International Money Transfer

When your travelling, the need to send money across borders can be an extremely frustrating not to mention expensive experience. To make this task a little easier we have attempted to offer you a little information on the different methods for international money transfer, how they work, what you need, and who you can contact.

There are a number of options for money tranfer including the bank draft, international money order, wire, telegraphic transfer, cash collection at agencies overseas, e-gold, sending an ATM card/debit card overseas, and other options.

Cash Collection Agents

Cash collection over the counter is a very quick and easy means to transfer money overseas. However it is often much more expensive than most other methods.

The basic premisis is that a sender of money visits an agent of a money transfer service, where he or she pays to transfer money electronically to someone in another country. (Some providers provide online or phone access for the sending of the funds.) The sender supplies details of the recipient’s name, address, etc., and security information such as a secret question. The agent then processes the transfer, which usually only takes a few minutes. Then the recipient visits their local agent of the same money transfer service, presents ID and security information, and collects the transfer in cash over the counter, in the local currency, or sometimes in another currency where available.

Usually the sender does not need to have a bank account or use the internet. However, in some cases the sender needs to pay online for the money transfer. The recipient does not need to have a bank account or use the internet.

Fees vary, but are usually quite high, with fees often calculated in steps or on sliding scales.

Providers: Chequepoint Envia Online MoneyGram RapidMoney Uniteller Western Union Xoom Zoha Inc.

Drafts, Wires & International Money Orders

The sender may need to have a bank account or credit union account in order to send drafts or wires, but not international money orders. If the sender does not have a bank account or similar account, and a service provider issues a wire or draft at his / her request, the charges are sometimes higher than for senders who have such an account. The recipient usually needs to have a bank or credit union account.

Drafts and International Money Orders: Drafts and international money orders are good, low cost options if, the transfer is not urgent, if the recipient has a bank account, and if a clear record of the sending of the transfer is required. International money orders are often cheaper than drafts. If your bank / service provider offers the option, it is advisable that the draft or international money order be written in the same currency as that of the recipient’s bank account, otherwise the recipient may be charged bank fees for the handling of the draft or international money order, and its exchange into his / her local currency. Also, if a different currency is used there will be a delay of sometimes 20 days or more in receiving the funds. For the sake of security, the sender should keep a receipt and details of the draft or international money order’s number, date of issue, etc.

Drafts and international money orders are like cheques (checks) that are payable to a named recipient. Unlike personal or business cheques, they are issued on behalf of a sender, by banks and some specialist money transfer service providers and their agents, which include some credit unions and some post offices. A draft is in effect a bank cheque, or cashier’s cheque. The sender usually pays for a draft or an international money order with cash or EFT. A draft or international money order is a paper document which is usually posted or couriered to a recipient, who usually signs it before lodging it with their bank. A draft or international money order must be deposited into the recipient’s bank account, usually.

Senders and recipients should check that a draft or international money order from a particular bank or other service provider, in a proposed currency, is readily acceptable at the recipient’s bank.

Service Providers and Agents: Banks, some post offices and some credit unions: Phone or enquire directly at your local branches, or visit their web sites. Others: Direct FX Moneybookers Payingfast Remit2India Travelex Western Union XEtrade Zoha Inc

Wires: A wire is a good option if the transfer is somewhat urgent, and if a clear record of the sending of the transfer is required. The sender must provide the transfer service provider with the name of the recipient, the recipient’s account number, the recipient’s bank’s Swift address, or BIC (Bank Identifier Code), or EuorGiro address, and other required recipient account details. For the sake of security, the sender should keep a receipt and details of the wire’s number, date of issue, etc. Senders and recipients should also check that a wire from a particular bank or other service provider in a proposed currency is readily acceptable for deposit into the recipient’s bank account, or postal service savings account, or able to be cashed over the counter.

A wire (also known as a ‘telegraphic transfer’, ‘TT’, ‘EuroGiro’, or a ‘Swift’) is similar to a normal EFT to a recipient’s bank account. Some banks will send wires in cases where the sender and / or the recipient do not hold an account with them; in such cases the recipient usually picks up the cash in person, at an overseas branch of the same bank at which the wire was sent. The sender pays a bank, post office, or specialist international money transfers service provider or their agent, to send a wire to the recipient on his or her behalf. The sender usually pays for the wire with cash or via EFT. Usually a fee per wire of about US$15, often more and sometimes less, irrespective of the amount being transferred. Extra fees may be charged if the wire has to go through an intermediary bank to get to the recipient’s bank. A wire is usually more expensive than a draft. Recipients’ banks usually charge a fee for receiving a wire. Those fees vary and may be several US$ or more. Extra fees may be charged if the wire has to go through an intermediary bank to get to the recipient’s bank.

Service Providers and Agents: Banks, some post offices and some credit unions: Phone or enquire directly at your local branches, or visit their web sites Others: Chequepoint Direct FX Easy Exchange Moneybookers Online FX Tranzfers Travelex XEtrade Zoha Inc

Online Wallets and E-Gold

A person can open a free account, with a non-bank organisation, which can be used to send money online, or send another commodity online, such as gold, cheaply and virtually instantly to someone else who also has an account with the same non-bank organisation. This is achieved by an online transfer from an account held by a sender to an account held by a recipient. Alternatively, a sender can use such an account to transfer money or gold to a service provider that also has an account with the same non-bank organisation, and that service provider will then send money or a debit card to a recipient. It is also sometimes possible for a person with an account with a specialist non-bank organisation to pay that organisation to send money to a recipient.

These accounts are often called online wallets, and like money in a real wallet, the money or other commodity in such an account can be used to buy all sorts of goods or services, as well as being used to send money online to someone in another country. Also, these accounts can sometimes be used for selling goods or services, and for investment purposes.

Online Wallet Providers: MoneyBookers: MoneyBookers is a multi-lingual, multi-currency, online service that offers free accounts to senders and recipients around the world. Senders can deposit money (upload funds) into their accounts at MoneyBookers by wire (international bank transfer), or online with a debit card or a credit card, and then use that money to pay MoneyBookers to send a cheque in US$, British pounds, or Euros, or a wire (international bank transfer) to a recipient. Alternatively, if a recipient also has an account with MoneyBookers, the sender can send money online instantly from his or her account to the recipient’s account. The recipient can then withdraw the money by asking MoneyBookers to send him or her a cheque or wire.

MoneyBookers

PayPal: PayPal is an online wallet system in which the money in the user accounts is held in US$. However, it is possible to withdraw funds to a bank account in some countries, other than just the USA. PayPal offers free accounts to persons in 37 countries, but restricts the countries to which payments (transfers) may be sent*. Only persons with PayPal accounts who live in certain countries, and who have bank accounts in those countries linked to their PayPal accounts, can withdraw money in their PayPal accounts, by withdrawing the money to their bank accounts.

PayPal

E-Gold: E-gold is an electronic currency (e-currency), that is backed by stored gold bullion. There are other e-currencies, some of which are also backed by gold, but we have only listed e-gold here as it is the most widely used and trusted e-currency. As stated in the E-gold web site, “E-gold is integrated into an account based payment system that empowers people to use gold as money. Specifically, the e-gold payment system enables people to spend specified weights of gold to other e-gold accounts. Only the ownership changes - the gold in the treasury grade vault stays put.” E-gold can also be bought and spent (transferred) by reference to a national currency, e.g. US$200 worth of e-gold, as well as by reference to the weight of the gold that backs it, e.g. 5.3 grams worth of e-gold.

Persons around the world can open a free account online at the e-gold web site, and then purchase e-gold from exchangers around the world. (E-gold exchangers are also known as exchange market makers.) The e-gold purchased from an exchanger is transferred online, by the exchanger, to the purchaser’s e-gold account. A person who has bought the e-gold may then instantly transfer it to anyone else who holds an e-gold account. The recipient can then sell their e-gold to an exchanger and arrange for the funds to be transferred to their bank account, or receive the funds in a cheque. A person can access his or her e-gold account, and send and receive e-gold with a WAP or PCS enabled mobile phone.

E-Gold

Send Money with an ATM Card or a Debit Card

Once set up, receiving money sent from overseas with a debit card can be reasonably quick. Furthermore, with most debit card money transfer options, the recipient does not even need to have a bank account. The exchange rates are usually excellent as Visa and MasterCard use rates based on the interbank rates. Since there are several different fees and charges with this way to send money overseas, it can be a little tiresome totalling them up for comparison with other options. It is worth the trouble of doing so, as the total cost is usually very competitive, and many recipients appreciate the convenience of a debit card.

Debit cards are used to send money overseas in the following way: an account, to which a debit card is linked, is credited with funds by a sender in one country, and the card is then used by a recipient in another country to withdraw those funds at an ATM (Automatic Teller Machine), in the local currency.

Service Providers: Banks in most countries offer deposit accounts with linked debit cards.