Billions of dollars per annum are sent around the world by foreign workers sending money home to such countries as The Philippines, India, Pakistan, Vietnam, Mexico and Indonesia and large numbers of usually fairly small sums are also transferred to pay allowances, school fees, and to make small internet purchases, hence the possible methods for transferring money have also increased substantially.
Sending money overseas to family used to be exclusively the preserve of banks and a very few money transfer companies with offices in major countries. Since the advent of internet banking, sending money home or sending emergency funds to your kids has become a lot easier but there are real pitfalls you need to be aware of.
The first thing you need to consider is the security of your money, if you pick a major bank or use one of the well known money transfer companies then you can be fairly sure that at least your money will actually arrive but this can be an expensive and often slow method to send money. Fees can easily come to $40 or more at each end and the currency exchange rates they give you can be very poor indeed.
So what other choices are there?
a. Foreign exchange brokers are useful for transferring large amounts and generally fairly safe, however make sure the broker you pick is fully accredited by a financial services agency because your money moves through their accounts and can therefore be at risk. Fees and exchange rates are normally fairly reasonable but transfers can take a few days depending on the banks used and the receiving bank may also lever a charge to clear the funds.
b. Sending a credit or debit card is becoming a popular choice. It seems easy and there are plenty of ATM machines around the world to access the money, however cards can be lost or stolen in transit. Perhaps not so likely if the cards are couriered but that’s going to cost you plenty. Cards can also have substantial fees attached to their use so make sure you read the fine print and the fee structure which should be supplied by any reputable card provider. Currency exchange rates used by these companies can be prohibitive, make sure you know how much you are going to end up sending and how much it’s going to cost you first.
c. You can send a check issued by a bank or Post Office, either in local funds or in the currency you need to send if you have that facility. Using this method you will at least know what it’s going to cost you before you obtain the check but again, checks get lost in the mail and it takes time to mail them.
d. Using one of the new online money transfer organizations such as Ezybonds, Xoom or Paypal is the simplest option if you want to send the money quickly. There are many other similar companies but with this kind of organization it is imperative that you ensure their data security is good enough to prevent hacking. With these organizations you need to open an account meaning you will need to provide identification, so check that the company has either been around long enough to be well established or is backed by a substantial parent company to ensure that your private data is secure. Once again check the fees and currency rates. Be aware that sometimes while they say there are no fees, there may well be a charge of up to 4% of the money you want to send and that can be very expensive.