Innovations in technology are continuously driving us closer to a cashless world.
International money transfers are commonplace payments nowadays. One reason would be workers earning abroad and sending money to family to support them in their home country.
Another reason is the increasing need for businesses to pay freelancers and suppliers overseas. Business related payments are spurred by the dominance of services delivered across borders, such as digital freelance jobs, software development, contact centers, etc.
With the rise of on-demand services, traditional banking is no longer up to the game and have given opportunities to non-banks to participate in international payments.
Third party applications have revolutionized the way we make payments, especially when it comes to sending money to another country.
One such service provider would be Transferwise.
What is Transferwise?
Transferwise is a UK based global money transfer service that was launched in 2011. The company claims to service international money transfers at much cheaper rates than bank transfers.
Banks charge unfair fees to wire money abroad, and charge a high Foreign Exchange rate when converting currencies.
They do both of these things in order to make a significant profit from the money you need to send. But, are Transferwise so different?
Many companies that offer online transfers as a service, charge an arm and a leg to make payments.
It is not uncommon to see large global money transfer companies charging their fees as a percentage of the money you are sending.
Transferwise charge this percentage fee, as well as a flat transaction fee for certain payments.
According to their website: “eventually, the percentage fee + flat transaction fee structure will be in place for every currency we offer.
“But until then, some transfers still have a higher percentage fee or a minimum fee instead of the flat transaction fee.”
Many online transfer companies pride themselves on the fact that they offer better foreign exchange conversion rates than banks.
But, many of these companies disguise their own Foreign Exchange rates cost into their fees.
With Transferwise, there is a fee to convert between currencies – you can take a look at them here.
Here’s an example of how much it can cost you to send an international payment with Transferwise.
For this example, we’ll say we want to send $10,000 from Canada to The UK, where they use the pound (GBP).
As you can see, this transfer will cost over $45 in fees just to send!
Alternatives to Transferwise for International Money Transfers
PayPal – PayPal is another popular payment service provider that has been in use since 1998.
PayPal serves as a platform that allows individuals and businesses to make and receive payments. It also allows sellers to integrate PayPal to their website for payments and invoicing.
PayPal’s charges can be a per transaction fee or a slab based fee structure, in addition to a fixed fee.
The cumulative charges can end up being extremely high and unless you have a heavy volume of transactions.
The platform offers a strong level of security, but it usually takes a couple of days for the amounts to reflect in your account.
PayPal may not be your best option to send money overseas.
Western Union – With Western Union, the most significant advantage is their vast agent network situated across 200 countries.
These act as cash pick up points for the recipients.
However, the bank transfer option charges quite a hefty fee for its service.
The transfer duration varies from country to country, but can take up to six business days. If time is not on your side, and you opt for the faster credit/debit card option, service charges really rocket up.
Western Union are a highly reliable and secure option, but they also may not be the best option available.
Payment Rails – This platform allows you to make international payments to more than 200 countries.
Their infrastructure enables you to automate the collection and disbursement of mass payments easily. The company has also incorporated tax compliance features into its platform.
They have monthly subscription options starting from $49 to $199 per month – the $199 option includes the W8/W9 Tax Form Collection.
Payment Rails also have varying charges that depend on the payout method, the recipient’s country and mode of receiving. This transaction fee applies to all payments.
Payment Rails have an automatic compliance screening and security mechanism in place to ensure payments are safe.
But again, there may be better options out there for you to send money abroad.
What Is The Best Way To Send Money Overseas?
The best way to send money internationally is by using REMITR.
Our service is the fastest, cheapest and most convenient way both to send and receive money.
REMITR allows you to send money to over 150 countries worldwide.
With REMITR, your payments will be completed in 1 business day, and in some cases, instantly.
Using our platform offers you guaranteed savings – we charge a flat fee as low as $5!
And the good news keeps coming – it’s time to say goodbye to high Foreign Exchange rates.
As mentioned above, unfair FX rates are being charged on international payments by banks and most other providers.
With REMITR, you get access to the best live FX rates, 24/7.
For receiving payments- from anywhere in the world- there is no better way than using REMITR Collect.
Once you register for REMITR Collect, you will receive a free Global Account.
Receiving payments into this Global Account is free!
You then have the ability to withdraw funds into your own bank account at any time you wish.
Funds are transferred to your local bank account within 1 business day of submitting your online withdrawal request.
Time is money – save them both by getting in touch with REMITR today.