How to compare money transfer services: A guide

If you have never had to compare money transfer services before, you might be in for a bit of a shock. There are dozens of services out there offering to help. From simple transfers to corporate advisory, there is something for just about everyone.

But that doesn’t mean that it will be easy to find the right one for you. After all, what should you be looking for? And who can you trust? Don’t worry, with a little bit of guidance, you’ll soon have a better idea of what really counts.

Read on, and we’ll show you how to compare money transfer services, so you can find the right one for your needs.

Affiliate disclosure: If you sign up with a money transfer service after being referred from our website, we might earn a referral fee. Learn more.

Is the service transparent?

First, try to learn some general information about the service. Does it tell a coherent story about itself? Is its website easy to navigate? Does it describe what payment features are available? Can you view its exchange rates before signing up?

As a bare minimum, you should look for the following information:

• The full name of its legal entity; e.g. Money Transfer Service Ltd.
• Its physical operating address
• Its phone number and email address
• Its “about us” page

A service that sets a good example in this regard is CurrencyFair. It has a well-designed website that clearly displays all the information that you’d like to know, including an “about us” page with photos of its employees.

What countries and currencies are supported?

If you want to send money online on a regular basis, the service’s capabilities will be a determining factor.

Service availability

It is important to verify that you are eligible to use the service. Generally speaking, this means that the service will need to have a legal entity registered in the country of your residence. This is to ensure it remains compliant with government regulations, and also for your safety.

A good example of this is TorFX. It has a presence in the UK and Australia, so it can accept customers that reside in these jurisdictions. However, a resident of the USA could not use it, as the service is not incorporated there. Instead, a different service would need to be considered, such as Xoom.

Payment network

Not all services have the ability to transfer funds to all countries and in all currencies. Some services rely on traditional payment systems such as the SWIFT network, while other services have established their own. This can influence the number of countries it can send to, the speed of transfer, and its cost.

Traditional remittance services, such as WorldRemit, rely predominately on the SWIFT network to fulfil its transactions. While newer technology-focused services, such as OrbitRemit, have built their own payment infrastructure to better control the transfer experience of its customers.

Transfer size

Consider if a service has adequate transfer limits for your needs. Most services will set minimum and maximum transfer limits based upon the types of customers it’s trying to serve. And sometimes, there will be different limits applying to the use of its online platform specifically.

For example, WorldFirst often deals with business money transfer. It has set a minimum transfer value of £1,000 and there is no maximum transfer value. By comparison, Ria Money Transfer mostly serves the everyday consumer. It has no minimum transfer value and its maximum transfer value is £5,000.

What is the overall cost of a transfer?

Using a transfer service can save you a lot of money when compared to the banks. But this doesn’t mean you shouldn’t pay attention to what it costs.

Transaction fee

Many services will charge a transaction fee. The size of a fee may vary depending on the countries involved, the value of your transfer, and your payment method. For example, Remitly charges different fees depending on your chosen delivery method and speed of transfer.

However, unless your transfer value is low – say, under £1000 as a general rule -– try not to pay too much attention to the transaction fee just yet. The only time that it will have a significant impact is when your transfer value is relatively low.

Spread on exchange rate

Many services will buy foreign currency on the wholesale market and sell it to you at a higher rate, taking a margin in between – known as “the spread”. The spread is essentially a hidden cost that is not disclosed to you during a transaction. It is one one the key ways transfer services generate revenue for themselves.

For example, Skrill does not typically charge a transaction fee, and instead, earns its revenue through the use of a spread. There is nothing wrong with this, however, it does make it difficult to understand how much you are paying. By comparison, TransferWise does not take a spread.

Focus on the overall cost

If you focus on the spread or transaction fee in isolation, it is easy to become lost in marketing gimmicks. Instead, it is more helpful to consider the overall cost when these factors are combined. For example, a typical bank will charge up to 5% of the overall transfer value in spread and transaction fee.

To determine the overall cost of a service we need to compare a transfer with a benchmark, the mid-market rate, which in theory has no cost. Practically speaking, it is unlikely that you will ever receive the equivalent of the mid-market rate, however, your goal should be to get as close as possible.

If you can achieve a total cost of less than 1% of the overall transaction value then you are on the right track. However, it really depends on what your needs are and if you are willing to pay a little bit extra for additional features, advice, or research. To find out the mid-market rate of any currency pairing, use this calculator at xe.com.

Market comparison

Next, it’s time to compare money transfer services against one another. To help you do this, we have prepared a chart. Beside the name of each service, we have listed its average cost, speed of transfer, receiving countries, and our review score – sorted from highest to lowest.

To sort this chart by column, click its respective headings. If you are reading on mobile, you may need to scroll horizontally to view all fields.

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 significantly.

Traditional remittance services such as Western Union and MoneyGram typically offer same-day money transfers, but you will pay for the privilege. If you would like a lower-cost alternative, TransferGo and SmallWorld offer a variety of speeds at different price points.

Does a service offer the payment features you require?

Before signing up, it makes sense to know that the service has the features you need. Think about the payment types that will make your life easier, such as:

• Spot contract
• Recurring payment
• Market order
• Currency forward contract
• Foreign currency options
• Multi-currency account
• Cash pickup

The features of the service should be balanced against its pricing. While there are some that offer market-leading rates, they may not have all the bells and whistles you’re after. Other services may offer more advanced features, but at a higher cost.

If you can’t find one service to do it all, you may be better off signing up with two services. For example, you could use Xendpay to make simple transfers online, while Currencies Direct could be used for larger and more complicated transactions.

Is customer support easily accessible?

When you compare money transfer services, it’s nice to know that help isn’t far away. Ideally, the service should have customer support ready and waiting to assist.

General support

Take a look at the service’s website and check to see if its telephone number is easily accessible. If it is missing or hidden, it may be difficult to get the customer service you’re after. However, some services may only offer email or webchat. Azimo is a good example of a service like this.

Personalised service

Some services offer general call centre support, while others provide more personalised service. For example, RationalFX is not one of the cheapest services on the market, however, it does take pride in offering a bespoke customer service experience.

Is the service safe?

All the features in the world won’t do you any good if the service is not safe. There are some important security-related matters that should be checked from the outset.

Licensing and regulation

The service should be appropriately licenced and registered with relevant financial regulators in the jurisdiction of its operations. This means that the service can be held accountable if it does not conduct its activities to an appropriate standard.

For example, XE Money Transfer is licenced and regulated in the United Kingdom by the Financial Conduct Authority. But because it also conducts business in Australia and the USA, it is regulated by the Australian Securities and Investment Commission and FinCen as well.

Website security

The service should have a secure website. To check that a service is complying with secure communication standards, check that its website URL begins with “https://”. If it is properly secured, there should also be small green padlock next to the address bar.

Is the service reputable?

When you compare money transfer services, you should also consider its reputation. There are 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.

Social media

Many services use social media platforms, such as Facebook or Twitter, to communicate with their customers. Social media can be observed to see what types of conversations are being exchanged. If you’d like to gain a better understanding of what is going on, take a look at these interactions.

Mainstream media

It is worthwhile doing an online search for the service you’re considering. Occasionally, there are articles published by media outlets that can provide useful insight into the service and its and history. For example, Paysera has some great coverage in the media. However, it’s mostly in Lithuanian.

Corporate culture

If you really want to put your investigator hat on, take a look at Glassdoor to see what the employees of the service say about it. In our experience, the performance of any business is very closely tied to its culture. If you discover some unusual reviews, it could be a sign of underlying issues.

Is the service easy to use?

Now, we get into the practical details of actually using a service. After all, you’ll want to make sure that its user experience is a good one.

Online platform

Most services have an online platform for conducting transactions. The functionality of these platforms will vary depending on the service’s investment in technology. However, keep in mind that more advanced transactions may still need to be completed manually on your behalf.

Mobile apps

With more of us abandoning desktop computers, many services have developed apps for Apple and Android devices. OFX is just one example of a service that has gone to great lengths to allow many of its payment features to be available on a range of mobile devices.

How does the service work?

When you compare money transfer services, it is important to understand how the service works. This is going to be a difficult one to test for yourself, so take a look at our reviews instead. We walk you through an example transaction, so you can observe how the service functions. We also include commentary on our experience.

Conclusion

It is important to compare money transfer services, so you can sort the wheat from the chaff. Services come in different shapes and sizes, and serve a variety of purposes. However, with some careful research and a little bit of patience, we have no doubt that you’ll find the right one for you.

If you have any questions or feedback, let us know in the comments below.