We reviewed all the popular money transfer companies to see what the best ways to send money internationally are. Find out which transfer service is right for you!
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Takeaway: Wise is the best overall transfer service. New users will also get a fee-free transfer of up to $600 when using this link.
Overview
According to the World Bank, people around the world send over $689 billion of international remittances annually!
It’s a mind boggling number for sure, but it makes sense given how many people live away from their native country in search for better opportunities. Once they start earning money, they send a portion of that back home to support their family.
India, China, and Mexico are the top 3 countries that receive remittance. The Philippines, Egypt, Nigeria, Pakistan, Vietnam, Bangladesh, and Ukraine round out the top 10:
The money transfer services that people use to send money internationally are highly profitable businesses, making the bulk of their money from transfer fees and differences in exchange rates.
Are you someone who sends money overseas on a regular basis or someone who receives money from people and are concerned with all the fees being charged? Maybe you’re wondering what type of options are there to lower the costs.
If so, you’ve found the right place as I’m going to review what the most efficient way to transfer money overseas is.
Types Of Fees For Sending Money Internationally
There are a number of costs to expect when you send money internationally. Some are almost universal regardless of how you’re sending the money.
One is the transfer fee, which depends on the transfer method you choose (credit card, debit card, wire transfer) and the other is the difference between the real exchange rate and the actual rate the transfer company uses.
Transfer Fee
The transfer fee is charged each time you make a money transfer. The exact cost of this depends on how you fund the transfer, with credit cards typically being the most expensive option and wire transfers from banks being the cheapest:
| Transfer Method | Credit Card | Debit Card | Bank Wire Transfer |
| Transfer Fee | High ($$$) | Moderate ($$) | Low ($) |
Let’s take sending $1,000 from the United States to Vietnam as an example.
Western Union, one of the most well-known transfer companies, charges $48.00 for using a credit card, $21.00 for using a debit card, and $6.00 for a bank transfer when transferring $1,000 to Vietnam from the United States:
I don’t recommend using a credit card unless you have to. Not only are the fees charged by transfer companies high, but if your credit card company considers this a cash advance – and many do – you’ll be hit with an additional cash advance fee.
Exchange Rates
A lesser known fee which you might not even realize is on the exchange rate. Specifically, the difference between what the real exchange rate is and actual rate that the transfer company uses.
Hidden at the bottom of Western Union’s transfer page is a footnote that states the following:
How do you figure out the amount of this fee then?
Sticking with sending $1,000 to Vietnam, the actual exchange rate according to Morningstar between the United States dollar and the Vietnamese dong is $1 dollar to 23,177 dong:
So, $1,000 is equivalent to 23,177,000 Vietnamese dong by multiplying $1,000 by 23,177 (yes, you’d be a Vietnamese dong multi-millionaire).
Western Union, however, is exchanging your $1,000 for only 22,921,000 VND:
The difference of the real exchange amount of 23,177,000 Vietnamese dong compared to Western Union’s exchange amount of 22,291,000 Vietnamese dong is 886,000.
Converting 886,000 VND back to USD is $38.23!
That’s how much Western Union is making on the exchange rate alone. The difference from the currency conversion on this particular currency pair is nearly 4%.
Combining the transfer fee and the exchange rate markup, using Western Union will cost you a total of $86.23 for using a credit card, $59.00 for using a debit card, or $44.23 for a bank transfer when transferring $1,000 to Vietnam from the United States.
Keep in mind that’s for a $1,000 transfer. The more you send, the more money they’ll make on the exchange rate difference.
This is why it’s so important to understand what options you have when you want to send money abroad.
Money Transfer Companies
Because there are quite a number of companies that help transfer money internationally, it’s hard to know which service you should use. Without making an informed decision, you could be stuck with a lot of fees like the example we went over.
But fees aren’t everything to everyone. Maybe the money needs to be sent the fastest way possible or perhaps you want to have different transfer options available.
Below are 5 popular money transfer companies; each with their own unique pros and cons. Which one you should use depends on what you value most:
| Money Transfer Company | Best For |
| Western Union | Transfer Options |
| Transferwise | Cheapest (tie) |
| Zoom | Fastest (tie) |
| OFX | Cheapest (tie) |
| MoneyGram | Fastest (tie) |
Western Union = Best Transfer Options
Transfer Money With Western Union
Although I ragged on Western Union because of its fees, they do have an extensive worldwide network of locations that cover over 200 countries and have many ways to send and deliver money.
You can send money from their web site or the Western Union mobile app, and transfer it using a credit card, debit card, or bank account – or even directly with cash by visiting a local branch location.
Overall: Transfers aren’t the cheapest and delivery time depends on what method you choose, but it’s super convenient due the countries they cover and the amount of branches you can visit.
TransferWise = Cheapest & Easiest
Ninja Update 12/20/21: TransferWise is been renamed to just Wise. Everything else in this review remains the same.
New users who sign–up will get a fee-free transfer of up to $600. I personally use TransferWise and love it.
They don’t mark up exchange rates and in the majority of cases, you pay a very competitive transfer rate that depends on the amount you send – usually it’s less than 1%.
TransferWise is also a favorite among expats who get paid in a foreign currency and want to convert and transfer it to their bank account at home.
Overall: TransferWise strikes a balance between convenience and costs. Although transfers usually take a few business days to complete, their fees are one of the lowest in the industry – perfect for those who want to save on fees and don’t need the money to be available immediately.
Xoom = Fastest
Xoom is a service owned by PayPal that specializes in fast transfers to over 70 countries. You can send up to $25,000 to some countries, although the limit in others can be $10,000 or less.
You can pay by credit card, debit card, or bank account and most money transfers arrive within minutes of sending. Xoom is able to send money fast by partnering with major banks abroad, which allows users to have money delivered quickly to bank accounts or immediately available for cash pickup.
Fees are where Xoom is behind competitors. In additional to potential transfer fees depending on what countries are involved, Xoom makes money by marking up the exchange rates.
Overall: If the person you’re sending money to needs access to the funds immediately, Xoom is a top choice to consider.
OFX = Cheapest (tie with TransferWise)
OFX is an online money transfer provider that lets you transfer money from the U.S. to more than 80 counties via its web site and mobile app.
Like TransferWise, its biggest advantage is the very low costs (no transfer fees and very little exchange rate markups) and no maximum cap on the transfer amount.
However, it may not be suitable for everyone because it requires both parties to have bank accounts and the minimum amount sent needs to be at least $1,000.
Additionally, don’t expect same-day delivery that other transfer services like Xoom or MoneyGram offers.
Overall: OFX is best if you’re looking for cheap bank-to-bank transfers and speed of delivery isn’t an issue.
MoneyGram = Fastest (tie with Xoom)
MoneyGram, like Western Union, boasts a network of locations in more than 200 countries and territories. Their business model is also very similar to Western Union. Transfers sent to bank accounts in other countries usually only take a few hours or one business day while transfers between MoneyGram locations take just minutes to be available for cash pickup.
The drawback are the fees – it’s not cheap. Exchange rates aren’t favorable either with average markups higher than 3%.
Overall: MoneyGram is a suitable option if you prioritize speed over costs. All the MoneyGram transfer options are super fast (like Xoom) and they have an extensive network of locations (like Western Union).
The Bottom Line
Sending money abroad is very popular and will only continue to grow bigger as more people travel, live, and work in foreign countries. There are many money transfer providers out there so it’s important that you ask yourself what matters most.
Is it the number of options? Lowest fees? Fastest delivery?
Understanding that, you can choose the right money transfer company that fits you best.
