32,318||MXN 31,897||MXN 30,954|
In this case, your recipient will receive more money in less time if you go with an online money transfer service instead of a bank.
Transfer fees can range from a few dollars to up to $80 or more, with some providers taking even more by charging a percentage fee instead of a flat fee.
Depending on the provider, your transaction fee could follow one of the following schemes:
Note that other fees that could apply. For example, a money transfer service could charge your recipient a fee to cash a bank cheque or pick up cash in person instead of by direct deposit.
While finding competitive fees and exchange rates can help keep your costs down, you may be able to save even more with the following tools.
There are many ways to send money internationally from banks and online transfer services to in-person cash transfers and popular apps like PayPal. Always compare fees, exchange rates and transfer options before choosing a service provider to make sure you’re getting the best deal for your needs. Learn more about how to send money overseas in our guide to international money transfers.
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