Only a few years ago, making a cheap international money transfer didn’t use to be easy. In fact, using services like Western Union or bank wire transfers can still cost you up to 10% of the money. However, times have changed and today you can use much more affordable services of online money transfer platforms. They are very simple to understand and usually the whole process takes only a few minutes.
Finding the best way to transfer money abroad is essential for migrant workers, business owners, online merchants, and travelers. And it’s important to understand that in some countries, this task is harder than in others. The USA, in particular, is a country with stringent regulations for foreign currency service providers. Therefore, it’s harder to transfer money to USA for cheap compared to the majority of other developed economies.
But hard doesn’t mean impossible. Today you can use the services of industry leaders Moneycorp, OFX, and TransferWise to make cheap and fast international transactions. Each of these companies is certified in America. And note that while the offerings of these money transfer platforms differ in some ways, the process of making a transfer through them is straightforward and similar.
1. Find a Cheap International Money Transfer Provider That Works in the USA
The first thing you should always do when trying to find the best way to transfer money abroad is to make a list of available options. Then, make a list of the features that are important for you personally in this type of financial service provider. For example, for a business this might be hedging tools and discounts for larger transfers. Armed with that list, you can start comparing the companies to pick the cheapest money transfer to USA.
The number of options to go through isn’t high for this country. Therefore, you should be able to choose fast.
Most important features to consider when researching online money transfer platforms include:
- FX (foreign currency exchange) rate margins
- Minimum transfer amount
- Supported currencies
- Deposit and withdrawal methods
Please note that when trying to transfer money to USAfor cheap, you need to look beyond the fees.You also need to consider additional benefits and services offered by the provider. They also will affect the value of the service. Therefore, you might be able to get not only a cheap international money transfer, but also added security for yourself. For example, hedging tools will minimize the risk inherent to foreign currency exchange. Considering how volatile the FX market is right now, this can be a life-saving advantage for a small business.
2. Sign Up for the Money Transfer Company That Suits You Best
Now that you’ve found what cheap international money transfer options you have available, you need to choose one or several. This kind of service doesn’t require you to pick only one provider. In fact, considering the changing nature of FX rates, it’s best to check the cost of a transfer with several companies. And you’ll have to do this on the day of the transaction. This way, you’ll be able to choose the best way to transfer money abroad in every situation.
However, to make this process more convenient, you’ll need to sign up first. This means that you’ll need to create accounts with one or several of these online money transfer platforms. In the majority of cases, these accounts are free and don’t have any obligations. Therefore, you can have as many of them as you need.
The sign-up process differs a bit depending on the company. For example, Moneycorp takes longer to approve accounts and requires more details than TransferWise. However, the process itself is rather straightforward and simple. You’ll need to follow the instructions provided on the website or through the app. Personal information usually required for making a cheap international money transfer includes:
- Bank account number
- Possibly additional documents verifying your ID
3. Transfer Money to the USA for Cheap
Now, all your hard work is done. All you need to do to actually make a transfer is to log into your account, get a quote, and send the money. You’ll need to provide the recipient’s name and account number and follow step-by-step instructions provided by the platform. The whole process will only take a few moments.
This kind of cheap international money transfer can be completed within minutes or take a few days. This will depend mostly on where you send the money to. If your destination is the US, the process shouldn’t take too long.
Note that you will make a transfer from your own bank account to the company’s account first. Only when this transfer is completed, the company will send the money to the recipient from its own account in that country.
This is the best way to transfer money abroad because this multi-step transaction doesn’t require actual crossing of borders. This is one of the main reasons why FX companies are able to keep their rates so low.
How Much Money Can You Save by Using the Best Way to Transfer Money Abroad?
The exact size of your savings with this cheap international money transfer can be hard to calculate. That’s because it depends on many factors, starting from the recipient’s bank to the mid-market exchange rate.
On average, the cost of an international bank wire transfer will range between 3% and 10% of the transfer volume. This number includes both the bank fees charged for the transaction and your losses due to unfavorable FX rates.
With an online money transfer company, the cost will be up to 3%, on average. Leading companies, like TransferWise keep their margins very low, under 1%. Therefore, the overall cost can be over ten times lower compared to what your bank offers.
However, you need to remember that no matter how good a deal you get, this kind of service will cost some money anyway. This type of transfers is not completely free, like it could have been if you used cryptocurrency. But the fact that this much cheaper method o money transfers exists is an indication that the industry is changing. The level of competition within it grows, which pushes companies to offer even cheaper rates and develop more efficient solutions. Considering how much the popularity of fintech has increased due to the latest pandemic crisis, it’s quite possible that a free method of international money transfers will exist soon.