Despite the growing popularity of transferring money to a bank account, the traditional cash pickup payment remains an essential service for many people around the world. While this form of payment isn’t exactly new, it has a broad range of uses for people of all walks of life.
If you are looking to arrange a cash pickup, you are spoiled with options. There are many money transfer services out there that can help you, but this won’t necessarily make it easier to choose the right one for your needs.
In this post, we’ll take a look at how cash pickup works, and see how it can be used to deliver money to your favourite recipient, wherever they may be.
What is a cash pickup payment?
Cash pickup is essentially the ability to send money to a person in another location, whereby they are able to pickup the payment in cash, usually from a physical branch. Cash pickup is often used to send money to family or friends who live abroad, who don’t have access to a bank account. For these people, a cash payment is the easiest way to ensure their funds reach the intended destination.
One of the reasons why cash pickup is so useful, is that you don’t necessarily have to have access to a smartphone or computer to complete a payment. Most of the services that provide this method of payment have physical branches, such as retail stores, and use a combination of authorised representatives, such as convenience stores, petrol stations and the like.
Interestingly enough, cash pickup is the oldest forms of money transfer methods. Western Union (review) was the first company to begin to offer this service in 1871, as an extension of their original business model, telegrams. Today, they remain one of the most popular services in the world, along with MoneyGram (review). However, recent times have seen many new competitors enter the market, which is great news for consumers.
Cash pickup: A list of money transfer services
Below is a list of services that can assist you with a cash pickup payment.
|wdt_ID||Service||Currencies||Speed||Ave. cost||Our score||Review|
|1||CurrencyFair||20||2-4 days||0.45 %||5 stars||Read review|
|2||XE Money Transfer||60||2-4 days||0.54 %||4 stars||Read review|
|3||WorldFirst||43||2-4 days||1.11 %||4 stars||Read review|
|4||OFX||55||3-5 days||1.20 %||4 stars||Read review|
|5||HiFX||60||2-4 days||0.45 %||4 stars||Read review|
|6||OrbitRemit||21||1-3 days||0.43 %||4 stars||Read review|
|7||Ria Money Transfer||TBC||1-3 days||3.06 %||2 stars||Read review|
|8||Currency Online||60||2-4 days||1.50 %||3 stars||Read review|
|9||WorldRemit||TBC||1-3 days||1.35 %||4 stars||Read review|
|10||TransferGo||23||1-3 days||0.84 %||3 stars||Read review|
Why is it so popular?
There are a range of reasons why cash pickup is so popular with its users, here are a few of them.
Quick. A great thing about cash pickup payments is that they’re quick. A typical transaction can be completed in a matter of minutes, and be available to the recipient not long after. If you urgently need to get money to someone, perhaps because of an emergency or other time critical situation, cash pickup is going to be the best way to do it.
Secure. The cash pickup process itself is very secure. One you make payment to the service, the funds will often be available shorty after, at any one of thousand locations across the world. To pick up the cash, photo identification must be presented to the branch, which confirms the validity of the transaction. Along the way, the payment status can be viewed to keep tabs on its progress.
Easy. Finally, many people like to use cash pickup because it is easy. If you have a computer or smartphone, you can arrange a payment with a few clicks of a button. If you don’t, no problem, you can visit a physical branch yourself and complete a transaction from there. Cash pickup is probably the most flexible payment options around, and simple enough for most people to figure out.
Examples of cash pickup scenarios
Here are a couple of example of cash pickup payments in use:
Sending money back home. Imagine that you left your home country as a young adult, and that you now live and work abroad permanently. To assist your family, you have decided to send part of your pay cheque back home. The only problem; your parents don’t have a bank account because they never needed one.
With a cash pickup payment, this isn’t an issue. You tell you mother and father, “no worries”, and arrange a cash pickup transaction with a service that you know have a physical presence back at home. Your parents then look up the address of their local branch, and after presenting photo ID, pick up the funds.
Lost wallet while travelling. You’re on a holiday and lose your wallet that contains all of your cash and credit cards. It is unlikely that your bank would be able to reissue your card immediately, and in the meantime you cannot access any money to continue with your trip. This is a big problem, as now you have no money to eat, drink, or pay for accommodation.
Instead of being helpless, you call your mother and father, and ask if they can send you some emergency funds. It would be pointless for them to wire it to your bank account (as you have no bank card), so instead you ask them to get in contact with a money transfer service and make cash available for pickup at a nearby physical branch.
What are its limitations?
Expensive. Another key downside to cash pickup services is cost – they’re not cheap! Their fee structures are relatively complicated, combining a exchange rate spread and transaction fees, meaning the overall rate you pay will be of some significance away from the mid market exchange rate. Depending on the service you choose, expect to pay between 2-4% of the overall value of the transfer for the privilege.
Limited to low values. Cash pickup payments are limited to relatively low values. The exact amount depends on the service you use, and the country in which the recipient is located, however, as a general guide, a typical payment is limited to between $5,000 and $10,000. Some services will also place an aggregate limit on transfers that can occur with a specific period of time.
Carrying cash can be dangerous. While the transaction itself is secure, often one of the biggest risks is carrying the cash once it has been picked up. Many physical branches are located in highly populated areas of cities, and unfortunately this means that there is a risk of criminals targeting recipients once they leave the safety of the branch.
Susceptible to scams. Speaking of criminals; the difficult-to-trace nature international cash transfers means this is the preferred method of stealing used by scammers. Some unsuspecting people are fleeced of their money when they are enticed to send money to someone they don’t know, or have never met in person.
If you’re not sure if cash pickup is the right method of payment for you, take a look at our article on how to compare money transfer services
How to be safe when using cash pickup
For all its convenience, there is a somewhat dark side to cash pickup services – they are often used for scams. Bad players will turn the tables on everything that makes cash pickup a great service, and use it against the very people it aims to help. When using a cash pickup service you need to be careful. Here are a few tips to keep you safe:
As a sender:
- Don’t send cash to someone you haven’t met in person
- Don’t send cash for an emergency situation you haven’t confirmed
- Don’t send cash for products or services offered by a business
- Don’t send cash in response to a telemarketing call
- Don’t send cash to pay your taxes
- Don’t send cash to a charity
In my opinion, cash pickup services aren’t well suited for commercial purposes, and rather are best reserved for personal use if it can be helped. If you do need to send money for commercial purposes, you should be suspicious of businesses who are requesting a cash payment, especially when it is difficult to determine their street address. Instead, to minimise the chances of getting tangled up in anything you shouldn’t, take a look at our dedicated guide to business money transfer.
As a recipient:
- Avoid pick up locations in unsafe areas
- Call ahead to confirm a branch location before visiting
- Carry your money discreetly
- Store the cash received in a safe place as quickly as practical
It really does make sense to do your homework before using a cash pickup service. If you eventually decide to make payment online, be sure to check out our guide on how to transfer money safely.
Common scams to look out for
There are a lot of different scams out there, however, here are a few that are commonly encountered:
Relationship scam. As internet dating becomes more popular, scammers will use distance to an advantage. By using a variety of websites, apps, and social media platforms, they will establish a virtual or even a phone relationship with their target victim, before asking for money to pay for medical bills or travel, and disappearing once the money is sent.
Internet purchase scam. Scammers will use websites, forums, or classifieds such as eBay, to advertise items for sale that don’t actually exist. They will then request that you send them cash, and promise to post the item to you once payment has been received. This sounds reasonable enough until the item never arrives.
Tax payment scam. Some scammers will call their victims out of the phone book, and impersonate a government official, requesting payment for taxes or other false penalty. They will often use threats to encourage an immediate cash payment to avoid legal proceedings or arrest. It’s important to remember that it’s highly unlikely that a government agency would call without first having mailed a formal notice.
Many money transfer services do their best to keep their customers informed of the latest trends in scams. Western Union, for example, maintains a list of common fraud types as a reference.
What to keep in mind when using cash pickup
Cash pickup services are the best and worst of money transfer. It is perfect for making occasional cash transfers to friends and family, but it can also be used for a broad range of criminal uses as well. If you are looking to make regular payments to a bank account, you might like to consider a service that offers its customers to make a recurring payment.
Here is a quick summary of the pros and cons of using cash pickup:
- Secure transactions
- Easy to use
- Limits to low values
- Carrying cash can be dangerous
- Susceptible to scams
How to arrange a cash pickup?
Now that we understand what cash pickup is, how it is used, and how to do it safely, below is a brief outline of how to arrange one.
Step 1 – Sign up. Visit your service of choice and register for an account. Depending on the service, this process can take between 30 seconds and 10 minutes. You will need to provide some general information about yourself including your name, email, phone number, and address.
Step 2 – Verify your identity. Because money transfer services are subject to financial regulation, you will need to formally verify your identity. Typically this will require providing two types of documents:
- Photo identification, such as a passport or drivers licence
- Proof of address, such as a bank or utility statement
Step 3 – Commence your first transaction. Once you are registered and verified, you can log in to your account and set up your first transfer. You will need to specify the name of the recipient as it appears on their identification. You will then decide on how you would like to facilitate the transaction; either by bank transfer, debit or credit card.
Step 4 – Complete the payment. If you opted to facilitate the transaction by bank transfer, you will need to deposit your funds into a local bank account. Once the funds are received by the service, they will then carry out the required process to deliver these funds to your recipient. If you made payment by debit or credit card you will skip this step and move straight to Step 5.
Step 5 – Locate a physical branch. While you are waiting for the transfer to be processed, you can search for a physical branch located close to your recipient. Depending on the service chosen and method of payment, the transfer times will vary. You’ll have a transfer reference number that you’ll be able to use to check the status of the order.
Step 6 – Cash is available for pickup. Once the payment has been processed the cash will be available for pickup. The recipient will need to present the the transaction reference number, along with their ID to access the funds. Transfers typically remain in the system for 90 days, although this will vary between services.
Cash pickup payments are an oldie but a goldie. They’re great for sending money to people without a bank account, or for getting money to a destination quickly and without a fuss. However, it is expensive, limited to low values, and you need to be wary of scammers. However, if you pay attention, they can certainly be very useful. Finally, if you’re still not sure if cash pickup is right for you, check out our guide on how to send money online.