No matter what the reason might be, sending money abroad can be a painful process for many immigrants due to numerous costs and associated fees. Despite the estimated 80-90 percent of people send money to other countries using banks, there are ways to avoid the high bank fees and save considerable sums of money in the process through online money transfer.
After all, there are extraordinary sums being sent over by migrants back to their home countries. In the United States alone, the number is close to $120 billion. Meanwhile in Canada, around $24million are being sent. Whereas the numbers grew by 9 percent to $62 billion for remittances being sent to the Middle East and Africa, according to the World Bank.
Worldwide, the number is about $583 billion - a staggering amount considering that the global foreign aid cash flow averages at about $135 billion.
Along with these global transfers from immigrants to their home countries are the various bank and transfer fees which could be significantly lowered down with the help of innovative online remittance platforms.
Image Credit: Creative Commons: PicJumbo
While using a bank is usually unavoidable, there are a variety of other services available for the consumer to take advantage of.
Many people might be reluctant to embrace new services over traditional ones, especially if they involve the internet, but they are often the best and most inexpensive and often the most secure ways to transfer money in another country, especially for recurring transfers which may incur high fees faster than usual.
The question is, what can you do to save money in your transfers?
Utilizing a variety of transfer methods
Even the most up-to-date banks often rely on the most traditional methods of moving money around which restricts some people from taking advantage of their services. Financial technology, or fintech for sort, is attempting to sort a wide range of problems and one of the ways to do that is by redefining the ways through which people move their money around. First of all, the Internet has completely changed the way we view transactions.
For instance, people can now use their mobile phones to do virtually everything, including sending money abroad. There are numerous payment and money transfer options available including e-vouchers, mobile money and digital wallets, cash pickups through dedicated services, and even mobile airtime credit. A lot of these options are increasingly popular in certain regions of the world such as the Philippines, Mexico, and most of Africa.
Many people who do not have immediate or easy access to a bank will gladly resort to other methods of money transfers, especially since banks have not made any considerable efforts to include such populations in their ranks or to ease the process of transferring money for them.
The sheer diversity of online transfers of money is staggering and the fintech sector is constantly innovating and creating new technologies in order to help people with their everyday financial transactions. The world of finance is ever-changing and the end-user can certainly take advantage of that in more ways than one.
Appealing to virtually anyone
Opening an account in the bank might seem like a fairly straightforward process to some people but that’s not always the case. Even for those that do operate an account, visiting a bank every time they want to transfer money is not always an option for various reasons may be preventing someone from doing that. At the very least, it’s not easy and convenient for a considerable percentage of the world’s population.
In contrast, online transfers are open and available to everyone with an Internet connection. Instead of relying on bank-to-bank transfers, people can utilize a number of alternative methods as mentioned above. There are very few restrictions on what can be accomplished with online money transfers and the only real hurdle for some people is adapting to the new technologies.
However, as we move forward, more and more people are happily adopting these technologies as they see the impact they can make in their daily lives. By opening up their services to as many people as possible, these services can also foster and grow so everyone stands to benefit.
Though not always a cheap, it’s sometimes the best in a tricky situation. As the name suggests, instant transfer services allow you to move varied cash amounts easily and without a hassle. Furthermore, there are various ways to complete a transaction. You may use a credit card, mobile money, or a number of different methods.
This may seem simple but different regions of the world take advantage of different financial technologies which explain why instant transfers are so appealing to many of them. This is ideal when a person in your home or any other country is in need of immediate cash, such as it happens when they have lost their wallet, for example, or if they do not have access to a bank in that area.
There are myriads of instant transfer service locations scattered all around the world but, once again, you will have to conduct some research to get the best rates. Each country will be different so you will have to invest some time before you realize what the best option for your region is. Another reason why you might want to choose such a service is that the recipients will not pay any fees upon withdrawing the money and that they only need an ID card or a special code in order to authorize the withdrawal.
In many cases, such services can be cheaper than banks, especially when you opt to transfer cash to an account rather than direct them to another location for a pickup service.
Peer-to-peer transfer services
The flexibility of the Internet has given rise to diverse services that wouldn’t have been possible without it. One of those includes the peer-to-peer money transfer services whose systems allow its users to send and receive money with extremely low costs.
For the end-user, these services are indistinguishable from traditional ones. You pick a recipient, choose an amount, and send it over. After a business day, the initial processing is completed and the funds are transferred to the recipient.
However, these services work very differently in the background. Instead of transferring the money directly from the sender to the recipient, P2P services redirect money from an equivalent transfer going in the opposite direction. This allows them to avoid costly fees associated with currency conversion and international transfers which in turn allows them to charge far less to the consumer.
P2P services are becoming increasingly popular as more people turn to the internet to conduct transactions and avoid lengthy and costly processes that are often associated with traditional services like banks. And when you use a reputable company, your money will always be safe and protected
The world of online transfers of money keeps changing and it’s usually for the better. Consumers who stay up-to-date with current technologies always stand to benefit from them, especially if they are early adopters. It may be hard to find reliable companies and business sometimes but that is another issue that the Internet can easily solve as feedback from other people is readily available at your fingerprints.
Before, quick and easy transfers to anywhere in the world would have been considered practically impossible because of the costs and time involved in these processes. The explosive growth of fintech companies, however, has forced financial institutions around the world to adapt or wither.
Competition in this sector has proven to be extremely healthy for the consumer who now has more options than ever before. As these services continue to grow, they also become more accessible and inexpensive which means that more people can take advantage of them. By utilizing these new technologies, beating bank fees when sending money abroad has never been easier.