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How to Send Money Abroad - A Simplified Guide


You may have noticed that, as of late, there are a growing number of ways to send money to your loved ones back home. Getting a better understanding of each option will allow you to make a more informed decision and get the most of the option you select. That’s where this guide comes in!

In this simplified guide, you’ll find the most important information on a tailored selection of services that send money abroad. You’ll also find details on how to select the best service according to your needs; whether you want to send money from your smartphone, pay an invoice, or deposit directly into a bank account abroad. 

The financial well-being of our families, both here and abroad, is of utmost importance so selecting the right option can make a huge difference in our peace of mind. Knowing how each service works and its costs will give you that control and assurance over your money.

Your Options For Sending Money

When considering how to send money abroad, answering the following questions is an important first step:

  • Who are you sending money to?
  • What is the purpose of the money transfer?
  • How much urgency do you have?

Keeping your answers in mind, review the options we’ve listed below and find the one that fits your needs the most:

Banks And Credit Unions

Banking and credit institutions have taken on the task of simplifying sending money for their customers, however, that sometimes comes at a higher cost. The advantages are that you can send money in person, over the phone, online or in some cases at an ATM. It’s also known to be safe and reliable. The disadvantage is that you may have to pay higher fees. You’ll also need to make sure the recipient has a way of accessing the money on their end without incurring too many fees. Look over the details of their transfer services carefully. 

Traditional Remittance Companies

When you think about how to send money abroad, this is typically the most well-known option. One advantage they have over other services is that they have a huge presence in the United States, Mexico, and Latin America. In some cases they are available in more remote locations abroad. The disadvantage can be higher fees and potentially less security on the transfer. Some of these companies don’t have branches of their own, instead, they offer their services through agents in shops, supermarkets and check cashing establishments. 

New Remittance Platforms

These companies differ from the previous two in that they usually don’t have branches of their own nor do they offer their services through independent agents. There are a variety of different service providers in this category, but most of them offer the option to send money or pay bills directly from your mobile phone. The advantage is the ease of use and typically they are cheaper than the traditional services. A potential drawback is that they do not have the same history and security measures as financial institutions. 

Managing The Cost Of Sending Money

It’s important to understand that there are several types of fees associated with sending money. Some are immediately obvious, while others may be more difficult to see. Be sure to familiarize yourself with all them as every penny not spent on fees is another penny that the recipient receives. 

The Cost Of Sending Money Abroad

  • Transaction fee: This is a fee for the process of sending money, it can be fixed or variable. Some companies charge a percentage of the amount you send, while others have a fixed cost for transfers up to a certain amount. Others charge a monthly fee no matter how many times you send money per month. This is the first cost you should consider.
  • Exchange rate: The exchange rate is the value of one currency for the purpose of conversion to another and it changes from vendor to vendor. Be sure to compare it before making the transfer. As you can imagine, the better the exchange rate, the more money your loved ones will receive.
  • Exchange fees: This fee is often one of the most difficult to spot. Companies almost always charge a percentage of the transfer amount as an exchange fee, and you guessed it - the lower the percentage the better. The average is about 1%-2% of the total amount sent.

Tips For Sending Money

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  • Always look for a service provider that offers a flat transaction fee or that has no fixed cost per transaction.
  • When possible, pay all the fees when initiating the transfer so you can be sure that the recipient won’t get a nasty surprise when receiving the funds. 
  • Have a service in mind in case of an emergency - this means something reliable and fast. There are providers that allow you to make transfers 24 hours a day. In some cases, you can even send money with a simple text message.
  • Remember to always ask if there will be additional charges, either for sending or receiving the funds. You should also ask for the exact amount in the local currency that will be paid to your loved ones, so you can share this with them and ensure they get what they’re meant to.

Keep in mind: Money transfer companies should provide a toll-free customer service number in Spanish, if that is your preferred language.

Requirements For Sending Money

Regulations and requirements for money transfers have become stricter since the approval of the "Patriot Act” in 2001. These are measures to identify and help stop money laundering and prevent the illicit transfer of funds. This means that there are additional identification and security measures in place that you’ll need to be aware of. 

It may differ depending on the provider, but you’ll most likely need the following when initiating a transfer:

  • A photo ID.
  • Address, telephone number and the full name of the person who will receive the money. The name should be written exactly as it appears on the official ID they’ll use to receive the money.
  • If you’re paying a bill, you will likely need the account or phone number associated with that service. 

Keep in mind: Always make sure that the service provider gives you a receipt and proof of your transfer or service payment. If you need to come back and contest something, you’ll need it as proof. 

Choosing a money transfer service

There are a great number of money transfer services, some will fit your needs better than others. In order to decide which service to select, you should keep the following in mind:

  • Hours of operations (how accessible it is).
  • Speed of transfer.
  • How convenient the process is (Do you have to go in person? Can you do it from your phone?).
  • Their security protocols and reputation.

You already know how to identify transaction costs, but it's also important to consider the following aspects before making a decision:

  • Payment and cashing points - find out the locations and hours of operation where the recipients can receive the money transfer in the country of designation.
  • Requirements to cash the money transfer - Find out the requirements that each company has for the recipients to cash the transfer.
  • Transfer amount and processing time - Make sure they tell you the exact amount that your loved ones will receive in the destination currency and how long it will take for them to receive the money.
  • Customer support - We've already talked about the importance of you having access to a toll-free customer service number; however, ask if they also have a toll-free number for your recipient to call in case they have any questions.

Keep in mind: You are in control of your money. Find the best option for you by comparing costs, evaluating money transfer options and ascertaining how easy or difficult it may be for the recipient to access the funds. 

Tips for protecting your money

Most important of all is making sure you protect your money when transferring it. Below you’ll find suggestions to do just that.

  • Never send money to strangers. Many scammers pose as "victims" and ask for money.
  • Never send cash through the mail or courier services. There are many options for sending money safely and quickly. Further on in this article you’ll find a number of great options.
  • Avoid sending cash with friends or family traveling home. Aside from the risk of them losing the money, it could also affect your personal relationships.

If you have been the victim of fraud, we suggest you report it immediately to the police and visit your nearest consulate or embassy to request free advice. 

Keep in mind: Sometimes the options that appear to be cheapest end up being the most expensive. Always compare both transaction costs and the exchange rate that the services offer. If it looks like too good a deal, dig deeper into the background of that service to make sure it’s legitimate. 

Send money with greater confidence!

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The Federal Consumer Protection Regulations now apply to remittance services, thanks to these measures we can send money to our loved ones with more confidence. These regulations include the following:

Information disclosure

Regulations require that companies provide you with a statement or voucher with the following information before the transfer has been completed:

  • The fees and taxes charged by the company.
  • The fees charged by agents, companies and intermediary institutions abroad.
  • The amount that will be paid abroad, considering local taxes or fees charged to the person receiving the money.

After making the payment, remittance services must also provide a voucher or receipt with the same information listed above, as well as the following information:

  • The date the money will reach its destination.
  • The right to cancel the transfer.
  • What to do in case there is an error.
  • How to file a complaint.

Additional protections

Regulations also state that:

  • Consumers should have at least 30 minutes to cancel a transfer. If they cancel, consumers are able to get their money back.
  • Businesses should open an investigation whenever a consumer reports a problem with a transfer. Consumers can usually get a refund or have the transfer re-sent at no cost for certain errors, as long as the money has not arrived as promised. 
  • Companies that provide remittance services are responsible for the mistakes made by their employees.

Coverage

These regulations will only cover transfers that pass the following requirements:

  • It must exceed 15 dollars.
  • It must be initiated in the United States.
  • It must be sent to a person or business abroad.

These regulations apply to the following types of companies:

  • Banks
  • Remittance companies
  • Savings banks
  • Stockbrokers
  • Credit unions
Keep in mind: Having problems with a financial product or service? The Consumer Financial Protection Bureau (CFPB) will answer your questions and manage complaints regarding money transfers (remittances), credit cards, credit reports, mortgages, student loans, bank accounts and services, consumer loans, and more. You can get support in English or Spanish. All you need to do is call 1.855.411.2372.