A currency forward contract is a very useful tool for transferring money internationally. Exchange rates can be volatile and change with the ebbs and flows of the market. If you are buying or selling assets in a foreign currency, such as a real estate or piece of equipment, a sudden change in the rate can undermine the value of any underlying transaction to which it attaches.

This form currency risk can certainly invoke anxiety, and if the market moves the wrong way, potentially cost you a lot of money in the process. In this post, we’ll take a look at forward exchange contracts and explore how they can be used to hedge against future movements in the foreign exchange market.

What is a currency forward contract?

A currency forward contract is a foreign exchange tool that can be used to hedge against movements in between two currencies. It is an agreement between two parties to complete a foreign exchange transaction at a future date, with an exchange rate defined today. For example, an agreement to sell another party £50,000 for €50,875 in six months time, at the rate of GBP/EUR 1.1175.

Entering into a currency forward contract does not require an upfront payment of any sort, but it is a contractual arrangement between the two parties. This means that you must proceed with the agreed transaction, no matter what occurs after the agreement has been made. Even if the exchange rate has since moved in your favour, and that you’d be better off not proceeding with the forward exchange contract, you’ll still need to honour the original terms.

This is not all bad news, though. The primary reason for entering into a forward exchange contract is to limit the downside risk associated with the movements in the exchange rate. Exchange rates change every day, and sometimes they can change quite a lot. By choosing to lock down the rate today for payment at a future time, you remove the unknown risks associated with future movements in the market.

A simple forward exchange contract example

Let’s say that you are from the United Kingdom and you have just agreed to buy a house in Italy. The purchase price may have been agreed today, but the settlement of the property – the actual transfer of funds from the buyer to the seller – may not occur for another three months. If the exchange rate was to change over this time, you could end up paying much more for the property than you originally thought.

To hedge against this, you can purchase a currency forward contract. This contract would specify that you intend to exchange Pounds for Euros in three months time at an exchange rate specified today. The benefit of doing this is that if the Pound depreciates against the Euro throughout this time, you will have successfully hedged your risk – saving you money for your effort.

Now, of course, there is an opportunity cost when using a forward contract. The cost of using a currency forward contract is that you will forego any benefits of the currency appreciating in your favour. But keep in mind, that predicting the future value of currencies is not easy, and unless you have a crystal ball, I wouldn’t recommend trying. So a forward exchange contract will protect you against unfavourable movements, but you cannot benefit from favourable movements.

Here is a quick summary of the pros and cons of using a currency forward contract:

Where can you buy a forward exchange contract?

Banks and other large financial institutions are the traditional providers of foreign exchange services, including forward exchange contracts. However, these banks, despite their size and the strength of relationships with their clients, are often expensive. This means that they may not always provide rates that get close to the mid-market rate.

A better alternative to using a bank is to consider an international payment specialist. These companies are essentially dedicated foreign exchange brokers who can assist with providing advice in regards to not only spot payments and future contracts, but also an assortment of options, market orders, and multi-currency accounts.

Here is a list of services that can assist you with a currency forward contract:

How is a forward contract priced?

The price of a currency forward contract is calculated using a couple of factors, including the current spot price of a particular currency pairing, as well as the effective interest rate in each country. The calculation itself is quite complicated, so we won’t go into it in any details here, however, the important take away is that a forward exchange contract rate will generally be slightly lower than the current available spot rate in any currency pairing.

For example, let’s just say that the current GBP/AUD spot price is 1.8306; meaning that 1 British Pound is worth 1.8306 Australian Dollars. In this instance, it would not be unusual for the GBP/AUD forward rate to be quoted as 1.8206. The effect of this is that if you wanted to enter into a forward exchange contract with a maturity date in, say, three months time, the rate available to you would be slightly less overall – 1.8206, rather than the current spot rate of 1.8306.

Using currency forward contracts in business

Future contracts can be especially useful for businesses conducting activities internationally. If assets or stock needs to be acquired in a foreign denominated currency, a currency forward contract will enable you to adequately budget for this transaction ahead of time.

Let’s consider a clothing manufacturer in Australia who sources wool for their outdoor products in New Zealand. They are provided with an invoice for NZ$ 100,000 from their wool supplier that is due to be settled in 60 days time. The AUD/NZD exchange rate is currently 1.0911, which means that the cost of acquiring NZ$ 100,000 today is AU$ 91,649. Let’s assume that we decide to be safe and buy a forward contract at AUD/NZD 1.0811 that matures in 60 days.

The total cost of acquiring NZ$ 100,000 is now AU$ 92,498; slightly more than the current spot rate, but we don’t need to transfer the funds for 60 days. This is the maturity date of the forward and also the due date of the supplier’s invoice. Between now and the due date, the exchange rate will almost certainly fluctuate, but the important thing for us is that we have locked down an exchange rate, so we know exactly how much we’re going to pay.

Let’s quickly examine the effects of this forward contract on the possible scenarios. Consider that in 60 days the Australian Dollar had depreciated against the New Zealand Dollar to 1.0511. If we had not decided to purchase a forward contract and instead made a spot contract at the time payment was due, the cost of funding the NZ$ 100,000 transaction would be AU$ 95,138. Therefore, by using a forward contract we have saved ourselves AU$ 2,640; a good result overall!

Of course, if the Australian Dollar moved the other way and appreciated against the New Zealand Dollar, we would have been better off to wait. But unless you had some magic ability to predict this, you would never know this ahead of time. Either way, in this example, the currency forward contract has completed its purpose; it has protected our wool manufacturer’s margins, so he can price the cost of the input into his process with confidence.

Combining forwards with options

Now, we have described that by using a forward contract, you give up any benefits resulting from a favourable movement in your currency. If you have more technical requirements, however, this is not always the case. Some sophisticated clients, with a little bit of professional help, may combine a forward contract with an option; allowing them to benefit whichever direction a currency moves.

An option is an advanced tool that provides you with the right, but not the obligation, to purchase a specified amount of foreign exchange in the future. It often requires the payment of a small premium to acquire the option and can be used in conjunction with forwards or on their own. If you’d like to read more about using options, take a look at our post on the subject.

Conclusion

Currency forward contracts are a useful tool for managing foreign exchange risk. By agreeing to purchase currency for a future date at today’s prices, you can effectively hedge against undesirable movements in the exchange rate. This can save you money and the potential of a headache when conducting large transfers for real estate or other property. While banks are often able to assist you with this function, international payment specialist can often secure more competitive exchange rates.

What is the mid-market exchange rate and why does it matter? The fact that you’ve arrived here suggests to me that it’s important that you know. If you are making cross-border payments, the mid-market rate is an essential reference point to ensure that you are using a competitively priced money transfer service.

Despite their looks, exchange rates don’t have to be complicated. If you can get your head around the mid-market rate, and understand how the prices offered by money transfer services relate to this benchmark, you will be placed in good stead. It really is the first step in determining that you’re getting a good deal.

Now, let’s take a look at the mid-market rate definition.

What is the mid-market rate?

The mid-market rate is essentially an exchange rate in its simplest form. Every day in the world’s foreign exchange markets, traders buy and sell currencies with each other on behalf of large banks and other financial institutions. Through this, they establish the supply and demand of each currency, which is represented by two prices; the price to buy a particular currency, and the price to sell it.

These two prices are not the same. The buy price will always be slightly lower than the sell price. This is to encourage traders to enter the market and begin trading – to provide “liquidity” to the market and make a small profit in the process. The mid-market rate is the middle point of these two prices and is the clearest representation of the true exchange rate at any one time.

The mid-market rate is also known by other names, such as the “interbank rate” and “real exchange rate”. It effectively represents the price at which banks and other financial institutions (including money transfer services) can acquire currency at. The mid-market rate moves up and down as it is affected by market forces for a particular currency, and by understanding what it is and what it represents is useful when acquiring currency yourself.

Why does it matter?

Knowing that the mid-market rate is the true exchange rate of a particular currency pairing at any one time, we can set it as a benchmark for comparing money transfer services against. If we assume that a service can acquire a currency at or close to the mid-market rate, we can reverse engineer their offer to see how far away it is from the mid-market rate; and thereby understand the total “cost” of us using their service.

Practically speaking, it is unlikely that a service will ever offer the equivalent of the mid-market rate, as most will add a profit margin or “spread” to a currency before selling it to you. However, by comparing the cost of each service relative to the mid-market rate, we are able to make a fair apples with apples comparison, without getting drawn into marketing and pricing games.

Speaking of pricing games, many services will charge a fee and/or a spread to differentiate themselves from their competitors. Because this can confuse matters somewhat, you should try not to focus on either in isolation. Instead, try to consider the overall cost of each service when compared to our benchmark; the mid-market rate. To find out the mid-market rate of any currency pairing, visit XE or Yahoo Finance.

An example

To understand how we can use the mid-market rate to find out the effective cost of a service, let’s go through an example together. Say that I’d like to send £1,000 from the United Kingdom to Australia and that I’d like to compare the money transfer services available.

Here, the mid-market rate of 1.7398 results in a direct exchange of $1,739. As this is only a theoretical rate, there is no “cost” as such. Of the services available to us, Service 1 is the most competitive of the bunch. It offers the mid-market rate but charges a slightly higher transfer fee than Service 2. We receive $1,729 in Australia, therefore $10 has been lost in charges – which translates into an overall cost of 0.57%. A pretty good result, all things considered.

If you’d like to know more about what to look for, read our guide on how to compare money transfer services.

What is a fair cost for money transfer?

So what is a fair cost for using a money transfer service? In my experience, a cost of less than 1% of the overall transaction value is considered competitive. Some market leaders, such as TransferWise (review), are trying to get this down even further, to around 0.5% of the overall transfer value. Over time, this should have an effect of pushing down average prices across the market, as services continue to compete for your business.

It is important to note, however, that the overall cost of money transfer will vary between currency corridors. For some currency pairings, such as between the United Kingdom and Australia, there is significant competition amongst services, leading to a lower cost on average. However, if you are transferring money between two lesser used corridors, you may find that the cost is generally higher. To find out more, the World Bank regularly publishes average remittance costs for popular currency pairings.

Conclusion

Before you make any international payment, take a minute to find out the mid-market exchange rate, and compare this to the prices offered by money transfer services. The mid-market rate shows you what the true exchange rate is at any one time, and will help you understand what the overall cost of using a service is. This will allow you to compare the options available in an orderly and meaningful way.

As I mentioned earlier, many money transfer services employ tricky practices to hide the true cost of using their service. From a customer’s perspective, I think that transparency goes a long way to establish and maintain trust. Everyone wants to know they are getting a fair deal, and by knowing about the mid-market rate, you’ll be in a much better position to do so.

With advances in technology, geographic location is no longer a barrier to trade. And while access to international markets brings great opportunity, it also presents a number of challenges. Business money transfer is one of the areas that you will need to address eventually, and there are certainly a lot of services out there willing to help. So how can you find the right one for you?

A little bit of research will help you navigate the chaos. As will a touch of guidance from someone who understands it. If you go it alone, you may be missing an opportunity to refine your business practices and make your budget go further. That’s where we step in; to help you identify what you need, and find a service that will help you get the best result.

In this post, we’ll take a look at business money transfer, and see what’s important when undertaking commercial cross-border payments. If you intend on making a transaction for personal purposes, you might be better off reading our guide on how to send money online.

Understanding your requirements

Before you select a service for business money transfer, it is helpful to take a minute to think about what you actually want to accomplish. You’ve probably figured out by now that using your bank can be expensive, and that money transfer services offer a cheaper alternative. But not all services are the same, so it will help to refine your criteria a little first.

You most likely have a strong relationship with your bank. Banks are an essential service, and they offer many financial products to help you establish your business and keep it growing. However, you may not be surprised to know that they do not always have your interests at heart. Business money transfer is a big source of revenue for banks, and they have to make their profit from someone. In case you’re wondering, it’s from you!

Here are a few questions that will help you frame the problem at hand:

• How much do you need to transfer?
• How often will you be making payments?
• What time frame you need the funds to be delivered?
• Is it important that you transfer at the lowest possible cost?
• Do you need advice from a foreign exchange expert?
• Are you prepared to pay a little more for a personalised experience?
• Do you require to access to advanced tools such as forwards, options and market orders?

These questions are not too complicated, however, they will help you structure your thinking so you can identify the features that matter. For example, making a large, one-off payment for purchased equipment is very different from making regular payments to international contractors. A money transfer service that is fit for one purpose, is not necessarily optimised for another.

Once you’ve considered these questions, you’ll be in a much better position to dive into the various solutions out there. By taking a birds-eye view of the business money transfer market we can explore the common themes shared across services. This will serve you well in making a final decision.

What types of services can be used for business money transfer?

Generally speaking, the services that allow you to engage in business money transfer can be placed into three broad categories; peer to peer services, international payment specialists, and total payment solutions.

1. Peer to peer services

Peer to peer services are those that have been created to solve a very specific problem, often by utilising the latest technology. Instead of entering the foreign exchange market, where possible, these services aim to use their customer’s own funds to satisfy the requirements of other customers. They do not intend to be all things to all people, and that is why they can be very effective.

There are a couple of key features that separate a peer to peer service from the rest of the pack. First, they are designed for a limited purpose. For the most part, they aim to reduce transfer costs across a limited selection of currency corridors. They also use technology to their advantage, developing user-friendly online platforms to simplify the customer on-boarding process.

Generally speaking, a peer to peer service can complete the following transactions:

Spot contracts. A spot contract is a single transaction at the currently available exchange rate. It is the most basic form of payment there is. It involves a transfer of funds from one country to another, involving the exchange of currency. The payment can be made to a bank account owned yourself or a third party, depending on the circumstances.

Regular payments. A regular payment is a transaction that can be scheduled on a recurring basis. This can be suitable when you need to make the same transaction over and over again. For example, to satisfy mortgage repayments or an employment contract. Some services allow you to manage this process online, while others can arrange this after speaking with customer service.

Peer to peer services are predominately online only, which is ideal if you are comfortable with using technology in a self-directed way. They pay special attention to ensure that their product is clean and functional, and that there is plenty of phone support available. This business model allows them to perform transfers at the lowest possible cost, which often makes them market leaders in this area.

Of course, there are a few downsides. They are often limited in respect to what countries they can accept customers from, and what countries they can deliver funds to. Because these services achieve most of their efficiencies from establishing their own payment infrastructure, this leads them to focus only on popular corridors, at least in their formative years. Also, their transfer options are generally quite basic, so little advanced functionality is available.

Best for:

• The most competitive rates on the market
• Transacting along major currency corridors
• Completing transfers of almost any value
• Users who are comfortable with technology

Our favourite: TransferWise (review). The market leader in peer to peer payments, TransferWise is an innovative service led by an energetic founding duo, including one of the first employees of Skype. The service facilitates transactions at the mid-market rate, and they charge a low transparent fee. It has received a lot of praise from its customers and is supported financially by many well-known investors.

A good alternative: CurrencyFair (review). Headquartered in Ireland, CurrencyFair is a well thought out payment platform focusing on major currency corridors. They employ a technology-focused workforce who are attempting to make the transfer process as efficient as possible. Its cost structure is in line with the other peer to peer market leaders, and they are constantly building additional functionality for the benefit of their users.

2. International payment specialists

International payment specialists are effectively foreign exchange brokers who aim to provide a broad suite of money transfer products. They can advise on a range of advanced tools, such as forward contracts, options and market orders. Their services are perfect for commercial operations and those conducting large or complex transfers.

In most cases, an international payment specialist employs foreign exchange dealers to provide advice, as well as conducting trades on your behalf. In recent times, most of these services have also developed online platforms, so you can conduct simpler trades without having to speak with a dealer directly.

Generally speaking, in addition to spot contracts and regular payments, an international payment specialist can also complete the following transactions:

Forward contracts. A forward exchange contract allows you to lock in the current exchange rate for a payment which you intend to make at a later date. It is an advanced tool used to hedge against future movements in the market that may be to your detriment.

Options. An option is an advanced tool that provides you with the right, but not the obligation, to purchase a specified amount of foreign exchange in the future. It often requires the payment of a small premium to acquire the option and is useful when there may be a need for foreign currency in the future.

Market orders. A market order allows you to set a preferred rate that you might like to buy or sell currencies at, in the future. It is essentially an alert that will notify you when a currency pairing reaches a specified rate. You then have the ability to enter into a transaction at that rate, or some services can even do this automatically on your behalf.

The greatest benefit of using an international payment specialist is probably being able to speak with a professional dealer. If you prefer, they can hold your hand through the process and ensure that you are aware of all your options before you commit. Many services use an existing payment infrastructure, such as SWIFT, which increases the number of destinations that you can transfer your funds to.

However, with extra personalisation and attention comes an additional cost. When compared with peer to peer services, you’ll find that international payment specialists are slightly more expensive. This is partly due to the advanced products they offer, and also due to their use of the SWIFT payment network.

Best for:

• Medium to large transfer values
• Those who would like tailored advice
• Making payments to a broad selection of countries
• Advanced tools and risk management strategies

Our favourite: HiFX (review). A service with a lot of experience in foreign exchange. HiFX provides their customers with a personalised experience and can facilitate transfers of any amount. They make payments into over 170 countries around the world, and funds are transferred at competitive rates. Their online platform is robust, and advanced tools can be accessed by speaking with their dealer desk.

A good alternative: Currencies Direct (review). This London based service offers a broad range of foreign exchange products. While its website is rather limited in functionality, the service does employ well-qualified dealers who are more than happy to advise you on your requirements and transact with the markets on your behalf.

3. Total payment solutions

The final type of service for business money transfer that you should be aware, is what I’ll call a “total payment solution”. A total payment solution offers most of the features offered by an international payment specialist, with a few additional bells and whistles. They have gone to extra effort to include as many tools as possible, for businesses that are conducting cross-border transactions.

While these two types of services do overlap to a degree, I’ve done my best to separate them out. The main difference is that they have usually established corporate entities in a more than one country, as not have complete reliance on existing payment infrastructure, such as SWIFT. They can also hold your funds on trust, which makes them part foreign exchange broker, part bank, without going to all the compliance effort of actually becoming a bank.

Generally speaking, in addition to the payment types offered by an international payment specialist, a total payment solution may have one or both of the following capabilities:

Multi-currency accounts. An ability to establish virtual bank accounts for you in foreign currency denominations. This is most useful for entrepreneurs and businesses who accept payments from various parts of the world. A multi-currency account is a useful alternative to having a fully fledged foreign bank account in another country.

Bulk payments. If you would like to make mass supplier payments or refund a group of customers, a bulk payment solution is your answer. Many services allow up to 500 recipients to be paid by uploading a CSV file and confirming the entire transfer with one instruction.

A total payment solution is a great option for those businesses who manage overseas operations, whether it be accepting revenue from other countries, or managing payments to vendors and suppliers. These are very useful features to have in a product, and as the internet continues to mature, I think we’ll see more services begin to offer similar capabilities.

Best for:

• All the benefits of an international payment specialist
• Sending and receiving payments in multiple countries
• Making payments to a large volume of recipients
• Streamlining complex requirements into a simple solution

Our favourite: OFX (review). As a publicly listed company, OFX is one of the market-leading money transfer services in the world. They aim to provide truly global business money transfer solutions. While not the cheapest service available, the breadth of services offered by OFX is second to none. A thorough solution for small and medium businesses conducting trade internationally.

A good alternative: WorldFirst (review). A reliable service for business money transfer. Competitive rates, advance foreign exchange tools, and a broad selection of international offices, allow the company to provide a consistent experience to its customers. WorldFirst offers a high-quality online platform which facilitates transfers, as well as provides access to market research and commentary.

Comparing services to select the right one for you

By referring to the categories listed above, you should now have at least an idea of the services that can help you with business money transfer. It’s important to recognise, however, that each service within a category can vary greatly.

Here are nine basic questions you should ask yourself before signing up:

1. Is the service transparent about what they do?
2. What currencies does the service support?
3. What is the overall cost of a transfer?
4. Is the transfer speed acceptable?
5. Does the service offer the required features?
6. Is customer support easily accessible?
7. Is the service safe?
8. Is the service reputable?
9. Is the service easy to use?

Before getting too excited and jumping straight in, you should try to compare a couple of services against each other. That way, you will reduce the chances of being disappointed later on. If you’d like to know more about what to look for, check our guide on how to compare money transfer services.

Signing up with your chosen service

Once you’ve chosen your preferred service for business money transfer, it’s time to sign up. Each service has a slightly different registration process, but for the most part, they have similar requirements. First, you need to visit their website and sign up using an email and password. Shortly thereafter, you’ll need to provide the service with your contact information, such as address, phone number, and often some indication of the foreign exchange capabilities that you would like.

Most services will require that you provide an assortment of documents to verify your identity, your business’s registration, and your eligibility to use the service. This is in line with the standard Know Your Customer (KYC) procedures that financial institutions are required to comply with. Nevertheless, whichever service you choose, you should be up and running within a day or two.

Making your first transaction

Following registration, making your first transfer should be quite simple. If you are comfortable with transacting through an online platform, simply log in to their website and follow the instructions presented on the dashboard. If you are transferring a larger amount or have complex requirements, it may be best to contact their foreign exchange desk to have a dealer conduct the transaction on your behalf.

After your transaction has been initiated, most services will keep you updated via email as the payment makes its way to your recipient. The status of each transaction should also be able to be viewed on the dashboard. Eventually, you will be notified that your funds have been received by the service and will be delivered shortly. It usually takes a day or two from this point to see the funds reflected in your recipient’s bank account.

Conclusion

In this post, we’ve gone through the process of identifying your requirements when searching for business money transfer solution. We have identified that foreign exchange services for commercial organisations can be split into three broad categories; peer to peer services, international payment specialists and total payment solutions. Each type of service is structured slightly different, in terms of the features that it offers and its cost.

By referring to these categories, you can more easily pinpoint the types of services that will be helpful in achieving what you need. We have also provided you with the criteria to compare each service against one another. This will help you narrow your search to a service or two, whereby you can commence the sign-up process and complete your first transaction. By following these steps, you are more likely to be happy with your overall experience.

Let me guess. You’d like to send money online quickly and cheaply, but you don’t know where to start? Don’t worry, we’ve all been there. In the beginning, there is a lot to take in. New words and concepts, modern technology, and no shortage of money transfer services throwing themselves at you, offering to help. The problem is, of course, how do you know which is best for you?

A little bit of research will help you navigate the chaos. And a touch of guidance from someone who has done it before, won’t hurt either. If you go it alone, there’s always a chance you might miss something important. That’s where we step in; to help you identify what you need, and find a service that can get the job done.

In this post, we’ll take a look at what you should consider when you want to send money online as a private individual. If you intend on making a commercial transaction, you might be better off reading our guide to business money transfer.

Understanding your requirements

Before you select a service to send money online with, it is helpful to take a minute to think about what you actually want to accomplish. You’ve probably figured out by now that using your bank can be expensive, and that money transfer services offer a cheaper alternative. But not all services are the same, so it will help to refine your criteria a little first.

Here are a few questions that will help you frame the problem at hand:

• How much do you need to transfer?
• How often will you be making payments?
• In what time frame do you need the funds to be delivered?
• How do you want to funds to be received – into a bank account or something else?
• Is it important that you transfer at the lowest possible cost?
• Do you need advice from a foreign exchange expert?
• Are you prepared to pay more for a personalised experience?

These questions are not too complicated, however, they will help you structure your thinking so you can identify the features that matter. For example, sending a large one-off transfer is very different from making small remittances on a regular basis. A money transfer service that is fit for one purpose, is not necessarily optimised for another.

Once you’ve considered these questions, you’ll be in a much better position to dive into the various solutions out there. By taking a birds-eye view of the market we can explore the common themes shared across services. This will prepare you well for making a decision.

What types of services can help you send money online

Generally speaking, the services that allow you to send money online can be placed into three broad categories; remittance services, peer to peer services, and international payment specialists.

1. Remittance services

A remittance service is probably what first comes to mind when you want to send money online. The old guard, consisting of services such as Western Union and MoneyGram, was how money was sent around the world prior to the digital age. These businesses have been built through establishing a large network of retail agents, where money can be sent and received from.

As digital payments have become more common, traditional remittance services have begun to lose their foothold. However, they remain very important to immigrants from Africa, Asia and Latin America, who leave their homelands to work abroad. As a result, new remittance services have come to market over the past couple of years, offering flexible solutions to a young generation of foreign workers.

Remittance services can be exceptionally fast, with many providing instant delivery. Most are part of a large retail network, with some networks being larger than others. Western Union, for example, has over 500,000 locations around the world. These services are mainly suitable for low transfer values and allow you to fund transactions by a variety of means, such as debit or credit card.

For all their benefits, however, there are limitations. They can be quite expensive, as it takes a lot of resources to grow a network and pay commissions to retailers. Also, as many older services have modified their technologies over time, their systems have become inefficient when compared to their modern competitors. The often results in a cumbersome experience from a usability standpoint.

Best for:

• Amounts less than £5,000
• Sending money to a large selection of countries
• Cash pickup from a retail locations
• Fast transfers (instantly delivery in many circumstances)

Our favourite: WorldRemit (review). Fast and flexible transfers to over 140 countries around the world. Established by a former consultant to the United Nations, the service is suitable for payments of up to £35,000. The company’s online platform is simple, easy to use, and allows delivery of funds by a variety of methods. Its fee structures are much more competitive than the traditional players in this space.

A good alternative: TransferGo (review). Catering to the residents of the United Kingdom and Europe, TransferGo provides a simple online platform for sending funds to the rest of the world. The service has a quick registration process and has a helpful customer service team ready to assist. TransferGo focuses on usability and efficiency, rather than overwhelming you with complex functionality.

2. Peer to peer services

Peer to peer services are those that have been created to solve a very specific problem, often by utilising the latest technology. Instead of entering the foreign exchange market, where possible, these services aim to use their customer’s own funds to satisfy the requirements of other customers. They do not intend to be all things to all people, and that is why they can be very effective.

There are a couple of key features that separate a peer to peer service from the rest of the pack. First, they are designed for a limited purpose. For the most part, they aim to reduce transfer costs across a limited selection of currency corridors. They also use technology to their advantage, developing user-friendly online platforms to simplify the customer on-boarding process.

These services are predominately online only, which is ideal if you are comfortable with using technology in a self-directed way. They pay special attention to ensure that their product is clean and functional, and that there is plenty of phone support available. This business model allows them to perform transfers at the lowest possible cost, which often makes them market leaders in this area.

Of course, there are a few downsides. They are often limited in respect to what countries they can accept customers from, and what countries they can deliver funds to. Because these services achieve most of their efficiencies from establishing their own payment infrastructure, this leads them to focus only on popular corridors, at least in their formative years. Also, their transfer options are generally quite basic, so little advanced functionality is available.

Best for:

• The most competitive rates on the market
• Transacting along major currency corridors
• Completing transfers of almost any value
• Users who are comfortable with technology

Our favourite: TransferWise (review). The market leader in peer to peer payments, TransferWise is an innovative service led by an energetic founding duo, including one of the first employees of Skype. The service facilitates transactions at the mid-market rate, and they charge a low transparent fee. It has received a lot of praise from its customers and is supported financially by many well-known investors.

A good alternative: CurrencyFair (review). Headquartered in Ireland, CurrencyFair is an expat-centric payment platform focusing on major currency corridors. They employ a technology-focused workforce who are attempting to make the payment process as efficient as possible. Its cost structure is in line with the other peer to peer market leaders, and they are constantly building additional functionality for the benefit of their users.

3. International payment specialists

International payment specialists are effectively foreign exchange brokers who aim to provide a broad suite of money transfer products. They can advise on a range of advanced tools, such as forward contracts, options and market orders. Their services are perfect for high-net-worth individuals and those conducting large or complex transfers.

In most cases, an international payment specialist employs foreign exchange dealers to provide advice, as well as conducting trades on your behalf. In recent times, most of these services have also developed an online platform, so their customers can conduct simpler trades without having to speak with a dealer directly.

The greatest benefit of using an international payment specialist is probably being able to speak with a professional dealer. If you prefer, they can hold your hand through the process and ensure that you are aware of all your options before you commit. Many services use an existing payment infrastructure, such as SWIFT, which increases the number of destinations that you can transfer your funds to.

However, with extra personalisation and attention comes an additional cost. When compared with peer to peer services, you’ll find that international payment specialists are slightly more expensive. This is partly due to the advanced products they offer, and also due to their use of the SWIFT payment network.

Best for:

• Medium to large transfer values
• Those who would like tailored advice
• Making payments to a broad selection of countries
• Advanced tools and risk management strategies

Our favourite: HiFX (review). A service with a lot of experience in foreign exchange. HiFX provides their customers with a personalised experience and can facilitate transfers of any amount. They make payments into over 170 countries around the world and funds are transferred at competitive rates. Their online platform is robust, and advanced tools can be accessed by speaking with their dealer desk.

A good alternative: WorldFirst (review). Reliable service to send money online with. Competitive rates, advance foreign exchange tools, and a broad selection of international offices, allow the company to provide a consistent experience to its customers. WorldFirst offers a high-quality online platform which facilitates transfers, as well as provides access to market research and commentary.

Comparing services to select the right one for you

By referring to the categories listed above, you should now have at least an idea of the services that can help you send money online. It’s important to recognise, however, that each service within a category can vary greatly.

Here are nine basic questions you should ask yourself before signing up:

1. Is the service transparent about what they do?
2. What currencies does the service support?
3. What is the overall cost of a transfer?
4. Is the transfer speed acceptable?
5. Does the service offer the required features?
6. Is customer support easily accessible?
7. Is the service safe?
8. Is the service reputable?
9. Is the service easy to use?

Before getting too excited and jumping straight in, you should try to compare a couple of services against each other. That way, you will reduce the chances of disappointed later on. If you’d like to know more about what to look for, check our guide on how to compare money transfer services.

Signing up with your preferred service

Once you’ve chosen the service you’d like to send money online with, it’s time to sign up. Each service has slightly different registration process, but for the most part, they have similar requirements. First, you need to visit their website and sign up using an email and password. Shortly thereafter, you’ll need to provide the service with your contact information, such as address, phone number, and often some indication of the transfer that you’d like to complete.

Some remittance services will allow you to get started after providing a minimum amount of information. While most peer to peer services and international payment specialists will require that you provide an assortment of documents to verify your identity and your eligibility to use the service. Whichever service you choose, you should be up and running within a day or two.

Making your first transaction

Following registration, making your first transfer should be quite simple. If you are comfortable with transacting through an online platform, simply log in to their website and follow the instructions presented on the dashboard. If you are transferring a larger amount or have complex requirements, some services will encourage you to contact their foreign exchange desk to have a dealer conduct the transaction on your behalf.

After your transaction has been initiated, most services will keep you updated via email as the payment makes its way to your recipient. The status of each transaction should also be able to be viewed on the dashboard. Eventually, you will be notified that your funds have been received by the service and will be delivered shortly. It usually takes a day or two from this point to see the funds reflected in your recipient’s bank account.

Congratulations, job done!

Conclusion

In this post, we’ve gone through the process of identifying your requirements when you want to send money online. We have identified that money transfer services for private individuals can be split into three broad categories; remittance services, peer to peer services, and international payment specialists. Each type of service is structured slightly different, in terms of the features that it offers, and its cost.

By referring to these categories, you can more easily pinpoint the types of services that will be helpful in achieving what you need. We have also provided you with the criteria to compare each service against one another. This will help you narrow your search to a service or two, whereby you can commence the sign-up process and complete your first transfer. By following these steps, you are more likely to be happy with the overall experience.

If you’ve never had to compare money transfer services before, you’re in for a surprise. There are literally dozens of companies out there competing for your business. From simple, one-off transfers to sophisticated corporate advisory, there is a service for just about everyone. But that doesn’t mean that it will be easy to find the right one for you.

Luckily, that’s exactly what we’re going to address in this post. How do you compare money transfer services and separate the wheat from the chaff? The world wide web is a great resource for researching the available options, but with a little bit of guidance, there is much better chance that you’ll be happy with the end result.

Here are nine questions that you might want to consider when you compare money transfer services:

1. Is the service transparent about what they do?

A useful place to start is to try and make a rough judgement on the trustworthiness of a service. This may seem obvious, but it’s not a straightforward task if you don’t know what to look for. The first thing I ask myself is, does the service appear to be transparent about who they are and what they do? Is their website easy to navigate? Do they clearly articulate what products they offer and at what price? Are you able to preview their exchange rates before signing up?

I think we would all prefer to deal with a service run by people, rather than some faceless corporation. Well, is that the feeling that their website portrays? Do they try to make you more comfortable about using their service, or does it feel as if important information is being left out? If something is missing at the outset, there is a fair chance that you may experience further issues down the line.

As a bare minimum, there are a few details that I like to see to assure myself that the service is being run professionally and in good faith:

• The complete name of the legal entity. For example, Money Transfer Service Ltd. / Inc. / LLC, etc.
• Their physical operating address
• A phone number and email for contacting customer service
• An “about us” page that provides some general information about the company, its history and people. Ideally, there should also be a short profile on the service’s leadership team, so you know who exactly is behind the brand

I don’t consider these things difficult to do, and I wouldn’t recommend dealing with any company who isn’t willing to give so much. Think about it, if a person walked up to you on the street and asked you to part with your hard-earned money, without telling you who they are, what they do, and without providing sufficient contact details, how would you react? Walk away, I hope. All I suggest here is to maintain the same standards.

A company who sets a good example in this regard is CurrencyFair (review). They have a well-designed website that clearly displays all of their important information. They have an “about us” page which includes a photo and short bio of each staff member. It’s a service that knows what it’s doing and wants you to know it. It screams transparency and makes you feel more comfortable just by reading about it.

2. What currencies does the service support?

When you’re trying to move funds from one country to another, the capabilities of a money transfer service play an important role. Because the requirements of every person are slightly different, you’ll need to check to see that a particular service can facilitate what you need to get done. A little bit of time spent researching in advance can save you a headache in the future.

Service availability. Before you can begin using a service, you first need to verify that people in your country are eligible to use the service. Generally speaking, for a service to be able to accept funds from a particular country it must have an entity incorporated and licenced to transfer money in that jurisdiction. For example, if you live in the United Kingdom, you will need to use a company that has the appropriate licences to operate across the UK and/or European Union.

A good example of this is TorFX (review). They have a presence in the UK and Australia, so are suitable for transfers from the UK, European Union, and Australia, to the rest of the world. However, a resident of the United States could not use TorFX, as TorFX is not incorporated there. Instead, they may have to use a service such as Xoom (review), who has the required state licences to operate in the US.

Currency selection. Not all services have the ability to transact all currencies. The currencies in which they can receive will be largely based on the location of the service itself. For example, a service based in the UK should be able at the very least be able to receive payments in Pounds and Euro. The countries and currencies that it can deliver to will vary depending on the structure of its payment network.

Traditional money transfer services like Azimo (review) typically use an older form of payment network such as SWIFT. SWIFT is the largest network of banks in the world, and basically allows any service that is connected to make payments to anywhere in the world. It is quick but can be slightly expensive. Newer technology-focused services such as OrbitRemit (review) have built their own payment infrastructure, which has many cost benefits, but their deliverable currencies are often greatly reduced.

Transfer size. Consider whether your choice in service has adequate limits for sending the funds that you require. Many services that conduct transactions online will implement a minimum and maximum amount for each transfer. For example, WorldFirst (review) focuses on larger transfer amounts and sets their minimum transfer value at £1,000, but does not set a maximum value. Ria Money Transfer (review), by comparison, focuses on low-value remittances and has a maximum transfer value of £4,800.

Payment options. Each service will allow various methods of paying for your transfer. Most money transfer services will require that you fund your transaction with a bank transfer into their local account, as this is the most effective method of sending large amounts. For smaller transfers, some services may allow payment by debit or credit card, which can be more convenient and also reduce the time it takes to process a transaction.

Delivery options. Depending on the value and purpose of your transfer, you may have a preference of how the funds are actually delivered to your recipient. Most transfer services that deal with medium to large transfer values will usually only deliver funds to another bank account. However, many low-value remittance services such as WorldRemit (review), can offer a variety of flexible delivery methods such as:

• Cash pick-up
• Door to door delivery
• Mobile money
• Airtime top-up

3. What is the overall cost of a transfer?

By using a money transfer service instead of your bank, you can save a lot of money when making cross-border payments. But this doesn’t mean you shouldn’t pay attention to the cost of each service. Not all money transfer services offer the same prices. In fact, most will mix and match their pricing to be harder to directly compare against one another.

Before you start to compare money transfer services, we first need to set a benchmark – something to compare each service against. The best benchmark available is what’s called the interbank mid-market rate. The mid-market rate is essentially the exchange rate of the wholesale market, where most money transfer services acquire currencies before on selling them to you.

The costs of using a money transfer service usually comprise of one of the following, or a combination of both:

Transaction fee. A fee on each transaction conducted with the service, which is usually clearly disclosed. The fee may vary in price depending on the recipient’s country and currency, the value of the transfer, and method of delivery. For example, remittance services such as Remitly (review) often change a larger fee for having funds delivered to a cash pick-up location, compared with the same funds being delivered to a bank account.

Spread on exchange rate. A money transfer service may offer you an exchange rate that is less competitive than the rate at which they buy funds at the wholesale market. The difference between the two prices – the price offered to you, and the price at which fund are acquired at by the service, represent the “spread”. The spread is the service’s profit on the transaction and is an expense ultimately incurred by you.

So which types of expenses should you keep your eye on? Both. In my opinion, you should try not to focus on either in isolation. Instead, try to compare money transfer services based on the overall cost of each service when compared to our benchmark; the mid-market rate. To find out the mid-market rate of any currency pairing, use this mid-market tool over at xe.com.

Practically speaking, it is unlikely that you will ever receive the equivalent exchange rate of the mid-market, as most services will add a profit margin to a currency before selling it to you. However, it is useful to know the difference between the mid-market rate and the rate offered to you. That way, you can make a fair apples with apples comparison, without getting drawn into marketing and pricing games.

Let’s go through an example together. Say that I’d like to transfer £1,000 from the United Kingdom to Australia, and I’d like to compare the options available.

Here, the mid-market rate of 1.7398 results in a direct exchange of $1,739. As this is only a theoretical rate, there is no “cost” as such. Of the services available to us, Service 1 is the most competitive of the bunch. It offers the mid-market rate but charges a slightly higher transfer fee than Service 2. We receive $1,729 in Australia, therefore $10 has been lost in charges – which translates into an overall cost of 0.57%. A pretty good result, all things considered.

So what is a fair cost for using a money transfer service? In my experience, a cost of less than 1% of the overall transaction value is considered competitive. Some market leaders such as TransferWise (review) are trying to get this down even further, to around 0.5% of the overall transfer value. Over time, this should have an affect of pushing down average prices across the market, as services continue to compete for your business.

All in all, unless your transfer value is low – say, under £1000 as a general rule – don’t pay too much attention to the transaction fee. That is really the only time that it will have an impact on the overall cost of the transaction. Instead, it is much more effective to look at both costs combined. Check out our reviews to help guide you when you want to compare money transfer rates.

4. Is the transfer speed acceptable?

The time required for each service to complete your transfer will vary, and most provide an indication of this on their website. If you need a fast exchange, you may need to forego a better rate. On the other hand, if you are prepared to wait a few days you can reduce your costs by a percent or two. Many services allow payment by debit or credit card for low values, which can speed up the process for urgent transfers.

Traditional remittance services such as Western Union (review) and MoneyGram (review) typically offer same day money transfers, but you certainly pay for the privilege. If you would like a lower cost alternative to these stalwarts, there are a handful of newcomers such as TransferGo (review) and SmallWorld (review) who also deliver payments to cash pick-up locations around the world.

5. Does the service offer the required features?

Not all companies offer the same features. Yes, pricing is important, but if the service can’t do what you need it to, you’ll have to go back to the drawing board. Before you go through the process of signing up with a service, first make sure it has the features you need.

Spot contract. A spot contract is a single transaction at the current available exchange rate. It is the most basic form of payment there is. Most services allow you to complete these through their online platform. For larger values, you might find it helpful for a foreign exchange dealer to assist you with the process.

Regular payments. A regular payment is a transaction that can be scheduled on a recurring basis. This can be suitable when you need to make the same transaction over and over again. For example, to satisfy mortgage repayments or paying school tuition. Some services allow you to manage this process online, while others can arrange this after speaking with customer service.

Forward contracts. A forward exchange contract allows you to lock in the current exchange rate for a payment which you intend to make at a later date. It is an advanced tool used to hedge against future movements in the market that may be to your detriment.

Options. An option is an advanced tool that provides you with the right, but not the obligation, to purchase a specified amount of foreign exchange in the future. It often requires the payment of a small premium to acquire the option and is useful when there may be a need for foreign currency in the future.

Market orders. A market order allows you to set a preferred rate that you might like to buy or sell currencies at in the future. It is essentially an alert that will notify you when a currency pairing reaches a specified rate. You then have the ability to enter into a transaction at that rate, or some services can even do this automatically on your behalf.

Multi-currency accounts. Some services can establish a virtual account for you in foreign currency denominations. This is most useful for entrepreneurs and businesses who accept payments from various parts of the world. A multi-currency account is a useful alternative to having a foreign bank account.

Whatever your needs, the features of a service should be balanced against its pricing. While there are services out there that provide market-leading exchange rates, they may not have all the bells and whistles that you’d like. Other services will offer advanced features and personalised customer service, but these benefits will result a slightly higher cost.

Instead of focusing on finding a service with the best price or the best features, try and find a service that will provide you with the best value. Or, if your needs vary between two extremes, you may require an account with more than one service to achieve your desired workflow. For example, a Xendpay (review) account could be used for simple online-only transfers, while HiFX (review) could be used to complete more complex transactions.

6. Is customer support easily accessible?

Just in case you get stuck when using the online platform of a currency service, it is nice to know that help isn’t far away. Most services are pretty conscious of the fact, that for many of us, transferring money isn’t a common occurrence. So a service that is worthwhile using, will have a customer service team ready and waiting to answer questions when they arise.

General support. Take a look at their website and see if a telephone number can be easily accessed. If it is deliberately hidden a few pages away or missing altogether, it may be a sign that this service isn’t right for you. In addition to a phone number, its always nice to know that there are other contact alternatives, such as email or in-browser chat. A good company will emphasise their commitment to customer service by making the user’s experience as seamless as possible.

Personalised service. Some services offer generalised call centre support, while others provide a more personalised service. Currencies Direct (review) and RationalFX (review) aren’t necessarily the cheapest services on the market, however, they do take pride in offering a tailored customer experience. The customers of these services, as well as other full-service providers, will often be allocated private dealer to assist and advise on any foreign exchange requirements.

7. Is the service safe?

All the features in the world won’t do you any good if a money transfer service is not safe to use. There are no hard and fast rules to know exactly what your experience will be before getting started. However, there are some important security related boxes that should be checked from the outset.

Licencing and regulation. All reputable services should be licenced to engage in money transfer activities, and be registered with the relevant financial regulators in the countries in which they operate. For example, XE Money Transfer (review) is licenced and regulated in the UK by the Financial Conduct Authority (FCA). But because it also operates in Australia, it also has a Australian Financial Services Licence (AFSL) and is regulated by the Australian Securities and Investments Commission (ASIC).

This stuff is pretty important. Being appropriately licenced and regulated means that a service has agreed to run their company to an predetermined government standard. It’s kind of like a drivers licence, but for financial services. You wouldn’t want to use an unlicenced money transfer service any more than you would want be a passenger in a car driven by an unlicenced person.

Website security. Whichever service you choose to business with should have a secure website. To check that a service is complying with secure communication standards, check that their website URL begins with “https://”. If it is properly secured, there should also be small green padlock next to the address bar. If it doesn’t comply, it’s probably best not to provide the website with any of your personal information.

8. Is the service reputable?

When you compare money transfer services, it makes sense to do a little bit of research on their reputation. The internet be an incredible source of information, but it can also easily become overwhelming. There are, however, a few simple checks you can do to gauge the experiences of past customers.

Trustpilot. Take a look at a review aggregator website such as Trustpilot, to see what past customers have said about the service. Customers will often leave their feedback on what they think, and many services will actually respond to the comments raised on these forums. Some services may try to refer you to their Feefo profile as well, but I personally don’t rely on these reviews; as the they can be too easily influenced by the service itself.

Social media. Many services use social media platforms, such as Facebook or Twitter, to communicate with their customers. Their social media account can be observed to see what types of conversations are being exchanged. If you’d like to gain a better understanding of a service’s attitude towards its customers, take a look at the interactions on these websites. But, like we explained in our guide to safely transfer money online, it’s not a very good idea to converse on these platforms yourself, as it can expose just a bit too much personal information.

Corporate culture. If you really want to put your investigator hat on, take a look at Glassdoor, to see what a service’s employees say about the business. In my experience, the performance of any business is very closely tied to its corporate culture. If you discover any unusual signs of animosity among the rank and file, it may be an indication of that there are deeper underlying issues that could effect the performance of the service.

9. Is the service easy to use?

Now, we get into the practical details of actually using a service. What is the user experience like? Is it easy to sign up? What do you have to do to verify your identity? After all, if you’ve gone to all this effort to refine your search to a couple of services, you’ll want to make sure that the user experience is a good one.

Online platform. Most services have at least a basic online web platform for conducting transactions to varying degrees. CurrencyOnline (review) was one of the original pioneers of this technology, which has now been adopted by the majority of the market. The registration and identity verification process will slightly differ between services, but you can usually be up and running within a day or two. If English isn’t your first language, you may want to check that you preferred language is supported their website.

Mobile apps. With more and more of us abandoning desktop computers for mobile devices, many services have developed apps for the Apple and Android ecosystems. While some services have attempted to bring the full online experience to the smaller screens, others provide limited features when compared to its desktop counterpart. OFX (review) is just one example of a service that has gone to great lengths to ensure that you are able to use its full suite of products, no matter what interface you choose.

Conclusion

With a bit of luck, this post has helped you to compare money transfer services. There are many services out there, so it certainly helps if you have an idea of what your looking for before you get started. While it would be great if one service could be all things to all people, it is generally not the case. Instead, try to find something that that is going to cater to your needs, and focus on the value it will provide you, rather than relying on any one metric.

Ask yourself some basic questions. Does the service offer the currencies you require? Will the funds reach your recipient in a reasonable time frame? How does the overall cost compare with the mid-market rate? Do you need access to advanced tools or advice? What do previous customers say? If you can tick a few of these boxes before you commit, you are more likely to have a pleasant experience with your choice.

Good luck!

If you are slightly nervous before using a money transfer service for the first time, I can hardly blame you. It takes a lot of saving and investing to build up a nest egg. And to hand it all over to a third party for a short period of time, no matter how trusted, is not an easy thing.

Luckily, there are a few basic principles you can follow to ensure tat you transfer money safely online. Some are related directly to money transfer while others are a matter of developing healthy internet habits. So whatever your age and experience level, I’m sure you’ll be able to take something useful away from this post.

Now, let’s get started with our tips for how to transfer money safely online:

1. Do your homework

Not all money transfer services are the same. Before you commit to using any service, you should do some research on the quality of their product. Some services are only equipped to handle small transfers, while others are more suitable for larger and more complex transactions. The fees and exchange rates offered by each service can vary considerably, so this should also be taken into account.

In addition to your own research, you should take a look at our reviews of the most popular money transfer services on the market. We have also published a guide on what to look for when selecting the right one for your needs. While this information is certainly useful, you should check that a service has the appropriate licences to operate in your country of residence.

2. Keep your software up to date

Whether you’re using a mobile phone or computer, keeping your operating software up to date is one of the simplest things you can do to ensure that you transfer money safely. A device with the most recent version of its software installed is much more difficult to exploit than one using a version that is even just a few months old.

The easiest way to accomplish this is to turn on automatic updates. If that can’t be done, Apple users should regularly check the app store for updates to the programs they have installed. Windows and Android users should look to do the same, in addition to installing a trusted antivirus package for protection from malware and other malicious threats.

3. Use a password manager

If you’re anything like me, you have dozens of user accounts online. Everything from webmail to Facebook requires that you have a username and password. Unless you are perfectly meticulous about creating strong and unique passwords, there is a very good chance that your passwords are either too weak to be secure or have been duplicated across accounts.

Not to fear, a password manager can help solve those worries for you and keep you more organised than ever imagined. Used correctly, a password manager can generate an uncrackable password for each account and store it for your in your own encrypted vault. Two of the best-known services are LastPass and 1Password. Both have entry-level products that are free to use, so you really have no excuse.

4. Turn on two-factor authentication

Two-factor authentication adds an additional layer of security when logging in and transacting with a money transfer service. It usually requires you to enter a separate security code delivered by text message or a dedicated authentication app. While not all money transfer services offer the ability to link a phone number for two-factor authentication, it should be used when possible.

The benefit to using two-factor authentication is that even if your password is compromised, no one can get into your account without the second-factor data. It is essentially the last line of defence when protecting your accounts from unauthorised access. If you’re interested in reading more, Wired has published an in-depth article on the topic.

5. Beware of hoax emails

There are criminals out there who deliberately craft emails to look like they’ve come from the money transfer services you already trust. Anti-spam protection can only do so much to determine the validity of an email landing in your inbox. At the end of the day, it is your responsibility to ascertain whether an email is genuine and how you should respond, if at all.

If you can, try to ignore unsolicited emails. Also be wary of attachments, links, and forms in emails that come from people you don’t know, or which seem “phishy”. Misspellings and unusual grammar can often be a giveaway. But if in doubt, it is probably safer to assume that an email is untrustworthy and to contact your favourite service directly.

Here are some hard and fast rules that won’t let you down:

• Don’t open attachments from people you don’t know
• If you don’t know who sent the email, consider deleting it
• Stop and think before clicking on any links
• Scan email attachments with security software before opening them
• Legitimate services will not ask you to confirm personal details or passwords via email, so do not reply to emails requesting this sort of information
• Beware of emails that don’t address you by name

6. Avoid using unsecured public Wi-Fi

At some time or another, we’ve all joined an unsecured public Wi-Fi network. You know, the ones that you find at hotels, airports and even the local cafe? Now that we have acknowledged that fact, let’s make a promise to never do it again. Unsavoury characters will often monitor the traffic of unsecured connections and attempt to intercept any personal information that is communicated over the network.

It may tough to resist, but you should try not to use an unsecured network unless absolutely necessary. And if you have to, always ask for its exact name to avoid connecting with an evil twin. Whichever the case, unless you are certain about a network’s security, it’s not worth transmitting sensitive information. If you’d like to know more, Wired has come through with the goods again, publishing tips for safe public WiFi use.

7. Be careful with social media

The use of social media platforms such as Facebook and Twitter have become increasingly popular over the last few years. They are not only great tools for keeping in touch with friends and family but also to communicate with your favourite money transfer service. But for all this convenience, you should be very careful with the information you disclose in these public forums.

Many people choose to interact with customer service representatives using their social media account. Unfortunately, this means that in many cases a conversation can be viewed by just about anyone. This is not a very secure method of communication and can expose too much of your personal information. Instead, you should aim to deal with a service directly via phone or email.

8. Don’t provide sensitive data to insecure websites

Over the past couple of years, many services have taken an extra step to ensure the security of their website’s data. To check whether you’re connected to a secure website is very simple. All you need to do is take a look at your web browser’s address bar and notice if the address starts with HTTPS. If everything is fine, you should also find a green padlock icon next to the address.

The important thing to remember here is to never enter any sensitive information on a website that hasn’t enabled HTTPS security. This includes things like your personal contact information, credit card or bank details. By now, most money transfer services should have made the move to a secure website, but it’s always a good idea to check. If they haven’t, it might be time to find a new service.

9. Protect your personal documents

Our last tip for online security relates to documents, stored online as well as offline. Your personal documents, such as drivers licences, passports and financial statements should be secured at home, at work, and when you travel. Also, sensitive files on mobile phones and computers should be protected with passwords and where possible, with the encryption tools built into your operating system.

You should be very careful about what you throw in the trash. Financial statements and other important documents should be shredded before being discarded, to keep prying eyes away. This also goes when recycling or re-purposing your electronic devices. The data contained on computers and hard drives should be thoroughly erased, so there is no trace of your personal information left behind.

Conclusion

I hope that you’ve found some use for our tips on how to transfer money safely. While this post does not address absolutely everything that should be considered, it does offer a good start. By simply attending the points outlined above, you will already be much more secure than the average internet user. With so much at stake, I think it’s worth the effort.

If you’d like to read more about online security strategy, I recommend checking out The Wired Guide to Digital Security and The Informed Guide to Cyber Safety.