There are more foreign exchange services than ever before and they can help you send money overseas in minutes. Whether you need to send money back home or pay an employee based in another country, specialist international money transfer companies can often give you a better deal than your bank.
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An international money transfer allows you to send money to a recipient in the same country or internationally. You provide funds and your recipient’s details to a bank or an independent transfer provider, which exchanges the money into your desired currency and then sends the money to your recipient in another country.
Depending on the provider, a transfer can be done in person, over the phone, through a mobile app or online. Again, depending on the provider, you can use cash, a credit or debit card, or transfer funds from your bank account. Then, the funds will either be deposited into your recipient’s bank account or mobile wallet, or made available as cash for them to pick up at a location in their country. Delivery of the funds varies from provider to provider.
How do money transfers work?
The following steps give a good example of a typical transfer using a money transfer company.
Register online with the transfer service of your choice.
Input transaction details, including the amount you want to transfer.
Get approved by the transfer company. You may need to scan or email a copy of your ID for the first transaction.
Transfer funds through your bank using the account details from your transfer company.
Get your money. Your transfer service will deposit your funds in your destination account.
If you choose to use a bank to carry out your transfer, the process is a little different.
You will need to be able to send money online with your current bank.
You’ll 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).
It’s a good idea to check with your bank about exchange rates.
You can use this method to send an international money order online to your home bank account or to a third party.
How much will a money transfer cost?
There are two ways that a provider makes money on your transfer. The obvious one is the transaction fee. But the sneakier one is what your bank or transfer service marks up on the exchange rate.
Most providers either charge a set fee per transaction or they charge a percentage of your total transfer amount. To save on fees, keep an eye out for special deals.
Some providers offer first transfer free deals for new customers and promo codes so you can get discounts on your second and third transfers. But even with these fees, you’ll find that using a company that specialises in international money transfers is far cheaper than bank-to-bank telegraphic transfers.
Keep in mind that a lower fee doesn’t necessarily translate to the biggest savings. A lower fee might be accompanied by a poor exchange rate, negating any savings from the low fee.
The exchange rate determines how much one country’s currency is worth in another currency. Most countries’ exchange rates are flexible, which means it can change from moment to moment. Factors that influence the exchange rate include interest rates, economic stability and inflation.
Most transfer services will advertise the real exchange rate, or “mid-market rate” — the mid-point between the buy and sell prices of two currencies on the global market. But when it comes time to make your transfer, you’ll notice you almost never get this rate. The provider will mark up the exchange rate — and pocket the difference.
Using a provider that offers the most competitive exchange rate could save you hundreds on your transaction.
Tips for saving on your international transfer
There’s no one best way to transfer funds overseas. It depends on how much you’re sending, how soon you need it to be made available and the exchange rates at the time. Below are a few tips you can use when sending money overseas.
Know your transfer currency’s mid-market rate. This rate is the midpoint between worldwide supply and demand for that currency — and the rate banks and transfer services use when they trade among themselves. Use it as a baseline to compare against the rates you’re being offered. The company that’s closest is offering you the best rate.
Send more money per transfer. Many services discount the fees or waive them altogether when you send larger transfers.
Use forward contracts and limit orders if sending money regularly. A forward contract allows you to lock in a favourable exchange rate for future transfers. This means you avoid unpredictable movements in exchange rates. A limit order allows you to wait until a favourable exchange rate is found, and then lock it in for your transfer.
Send same-currency transfers. It can sometimes be cheaper to transfer euros or US dollars to your recipient, allowing them to transfer the euros or dollars into their own currency when received. Depending on the situation, your recipient could pay lower fees overall.
Alex sends money to Kenya
Alex wants to help his family in Kenya with bills and critical home improvements. He initially planned to transfer €1,000 through his local bank, but he’s decided to compare his bank to an independent service to see what his best option is.
Money transfer service
€1 = 111.44 KES
€1 = 113.30 KES
2 business days
Amount received in KES
Visiting his local bank, Alex learns that he’ll need to transfer money from his account to another bank account, which will take a few days. His bank offers a weaker exchange rate and a stiffer transaction fee than a money transfer service does. Overall, he’ll be out €1,040 for the transfer.
Working with a money transfer service, Alex discovers it offers not only a stronger exchange rate but also a lower transaction fee. It charges a mere €4 for bank-to-bank transfers, but offers quicker cash pickups for only €11 more. By going with a transfer service, Alex saves €25 in fees and his family can pick up the cash — and an additional 1,860 KES — within minutes.
Business or personal?
Consider the purpose of your transfer. Are you sending money to friends and family overseas, or are you a business looking to pay for goods and services, potentially regularly?
For business owners, time is our greatest commodity. Without time to research our options, we often end up going with our bank. But a little planning can set you up for significant savings on your transfers. For example, if you send transfers of €1,000 every week, you could save €40 each time. That’s a savings of €2,000 a year simply by choosing a competitive independent service over your bank.
Instant cash transfers
Many online money transfer providers allow you to send and receive cash almost instantly. Transferring the money into a bank account might take a few days, and bank-to-bank transfers can also take a few days to clear. If you need to send a same-day or emergency transfer, there are providers that allow your recipient to pick up cash quickly, often within an hour.
These larger payment networks allow for nearly instant transfers with cash pickup:
How do I compare international money transfer providers?
This is the rate at which your money will be converted to your target currency. Some transfer providers offer lower fees but weaker exchange rates, while others charge no fees but profit from the margin between its rate and the mid-market rate. Compare the total cost of your transfer to make sure you’re getting the best deal.
Independent transfer services offer competitive exchange rates and no fees. If you want to send and receive cash right away, compare options like WorldRemit, Ria, MoneyGram and Western Union. Bank-to-bank transfers are safe and convenient but typically not your cheapest or fastest option.
The best method for transferring money might depend on how much you want to send. If you’re making a transfer of five figures or more, you’ll want to make sure you’re getting the best exchange rate — especially since providers encourage large transfers by offering low fees. If you’re sending a small amount to friends or family, it’s wise to also consider any fees you’ll pay on top of the exchange rate.
Sending a one-time transfer differs from sending regular transfers, whether to pay for bills like an overseas mortgage payment or for goods and services. With a one-time transfer, you may put more weight on speed and flexibility in delivery, such as cash pickup. But if you’re sending recurring payments, you’ll want to set up regular transfers that can save you the most on rates and fees over the long term.
Sometimes there’s an emergency and a loved one needs funds quickly — and in cash. Thankfully there are global money transfer providers with tonnes of agent locations that allow your recipient to pick up the funds in cash, often within a matter of minutes. If you have a little more time, however, consider an independent transfer provider that can get you much lower fees and stronger exchange rates.
What currencies can I send overseas?
Germany does business with many other countries worldwide. When it comes to money transfers, you have options to convert your euros into US dollars, pounds and many other currencies. Larger networks like Western Union will have the largest number of possible currencies, whereas smaller banks and other services usually limit their supported currencies to the most popular ones.
Your best exchange options are online
The rise of online money transfer services gives you more options — and stronger rates — than ever before. These services specialise in safely moving money internationally, saving you frustration when making or receiving regular payments.
Whether you’re putting roots down in France, opening an office in Japan or spending while vacationing in Australia, compare to get the best exchange rates and lowest fees on sending money internationally.
For owners of overseas properties
Buying, selling or investing in a property abroad? Compare transfer services to make your purchase safely, whether closing on your dream home or scheduling recurring payments.
For larger international payments
Maybe you’re ready to buy that boat you’ve been eyeing. It could be time to pay off your child’s education abroad or support their destination wedding. Perhaps you’re coming into an inheritance that needs to be transferred to your German account. When transferring big money, it all comes down to the exchange rate.
How important is the exchange rate?
A solid exchange rate is crucial. When it comes to larger amounts, even two cents in your favour can save — or cost you — hundreds of euros. If you have the luxury of time, you may be able to take advantage of a limit order. A limit order allows you to set a target exchange rate with a service or broker, which monitors the markets 24/7 to ensure you don’t miss that target. Once rates meet what you’re looking for, you give the OK to complete the transfer.
My rights when it comes to money transfers
BaFin is Germany’s Federal Financial Supervisory Authority and supervises banks and financial service providers within the country. Check to see if the money transfer service you plan to use is regulated in the country it operates out of.
Before you agree to a transfer, you should also try to check the following:
The exact exchange rate you’ll receive.
Any fees and taxes collected from you in connection with the transfer.
Any fees charged by overseas agents or other entities involved in the process.
The total amount your recipient will receive.
Common questions about money transfers
The maximum you can send depends on both the transfer service you use and the type of transfer you’re making.
The minimum you can send depends on the service you use.
This could be for a few reasons — including whether the country is currently under economic sanctions (such as Iran) or your transfer provider hasn’t yet built the facilities and networks needed to send money to a particular country.
Providers generally turn a profit on your money transfer in two ways. One is by charging you a fee to complete your transaction. These transfer fees can vary widely by provider but are typically a flat fee or a percentage of your transfer. If you’re sending a large amount, ask whether you qualify for a fee-free transfer.
The other “fee” is an often hidden markup on the mid-market rate — or the rate banks and transfer services use when they trade among themselves. Nearly all providers skew exchange rates for a profit, so be sure to find one offering the smallest margin between the mid-market rate and the rate they’re offering to you.
Other fees will depend on how you’re paying for your money transfer and how you’d like your recipient to pick it up. Credit or debit card transfers are often your most expensive option, though often the fastest, while cash pickups can also increase what you’ll pay.
The quickest money transfers will arrive instantly and depend on the specific service you use and where you’re sending the money to.
For example, Western Union could have funds to your recipient almost instantly. MoneyGram, on the other hand, could send funds to China that are available in as little as an hour, but funds are only available the next business day when sent to France. Other services can take longer than quicker cash services like MoneyGram and Western Union.
Yes, a number of providers have fee-free thresholds for international money transfers.
Keep in mind that even if a service is free, you’ll likely pay through a margin applied to the exchange rate.
Today, you have many options for initiating money transfers. But if saving money is your goal, online services are a wise choice. Most banks offer the ability for account holders to initiate a transfer online simply by logging into their account. Banks, however, typically won’t be your cheapest online option.
Online money transfer specialists have been giving banks a run for their money, offering lower fees and stronger exchange rates. Still, there are other online options. With these services, you can often send funds to friends and family for free.
To initiate a wire transfer, you can visit your local bank, go to a money transfer office or use an online money transfer specialist. With any of these options, the process will differ slightly.
Generally, you’ll need to complete a wire transfer form indicating your personal banking information, your recipient’s name and banking information, and the amount you’re sending. Once your transaction is complete, you’ll typically receive a tracking number to confirm that your recipient receives your funds.
Yes, PayPal is a popular way to make international payments. Both the sender and the receiver both need an active PayPal account. Once the funds are transferred to the recipient’s PayPal account, they will then need to transfer them to their bank account to be withdrawn.
PayPal international transfer fees will vary depending on the method of payment but the fee is typically a percentage of the total transfer amount.
To send money to a PayPal account, you must sign up for a free account online.
Once signed up, click Send & Request at the top of the screen. If the account you’re sending to is in Germany, follow the prompts to enter your recipient’s email address or phone number, the amount you’re sending and where your money will be pulled from.
Transfers among PayPal accounts are free.
If you’re sending money to an international account, click Send & Request and follow the prompts to choose your recipient’s country from the drop-down menu. Indicate how much you’re sending to see how much your recipient will receive in their home country’s currency. Confirm the exchange rate you’ll receive and transfer fee you’ll pay, then follow the prompts to complete your transaction.
Yes. International money services typically use encryption systems and will generally need to be authorised. When processed through a reputable bank or company, your funds are safely tracked until in the hands of your recipient.
You’ve undoubtedly heard about someone who’s fallen prey to a money transfer scam. Scammers are becoming more sophisticated, using increasingly elaborate plans in an effort to separate you from your money. Common scams to look out for include: Advance fee scams, requiring a wire payment for a purchase or phishing.
If you suspect you might be the victim of a scam, contact the money transfer service provider in the first instance with the details, as well as BaFin, which may be able to offer support.
Adrienne Fuller is the head of publishing at Finder US. With a decade of experience creating guides in finance and education, she aims to deliver the accurate and transparent information she wishes she had when she made some of life's important financial decisions. For the past 3 years she has been the publisher of money transfers, helping readers save when they send money all over the globe. She has a BA from Colorado College and loves to hike with her two Catahoula dogs around her home in San Diego.
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