Making International Money Transfers: Your Options

Quick answer

• Research multiple providers to compare fees and exchange rates.
• Understand the total cost: transfer fees plus the exchange rate margin.
• Consider speed versus cost when choosing a transfer method.
• Use services designed for international transfers, not traditional banks for smaller amounts.
• Double-check recipient details to avoid costly errors.
• Look for providers with transparent fee structures.

Who this is for

• Individuals sending money to family or friends abroad.
• People paying for goods or services from international vendors.
• Those managing finances across different countries.

What to check first (before you act)

Goal and timeline

Before you send money, be clear about why you are sending it and when it needs to arrive. Is this a one-time payment for a holiday booking, or a regular remittance to support family? Knowing your timeline will help you choose between faster, potentially more expensive options and slower, cheaper ones.

Current cash flow

Ensure the funds you plan to send are readily available and won’t disrupt your own essential expenses. Review your budget to confirm you can afford the transfer without overextending yourself.

Emergency fund or safety buffer

If the transfer is not for an emergency, confirm you have a separate emergency fund in place. This ensures that unexpected personal expenses don’t interfere with your international transfer plans or force you to cancel it.

Debt and interest rates

Assess if you have high-interest debt that should be prioritized over making an international transfer. Paying down expensive debt can often provide a better financial return than sending money abroad, especially if the transfer is not time-sensitive or critical.

Credit impact

While making an international money transfer typically doesn’t directly impact your credit score, ensure you are not relying on credit to fund the transfer itself. Using credit irresponsibly can negatively affect your creditworthiness.

Step-by-step: How to Make an International Money Transfer

1. Define Transfer Details:

• What to do: Determine the exact amount you need to send, the currency of the recipient, and the urgency of the transfer.
• What “good” looks like: You have a clear figure in mind for both the sending and receiving currencies, and a target delivery date.
• Common mistake: Not specifying the recipient’s currency, leading to potential double conversion fees or unfavorable rates. Avoid this by clearly stating the destination currency.

2. Research Transfer Providers:

• What to do: Compare services like dedicated money transfer companies, online platforms, and traditional banks.
• What “good” looks like: You have a shortlist of providers that offer competitive rates and fees for your specific transfer corridor (the countries involved).
• Common mistake: Automatically defaulting to your bank, which often has higher fees and less competitive exchange rates for international transfers. Explore specialized services.

3. Compare Total Costs:

• What to do: Look beyond just the transfer fee. Analyze the exchange rate offered by each provider, as this often includes a hidden margin.
• What “good” looks like: You can easily see the total amount the recipient will receive in their currency for a fixed amount you send.
• Common mistake: Focusing only on the advertised transfer fee and overlooking a poor exchange rate, which can significantly increase the overall cost. Always calculate the final amount received.

4. Check Transfer Speed:

• What to do: Understand how long each provider typically takes to complete a transfer.
• What “good” looks like: You’ve matched the transfer speed to your recipient’s needs, whether it’s same-day, a few business days, or less urgent.
• Common mistake: Paying a premium for instant transfer when the recipient doesn’t need the money that quickly, or choosing a slow method for an urgent payment. Align speed with necessity.

5. Gather Recipient Information:

• What to do: Collect all necessary details for the recipient, including their full name, bank name, account number (or IBAN/SWIFT/BIC code), and sometimes their address.
• What “good” looks like: You have accurate and complete information for every required field.
• Common mistake: Typos or incorrect bank details, which can lead to delayed transfers, returned funds, or even lost money. Double-check every character.

6. Create an Account (if needed):

• What to do: Sign up with your chosen provider. This usually involves identity verification.
• What “good” looks like: Your account is set up and verified, allowing you to proceed with the transfer.
• Common mistake: Delaying account creation, as verification can sometimes take time, potentially missing a favorable exchange rate or deadline. Start this process early.

7. Initiate the Transfer:

• What to do: Enter the transfer details, including the amount, recipient information, and your payment method (bank transfer, debit card, etc.).
• What “good” looks like: You have reviewed all details on the confirmation screen before authorizing the payment.
• Common mistake: Rushing through the final confirmation, leading to errors in the amount or recipient details. Take a moment to verify everything.

8. Fund the Transfer:

• What to do: Make the payment to the transfer provider using your chosen method.
• What “good” looks like: The funds are successfully debited from your account or card, and the provider confirms receipt.
• Common mistake: Using a payment method with high fees or unfavorable exchange rates for funding (e.g., a credit card that treats it as a cash advance). Choose the most cost-effective funding option.

9. Track the Transfer:

• What to do: Use the provider’s tracking tool or reference number to monitor the transfer’s progress.
• What “good” looks like: You can see the status of your transfer and have an estimated arrival time.
• Common mistake: Assuming the transfer is complete without tracking, and not being aware if there are delays or issues. Stay informed.

10. Confirm Receipt:

• What to do: Ask the recipient to confirm once they have received the funds.
• What “good” looks like: The recipient confirms they have received the correct amount in their account.
• Common mistake: Not following up with the recipient, leaving you unsure if the transfer was successful or if there was a problem. Close the loop.

Common Mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Using your bank without comparison	Higher fees, less competitive exchange rates, more expensive transfers.	Compare rates and fees from at least 2-3 dedicated money transfer services before using your bank.
Focusing only on transfer fees	Overpaying due to unfavorable exchange rate margins.	Always calculate the total cost by looking at the final amount the recipient receives. Compare the effective exchange rate offered.
Incorrect recipient details	Delayed transfers, returned funds, additional fees, or lost money.	Double- and triple-check all recipient information (name, account number, bank code) before submitting.
Not checking transfer speed	Money arriving too late for its intended purpose or paying for unnecessary speed.	Match the transfer speed to the recipient’s needs. Use faster services for urgent needs and slower ones for non-urgent transfers to save money.
Using a credit card for funding	Cash advance fees, higher interest charges, and potentially less favorable rates.	Fund transfers with a debit card or bank transfer if possible. Check your credit card’s terms for international money transfer fees and interest rates.
Not verifying identity promptly	Delays in setting up an account and making your first transfer.	Complete identity verification as soon as you decide on a provider to avoid last-minute rushes.
Sending small amounts via wire transfer	High fixed fees make it uneconomical for small sums.	For small amounts, use specialized money transfer services. Reserve wire transfers for large, urgent payments where speed is paramount and fees are less significant.
Assuming the best rate is always best	Overlooking hidden fees or poor customer service that can cause future problems.	Consider the provider’s overall reputation, customer support, and transparency in fees alongside the exchange rate.
Not informing the recipient	Recipient may be surprised, miss the funds, or not know who sent them.	Communicate with the recipient about the transfer, including the expected arrival time and the sender.
Ignoring regulatory requirements	Transfers may be blocked, delayed, or subject to scrutiny.	Be aware of any limits or documentation requirements for international transfers in both your country and the recipient’s.

Decision rules (simple if/then)

• If the transfer is urgent and time-sensitive, then use a fast transfer service because speed often comes at a premium, and it’s worth paying for reliability.
• If the transfer amount is small, then avoid traditional bank wire transfers because their fixed fees will likely be a high percentage of the amount sent.
• If you are sending money regularly, then look for a provider with competitive rates for recurring transfers because small savings add up over time.
• If the exchange rate offered is significantly better than the mid-market rate, then investigate further because it might indicate hidden fees or a less reputable provider.
• If your primary goal is cost savings, then prioritize providers with low fees and transparent exchange rates, even if the transfer takes a few extra days.
• If you are sending a very large sum, then compare specialist international money transfer services and potentially a bank wire, as some providers have limits or better pricing for larger amounts.
• If you are unsure about a provider’s legitimacy, then check reviews and their regulatory status with financial authorities in your region.
• If the recipient needs the money in a specific currency, then ensure the provider offers that currency directly to avoid extra conversion fees.
• If you are sending money to a country with complex banking regulations, then choose a provider with experience in that region.
• If you are funding the transfer with a credit card, then check for cash advance fees and interest rates, as these can make the transfer much more expensive.
• If you receive an unsolicited request to transfer money, then be extremely cautious, as it could be a scam.
• If you encounter issues during the transfer, then contact the provider’s customer support immediately to resolve them.

FAQ

What is the mid-market exchange rate?

The mid-market rate is the real exchange rate between two currencies, with no markups. It’s the rate banks use when trading with each other. Money transfer services typically add a margin to this rate.

Are international money transfers safe?

Reputable money transfer services are generally safe, especially those regulated by financial authorities. Always use established providers and ensure you have accurate recipient details.

How can I get the best exchange rate?

Compare rates from multiple providers, including online services and specialist platforms. Look for services that offer rates close to the mid-market rate and have transparent fee structures.

What is a SWIFT code or BIC code?

These codes identify specific banks and branches worldwide. They are crucial for international wire transfers to ensure money reaches the correct financial institution.

What is an IBAN?

An IBAN (International Bank Account Number) is a standardized international numbering system for bank accounts. It’s commonly used in Europe and other regions to facilitate international payments.

How long does an international money transfer take?

Transfer times can vary from a few minutes to several business days, depending on the provider, destination country, and payment method used.

What fees are involved in international money transfers?

Fees can include upfront transfer fees, exchange rate markups (hidden fees), and sometimes receiving bank fees. Always check the total cost.

Can I send money to anyone abroad?

Generally, yes, provided you have their correct banking details. However, some countries or services may have restrictions based on regulations or sanctions.

What this page does NOT cover (and where to go next)

• Specific tax implications of sending or receiving money abroad. Consider consulting a tax professional.
• Detailed legal requirements for specific countries. Research local regulations or consult a legal expert.
• Opening foreign bank accounts or managing investments internationally. Explore resources on international banking and cross-border investing.
• Using cryptocurrency for international transfers. Research cryptocurrency wallets and exchanges if this is of interest.