Key takeaways
- You can transfer money internationally through bank transfers or online money transfer services.
- Banks often involve higher transaction fees, while online service providers are cheaper and faster.
- Some popular international money transfer platforms include Revolut, Western Union, Wise, and Skrill.
- While choosing a service provider, ensure that there are minimum hidden charges like exchange rate markup, transaction fees, or service charges.
International students like you often need to transfer money from their home country to their study destination. You might need to transfer money to pay your tuition fee or manage your living expenses. However, if you’re not familiar with the formalities of transferring money internationally, the process could become challenging.
When doing an international money transfer, the priority is to manage the cross-border transaction quickly, reliably, and in a cost-effective manner. Let’s know more about the complicated world of international money transfers so that you can send or receive money internationally, without hassles. Continue reading!
Table of Contents
- Which is better: bank transfer or online services?
- Best international money transfer services
- What are the hidden fees involved in international money transfers?
- How can you receive money from home without hassles?
- Final thoughts
- Frequently asked questions
Which is better: bank transfer or online services?
When you transfer money internationally, banks and online service providers will send the money to an overseas bank account. So, the service remains the same, but the technique used will differ.
International money transfers through banks, known commonly as wire transfers, use the SWIFT network (Society for Worldwide Interbank Financial Telecommunication) to transfer money. Although it’s safe, this method has higher associated costs. Compared to this, online money transfer services don’t use the SWIFT network and offer lower costs.
Here is a quick comparison of the cost, speed, and security of both services.
- Transfer fees: Banks charge higher transfer fees as they use the SWIFT network, which involves third parties. Additionally, banks will also charge you transaction costs and the exchange rate margin. Online transfer services don’t use the SWIFT network and hence they can charge lower fees. Apart from this, online services don’t charge transaction costs and exchange rate margins; they charge only one of the two.
- Transfer speed: SWIFT transactions involve several processes that delay the fund transfer speed. As a result, bank transfers will usually take 3 to 5 days. Using online transfer services, you can send money quicker than banks. Certain services will finish the transfer in a few seconds or minutes, while some other transfers can take a few days. However, the overall transfer speed of these service providers is always faster than banks.
- Security: When you consider security, bank transfers are considered more reliable than online service providers. Banks have been transferring money for decades and are viewed as safe transfer options. This doesn’t mean that online service providers are risky. There are many fully authorised service providers like Wise and Skrill, offering safe international money transfer options.
Also read: How can I earn money online as a student
Best international money transfer services
Here’s a list of popular international money transfer services you can use.
- Wise: A popular choice for money transfers, Wise offers real exchange rates and upfront charges. It also offers you multi-currency accounts where you can hold 50 or more foreign currencies. Further, the platform is user-friendly and provides reasonable rates.
- Skrill: The platform allows you to send money to a bank account, mobile wallet, phone number, or email address in around 180 countries. If you’re transferring to a foreign bank account, there are no transfer fees. You can transfer money instantly between Skrill accounts. It’s a fast and secure option with competitive fees.
- Revolut: It’s a financial app using which you can send money to over 100 countries. You have the option to send money free of charge to other Revolut users or non-Revolut accounts present in Europe’s SEPA zone. The transfer may be instant or may take up to 2 working days.
- Western Union: It’s one of the most established money transfer services. The service is available in more than 200 countries and provides fast transfers along with instant cash pick-ups.
What are the hidden fees involved in international money transfers?
You must understand the hidden fees in international money transfers, as these can significantly impact the final amount received. The common hidden charges include the following:
- Exchange rate markups: Certain service providers will offer an exchange rate that is different from the mid-market rate. The difference is a hidden cost that usually ranges from 2% to 5% of your transaction amount. So, check the mid-market exchange rate to ensure you receive a fair deal.
- Transfer fees: The fees charged for transactions will vary between service providers. These could be inflated, resulting in you paying a higher amount. To avoid this, select services where the transaction fee is clearly outlined.
- Service charges: There are service providers who advertise low costs but add service charges at the last minute. Research and select service providers with transparent pricing so that you don’t end up paying additional service charges.
How can you receive money from home without hassles?
You can use the below options to receive money from home.
- Bank deposits: These are secure ways to transfer money internationally. Money can be transferred directly to your bank account using services like Wise or Revolut. The exchange rates of these service providers are usually lower than bank wire transfers.
- Cash pick-ups: If you don’t have a bank account, you can use cash pick-up services like Western Union or Remitly. The money from your home will be sent to the pickup locations from where you can collect it using your ID and transaction code.
- E-wallets: An e-wallet acts as a virtual bank account. These wallets allow you to receive money instantly at lower fees. Skrill and Revolut are two popular e-wallets you can consider using.
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Final thoughts
When you transfer money internationally, you need to choose the mode of transfer carefully. A bank wire transfer is a traditional and safe method but often involves higher costs and longer transfer time. The online service providers are quicker and offer competitive rates compared to banks.
While choosing a service provider, you need to be careful about the hidden costs. There could be costs involved in exchange rate markups, transaction fees, and service charges. Review the pricing structure and exchange rate carefully to ensure you don’t end up paying more than expected.
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Frequently asked questions
How can I do an international money transfer?
You can transfer money internationally either through bank transfer or using online service providers like Wise, Revolut, or Skrill. Banks charge higher than online service providers but are considered to be safe. Online transfer platforms usually charge less than banks and are faster.
How do I avoid fees when sending money internationally?
While sending money internationally, check and avoid hidden costs like exchange rate markups and high transaction fees. Try to avoid weekend transfers since these often have higher charges.
What is the cheapest method to transfer money internationally?
Some of the best platforms to send money internationally are Wise, Revolut, and Skrill. These platforms are cheaper than bank transfers and the charges vary based on the destination and amount.
