Sending money internationally can be pretty stressful. Hidden fees, confusing exchange rates, and long transfer times can all make it difficult to know if the funds will reach the recipient in full and on time.These money transfer challenges are common, but they don’t have to stand in your way of providing support to your loved ones back home. The good news is that there are some easy fixes for overcoming them. At Remitly, we provide quick and secure money transfers—but we also equip you with the knowledge to manage your finances internationally. In this post, we’ll explore the most common obstacles to sending money and how to overcome them.
What are the most common money transfer challenges?
With modern advances in technology and banking infrastructure, transferring money internationally is easier than ever—but there are still some hurdles to overcome. Here are the most common issues:
- Hidden fees: Some charges, like forex markups or intermediary bank fees, aren’t always provided upfront to senders. This can make it difficult to anticipate how many deductions will be levied against the amount you’re sending.
- Security concerns: Weak security on the platform you use to send money could expose your financial details and make you a victim of crimes like fraud and identity theft.
- Fluctuating exchange rates: The value of currency pairs (i.e., how many units of the currency you hold it takes to buy one unit of the currency you want) changes all the time, which can have a big impact on the overall value of the transfer.
- Recipient access constraints: When sending money to destinations with limited banking infrastructure, the recipient could have difficulty accessing the funds.
- Transfer delays: Bank processing times, weekends, holidays, and regulatory checks can all extend the timeline for transfers, which can cause a lot of stress if you’re sending money that’s needed urgently.
- Compliance requirements: Countries around the world have different regulatory requirements when it comes to sending and receiving foreign currency. This can complicate or delay the transfer process.
While the remittance process has plenty of potential roadblocks, there are, fortunately, just as many solutions for overcoming them.
Tips and tricks for sending money overseas
With the right tools and information, it’s easy to keep costs down, avoid delays, and keep your financial information safe when carrying out money transfers.
How to avoid hidden fees when sending money internationally
Hidden fees can quietly chip away at the amount a recipient actually gets out on the other end of your international money transfer. From undisclosed markups on the exchange rate to surprise charges from intermediary banks, these extra costs can add up fast.
To ensure that your funds don’t get eaten away by fees, follow these tips:
- Choose a provider that provides transparent fee schedules. This ensures that you, and whoever you’re sending money to, know exactly how much they’ll get.
- Compare the full cost, not just the advertised fee. A low transfer fee might look good, but it doesn’t mean much if the money transfer service you’re using tacks on high exchange markups.
- Use fee calculators before you hit “send.” Many money transfer tools enable you to compare costs like fees and exchange rates so that you can figure out the potential deductions.
- Look out for third-party markups and deductions. Banks and other intermediary services may add more fees besides the ones charged by your money transfer service. It’s a good idea to find out what these might be on the recipient side.
A little research will go a long way here. Looking at the fees outlined upfront and digging into the terms and conditions can give you a good idea of exactly what you’ll pay.
How to make secure money transfers
Unfortunately, there are plenty of cybercriminals out there who would love to get their hands on your personal information, like your identity number and financial details.
That’s why it’s essential to choose trustworthy money transfer providers and follow best practices for online security.
First, always check that the remittance providers you’re considering use SSL encryption on their website. This helps to ensure that your financial details remain protected in transit. An “https://” at the start of the web address or a padlock symbol in the address bar of your browser indicates that the site is encrypted.
You’ll want to investigate the platform’s fraud protection tactics and policies, too. Midern services should use encryption technologies, identity verification, and ongoing fraud monitoring to keep transactions secure.
Your digital habits also matter. Be sure to create strong passwords, enable two-factor authentication, and avoid sharing your login details with anyone.
Finally, verify that the providers you might transfer with are licensed and regulated by the relevant financial authorities. Although it’s not entirely foolproof, regulatory approval shows that the business has met the standards for keeping customers safe and preventing fraud.
How to get the best exchange rates
The exchange rate you get will affect the final amount of money the recipient gets. Rates are usually shown as currency pairs. For example, the USD/MXN rate tells you how many Mexican pesos one US dollar will buy. Even a small shift in the value of either currency can have a big impact on how many dollars will translate to a certain amount of pesos.
Comparing exchange rates will help you to get the most value out of your money transfer. Imagine you’re sending $500 USD to your family in Mexico. One provider you’re considering offers you a rate of 18.00 MXN, while another offers 18.50 MXN. Going with the provider that’s offering 18.50 could see the recipient getting an extra 250 MXN, which could cover additional groceries or help pay for a utility bill. That’s a pretty meaningful difference.
Making a careful comparison and opting for a provider that offers attractive rates and transparent fees will help to ensure that your transfer delivers the maximum benefit to the recipient.
How to overcome geographic and access constraints
Not every place has the same level of banking infrastructure or digital access. Holding a bank account might be unusual in some countries or regions. Plus, withdrawals can be challenging if a recipient lives far from a bank branch or if internet access is limited.
These obstacles can make it difficult to know whether the money you send internationally will reach the person you’re sending it to—and whether they’ll be able to access it conveniently. Fortunately, there are a few transfer methods you can use to send money to someone without a bank account:
- Cash pickups: A recipient can collect money in person at partner locations such as banks, shops, and remittance outlets.
- Cash in the mail: Some remittance companies will arrange for funds to be delivered to a recipient’s home address.
- Mobile wallets: Sending funds to a mobile wallet is especially helpful in countries where mobile banking is more common than traditional banking.
- ATM card reloads: Adding money to a prepaid card allows the recipient to receive and withdraw funds without the need for a bank account.
How to send money across borders quickly
When emergencies happen, every minute (and every cent) counts. Transfer delays can add unnecessary stress when your loved ones need urgent support.
There are various factors that affect how long a money transfer takes, but a smart way to ensure that you can get funds from A to B quickly is by choosing a remittance service that offers expedited transfer options.
Another option may be to keep the bank account you hold in your home country open and make regular international transfers to it. This can help you build up an emergency savings fund from which you can easily make payments to your loved ones in need when the time comes.
How to make compliant money transfers
Laws and regulations around money transfers vary from country to country. And, in some cases, they can create a variety of obligations for the sender or recipient. For example, in South Africa, recipients need to declare foreign currency receipts above certain thresholds and money given as gifts can be treated as taxable income if it exceeds these limits.
That’s why it’s worth taking time to understand the requirements that apply in both the sending and receiving countries. These may include reporting obligations, limits on how much can be received tax-free, and documentation requirements for larger transfers.
Working with a transfer company like Remitly that’s licensed (and therefore regulated) in multiple countries can make staying compliant much easier.
Conclusion
Sending money internationally comes with its fair share of challenges, from navigating fluctuating exchange rates to uncovering hidden fees. Fortunately, with a little forward planning, you can keep your transfers secure, cost-effective, and stress-free.
Comparing exchange rates, watching out for hidden charges, and choosing the right delivery method can all make a real difference.
The most important thing to do, though, is pick the right remittance provider. Remitly offers transparent fees, reliable security, and speedy service so you and your loved ones can enjoy the benefits of easy cross-border money transfers.
FAQs
What fees should I look for when sending money internationally?
Be mindful of transfer fees, exchange rate markups, and other costs hidden in the remittance provider’s terms and conditions. Flat transfer fees can be a benefit for sending large amounts of money, but for smaller transfers, look for a percentage fee instead.
How can I avoid hidden fees when sending money?
Look beyond the upfront transfer fee that’s advertised on the home page of a remittance provider’s website. Check the exchange rate that’s being offered, along with the terms and conditions around fees. Don’t forget to use comparison tools to weigh up your options and see the “going rate” for the transfer you want to make.
How do I ensure my transfer is safe?
Only use platforms that offer encryption, fraud protection, and are licensed. Safeguards like SSL encryption, identity checks, and fraud monitoring are non-negotiables here. Verify that the provider you choose is authorized to operate both in your country and the recipient’s. This helps to ensure that everything is above board and your transfer is kept safe.
What’s the fastest way to send money in an emergency?
Look for providers offering expedited transfers—like Remitly’s Express transfer service—help to ensure that your transfer reaches the recipient quickly and reliably. You might also consider keeping your bank account in your home country open and making regular transfers to it. That will ensure that there are at least some local funds that will be quickly accessible in an emergency.
What’s the best way to get a good exchange rate?
Start by comparing rates among different providers. Look for rates that are nearest to the mid-marked benchmark (i.e. the rate you see on Google or other platforms when you search for the currency pair). Be sure to check if the provider you’re leaning towards adds any fees or markups.