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.
- 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.
wdt_ID Service Currencies Speed Ave. cost Our score Review 7
Ria Money Transfer
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.
- 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.
- 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.
wdt_ID Service Currencies Speed Ave. cost Our score Review 2
XE Money Transfer
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:
- Is the service transparent about what they do?
- What currencies does the service support?
- What is the overall cost of a transfer?
- Is the transfer speed acceptable?
- Does the service offer the required features?
- Is customer support easily accessible?
- Is the service safe?
- Is the service reputable?
- 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!
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.