International Money Transfer Services... a traveler’s and expat’s guide

A big challenge faced by working travelers and expats is sending money internationally. Many choices exist for international money transfer and finding a fast, secure and inexpensive money transfer service can save you a lot of money and hassle.

Jobaroo understands this, because we have been there and done that ourselves. In this International Money Transfer guide we compare all the options available including online money transfer services, using banks and services such as western union or travelex.

The information contained on this page is suitable for money transfers between many countries including money transfer to Australia and from Australia.

The Most Common Options:

You HAVE A BANK ACCOUNT in the country where you want to receive money:

1. Inter-Bank Transfers » (transfer money from one bank to another)
   Most suitable for amounts less than $1000 or smaller once-off transfers
2. International Money Transfer Companies »
   Most suitable for amounts greater than $1000 or regular transfers

You DO NOT HAVE A BANK ACCOUNT in the country where you want to receive money:

1. Western Union and Travelex »
   Most suitable for amounts less than $1000
2. Credit Card Money Transfer »
   Most suitable for amounts less than $1000

1. Inter-Bank — International Money Transfer Services

Transferring money from one bank to another can be a fairly straight forward process and can be done online or in the branch. The downside of inter-bank transfers is that fees and exchange rates are usually relatively high compared to International Money Transfer Companies.

The big difference between transferring money from one bank to another and money transfer companies is the exchange rates and fees (see below), which can differ significantly.

• Most banks worldwide will provide facilities along with your bank account so you can transfer money online to an overseas bank account.
• You will need to have the SWIFT number and/or the IBAN for the receiving bank. You will also need the account details of the receiving account, the address of the receiving bank, the account name and often the receiving bank's address.
  • For transfers to Europe (including the UK) ask the receiving bank for the IBAN is an international standard for identifying bank accounts across national borders).
  • Money transfer to Australia and Canada generally require the SWIFT number of the receiving bank.
• The amount you can transfer for each transaction is often limited, however the limit varies widely between sending banks.
• Fees are generally around AU$20, CA$20, €15, GB£15, US$15 for their standard services and about double that for priority services.
• Note that receiving banks sometimes also charge a fee — so be sure to check to avoid surprises.
• Exchange Rates for inter-bank transfers are generally not as good as dedicated International Money Transfer Companies.
• You can use inter-bank online money transfer service to send money to yourself or to a third party.

Bottom Line

For transferring relatively small amounts, the convenience of not having to sign up to a third party service outweighs the extra costs you’ll incur by using an inter-bank service. However, if you want to make more than one transfer or transfer amounts over AU$1000, GB£500, €1000, US$1000 you will almost certainly save money by using an International Money Transfer Company.

2. International Money Transfer Companies

International Money Transfer Companies now save many travellers, expats and exporters many millions of dollars annually. Companies like Tranzfers (51% owned by Macquarie bank) have pioneered these dedicated online money transfer services which have been warmly welcomed by those looking for a better option to banks or western union money transfers.

How does it work

Tranzfers and most similar companies follow a simple two step process.

To move your money overseas, first you move the amount you want to send from your bank account to the bank account of the international money transfer company. This first transfer is free since they are in the same country as you.

The international money transfer company then sends your money overseas via its own international bank account network. Importantly, when the money arrives overseas you can choose to wait for the right exchange rate (real time) or you can have it exchanged automatically upon arrival. A set fee applies to the transaction, as set out below. Your money is then deposited into your specified destination account.

Tranzfers, for example, have offices in the countries where they send and receive money so you can send money and get phone or online assistance 24 hours a day with actual currency traders, which ensures everything runs smoothly.

• Tranzfers and other similar services are companies dedicated to international money transfer and they can therefore offer exchange rates and transaction fees that usually beat the banks.
• 24hr service and offices in all the countries they transfer money to ensures you can always speak with or contact a currency trader for assistance.
• To set up your money transfer account these companies usually require identification in the form of a copy of a passport/driver’s license and a signed bank statement (of the bank where the funds are coming from) showing your current residential address.
• Fees per transaction are as follows: AU$15, CA$15, €10, GB£7, HK$60, NZ$15, SG$15, US$5.
• Currently, Tranzfers moves money between the UK, AUS, NZ, SA, Singapore and Canada.
• The minimum transfer amount is AU$100, NZ$100 and GB£50.
• Payments can also be made to credit cards in AUS and NZ.

Bottom Line

Best for saving money and flexibility.

If you are transferring money from your overseas account to your home bank account or back the other way Tranzfers or another reputable service like it, is definitely the way to go. If you are comparing reputable services, be sure to check exchange rates and fees.

Exchange Rates and Fees

When you are comparing costs between your bank and various money transfer services companies, there are two major considerations:

Exchange Rate

Rates vary significantly from 0.7% to 2.5% so it pays to compare. Some international money transfer companies will offer “free” transfers but the exchange rate offered is at the upper end and even higher.

The best way to see if you are getting a fair exchange rate is to compare the rate offered with the official “interbank” or “wholesale” rate. Rates of competitive providers should fluctuate on a real-time basis.

Check out Yahoo! Finance for the latest interbank rates and compare services with this rate.

Fees

Banks and online money transfer service companies will generally charge some kind of fee per transaction which generally ranges from $15 to $30. For transferred amounts over $1000 the fee will amount to less than the margin the provider makes on the exchange rate (see above). When conducting inter-bank transactions also beware of receiving fees charged by your receiving bank.

3. Western Union and Travelex

Western Union and Travelex are well-known companies that provide similar services. Sending money through either Western Union or Travelex generally involves in-person cash transactions.

The good news is that outlets exist nearly everywhere in the world. Western Union money transfer will pay out only in cash. However in some countries, Travelex will transfer cash to a bank account rather than require an in-person pick-up.

4. Credit Card Money Transfer

If you are in need of money from overseas relatives or friends also consider a credit card money transfer. You will still have to pay the banks exchange rates at the time of purchase but in terms of ease and security a credit card money transfer can be an excellent way to go.

If you want to save a significant percentage on the exchange rate you will better off using an international money transfer company, then using a credit card in the currency of the country you are using it.

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