Billions of dollars are transferred out of the US to other parts of the world every year. But how many of us are actually happy with the service we’re receiving?
A finder.com study suggests that just 4% of people who transfer money internationally are happy with the value of their money transfer provider.
Based on the World Bank’s data on remittances from 2010 to 2015, finder.com estimates that $139.13 billion was transferred out of American last year and $145.56 billion is forecast to be transferred to other countries in 2017.
Feeling ripped off? 80% of Americans do, yet 25% do nothing about it
A survey of 2,005 American adults commissioned by finder.com and conducted by global research provider pureprofile in November 2016 found that 80% of people who transfer money overseas feel ripped off. Yet 25% of these people say they do nothing about it and always go back to the same provider.
Millennials — those ages 18 to 34 — admitted they feel the most ripped off when transferring money overseas (81%), closely followed by baby boomers (80%) and Gen X (79%).
Despite more women (78%) feeling ripped off when transferring money overseas when compared with men (65%), women are more likely to do nothing about it and continue using the same provider.
Point of comparison: Save your money
Our survey revealed that 30% of people sometimes compare providers before transferring cash. Americans could save significantly by comparing money transfer providers every time they transfer money out of the country.
Some providers charge no transfer fee, while others charge a flat $5 to $10 fee per transfer. For instance, transferring $5,000 to Mexico — the country to which Americans transfer the most money — could mean the difference of hundreds of pesos, depending on the provider.
Let’s take a closer look
American immigrants transferred more than $134.96 billion to other countries in 2015, making up 23% of the world’s international money transfers ($580.59 billion) — and subsequently the highest amount of money transferred out of America in one year.
Source: finder.com’s analysis of World Bank Bilateral Remittance Matrices data
*Values are forecasts based on an average 4% year-on-year growth rate from 2010 to 2015.
The total amount of money transferred out of America to other countries has increased by 19% ($25.11 billion) since 2010, from $109.84 billion in 2010 to $134.96 billion in 2015.
Where in the world?
The top five countries that Americans send money to are Mexico, China, India, the Philippines and Vietnam.
What you can do about this
When sending money overseas, the two most important elements that influence how much you’ll pay are the exchange rate and transfer fees. Other factors to consider are a provider’s pickup and transfer methods — online, over the phone, at a branch or through a mobile app. It’s also helpful to know your transfer options, like whether you can set up recurring payments or make forward contracts to lock in favorable exchange rates now and transfer later.
You’ll want to factor transfer speeds and limits into your decision, as processing times can take anywhere from a few seconds to several business days. Learning more about the provider’s customer service is also helpful to determine whether you can access help easily, if you need it.
Sending money abroad is much cheaper today thanks to strong competition among independent transfer providers and banks. By comparing time-tested providers with newer digital upstarts, you’re bound to find a safe, affordable way to get funds to friends, family and businesses overseas. For more tips and overview of how to send money overseas, this guide on money transfers could help users be happier with their providers.