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Using international money transfers when shopping online

If you’re planning a major online purchase, a money transfers could save you money.

It wasn’t all that long ago that online shopping seemed new, exciting and even a little dangerous. But in today’s increasingly connected world, it’s now an everyday task.

While most online shoppers in the US either turn to PayPal or rack up a bill on their credit card when paying for online purchases, you may have a more affordable option to help you shop online.

If you need to make a larger purchase you, could enjoy significant savings by paying for your shopping with an international money transfer. Let’s take a look at how international transfers work and can be used to do your bank balance a favor.

Compare international money transfers when shopping online

Use our comparison calculator to assess transfer fees, exchange rates and other details for sending funds overseas with our money transfer partners to pay for online goodies.

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Save money on your personal or business international money transfer today. Fill in the form and you’ll be contacted by a foreign exchange expert to have an obligation-free discussion about your options.

With over 17 years of foreign exchange expertise and over $100 billion transferred, OFX can help with all your currency exchange needs, including:

  • Buying property abroad
  • Emigrating
  • Regular overseas payments
  • Risk management
  • Forecasting
Min. Transfer Amount Transfer Speed Online Transfer Fee Rate Services Amount Received Description CTA Details
USD 1,000 1 day USD 0.00 18.653 Online, Phone, Bank Account to Bank Account MXN 93,267 Exclusive offer: $0 transfer fee
No-limit transfers with competitive exchange rates for 100+ currencies.
Go to site Show details
USD 1 3 - 5 days USD 75.00 18.719 Online MXN
92,190
Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks. Go to site Show details
1 day - - Online, Phone, Bank Account to Bank Account Exclusive exchange rate discounts
No-maximum limit transfers with competitive exchange rates for 100+ currencies.
Go to site Show details
USD 100 3 - 5 days USD 5.00 18.635 Online, Phone MXN 93,080 Transfer money into 20 currencies and schedule regular payments. $5 fee waived for transfers over $5,000. Go to site Show details
USD 1 Within an hour - - Online, Bank Account to Bank Account, Cash Transfer Use promo code FREE to send your first transfer at no fee to 110+ countries for bank-to-bank deposit, cash pickup or mobile top-up. Go to site Show details

Compare up to 4 providers

The drawbacks of shopping with your credit card

Perhaps the most common method for online shopping purchases is paying with a credit or debit card. Problems can arise, however, when you’re buying goods from overseas.

Weak exchange rates

If you’re making a purchase in a foreign currency, you’ll need to accept the exchange rate your bank offers when transferring your US dollars into that other currency. Unfortunately, exchange rates offered by your bank are typically far weaker than the mid-market rate. Which means you’d need to pay more US dollars to convert to purchase price you agreed to.

What is the mid-market rate?

The mid-market rate is what your money’s actually worth on the global market compared to another currency. It’s the midpoint between worldwide supply and demand for that currency — and the rate banks and transfer services use when they trade among themselves.

Use the mid-market rate as a baseline to compare against the rates provided by your bank or transfer service. With it, you’ll discover which companies offer the best rates.

High transfer fees

Your credit card provider will also charge you an international transaction fee. Among major US banks, the fees are commonly set at 3% of the total cost of the transaction, which can add up substantially for larger purchases. A few credit cards don’t charge any foreign transaction fees, so check out the features of these cards if you’re planning to pay for your online shopping with credit or debit.

The downsides of PayPal

When pay for online purchases with PayPal, it takes the prevailing mid-market rate and adds a margin of 2.5% to 4% or more, profiting the difference. Add to this margin a transfer fee that’s a percentage of your total, and PayPal is not as cheap an option as you’d think.

How international money transfers can save you money

If you’re looking for a cheaper way to pay for your online purchases, international money transfers may be a solution. They’re no longer a game for only tried-and-true players like Western Union and MoneyGram. Instead, newer companies like World First and OFX promise to undercut the competition to earn your business.

Specialist transfer companies focus on cheap, quick and secure overseas payments, with exchange rates that take a much smaller chunk of your money over those you’d get with your local bank. They also typically charge lower fees — either flat fees of just a few dollars per transaction or a percentage of your transaction amount. Some will waive their fees altogether for larger transfers, resulting in even more savings for you.

A downside of money transfers

While they offer strong exchange rates and low fees, international money transfers do have a downside: they’re often not ideal for small transactions. Specialist transfer companies tend to have high minimum transfer amounts, from $150 with OFX to $500 with Travelex. And paying a fixed transaction fee may not always be the cheapest option if you’re making a small purchase.

Unlike PayPal or credit cards, paying for your online purchases with a money transfer will not offer you buyer protection. Be sure that you can trust the seller before putting down your money with an international money transfer specialist.

Case study: Sam’s shopping spree

Sam collects rare and exotic musical instruments from all over the world. After months of searching, Sam finally found a rare Fender guitar in an online store based in Spain. He negotiated a price of €10,000 with the seller and now need to find the cheapest way to pay for his prize.

He decides to compare the cost of using his credit card with the cost of sending an international money transfer to see which offers the better deal.

Credit cardMoney transfer specialist
Exchange rate
1 USD = 0.892 EUR1 USD = 0.945 EUR
Amount Sam must pay in order to transfer £10,000$11,211$10,582
Transfer fee$336.30 (3% international transaction fee)$0
Total cost of transfer$11,547.30$10,582

Sam discovers that he can save $965 by going with an online money transfer specialist to pay for his purchase, avoiding both a weaker exchange rate and the stiff 3% international transaction fee charged by his credit card provider.

How do I compare international money transfers?

Looking for an affordable and secure way to send international money transfers? Consider these features when comparing the pros and cons of transfer providers:

  • Exchange rates. Nearly all providers skew exchange rates for a profit. Compare the rate you’re offered to the mid-market rate — the rate banks and transfer services use when they trade among themselves — and look for the smallest margin between them.
  • Transfer fees. Find out whether the provider charges 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.
  • Transfer options. If paying off a purchase in installments, does the provider allow you to set up a regular payment plan? Confirm whether any of these special transfer types come with hidden fees.
  • Range of currencies available. Will the provider offer an easy way to send money to your favorite transfer destinations?
  • Transfer speeds. Compare processing times between providers to ensure that your funds will arrive to your recipient within their specified time frame.
  • Customer service. Most companies offer customer service by Internet chat, phone, in person or by email. Make sure help will be available if you need it.
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US International Money Transfers Offers

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HiFX International Money Transfers

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WorldRemit International Money Transfers

Use promo code FREE to send your first transfer at no fee to 110+ countries for bank-to-bank deposit, cash pickup or mobile top-up.

World First Foreign Exchange

Exclusive offer: $0 transfer fee
No-limit transfers with competitive exchange rates for 100+ currencies.

TransferWise International Money Transfers

Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks.