It’s never been easier to send money abroad. Whether you’re helping to support your family, sending a gift, or paying for a service in another country, you have several options available to move your money around the world.
Remitly makes moving money around the world easy. In this article, we’re going to look at two of the options you have available: remittance vs. bank transfers. We’ll see what’s cheaper, what’s faster, and which is the best option for your circumstances when you want to move money abroad.
What are remittance services?
Remittance services exist to provide convenient money transfer options to individuals and businesses alike. Often, these are digital platforms that connect senders with recipients around the world. They use a website or app that enables you to access your money easily, and send money abroad from anywhere, and at any time.
A good remittance service will offer fast, secure, and simple transfers with transparent pricing so you know right away what it’ll cost.
How do bank transfers work for international payments?
Traditional banks used to be the main way people moved money across borders. Typically, banks rely on the SWIFT system. This is a global messaging network that allows financial institutions to communicate transaction details securely and make international money transfers.
When you send money abroad through your bank, your payment travels through a series of correspondent banks that all talk to each other. This is great for security; it helps to ensure that the funds arrive safely. But it can add both time and cost to the process.
Most banks provide a few different types of international transfers:
- Wire transfers. Direct transfers from one bank to another are sent through networks like SWIFT. You can make a wire transfer at a branch of your bank or online.
- Online banking transfers. Many banks allow you to send international payments through an online portal or a mobile app. Generally, these banks still rely on networks like SWIFT.
- Correspondent bank transfers. Some banks have partnerships with banks in other countries, or even have a multinational presence of their own. Others, however, don’t have this direct relationship, and so they’ll need to talk to a third or even fourth bank that does.
Banks are trusted institutions, with a long history of handling cross-border payments. That can give you peace of mind that your money will end up where you want it to.
With that said, the way banks send money internationally, especially if they use correspondent transfers, can make international transfers considerably more expensive, more complex, and therefore slower than using a remittance service. Usually, a remittance service offers the cheapest way to send money internationally, helping you save on wire transfer costs.
Cost comparison: fees and exchange rates
Sending money comes with costs. International wire transfers are often more expensive than domestic ones, and not just because of the exchange rates. Banks and remittance services charge fees for your transfer, so take a close look before you make your decision.
The price of an international money transfer at the bank can vary considerably, depending on the institution you’re using, the amount you’re sending, and whether you want to send dollars or another currency. With many banks, you’ll pay a marked-up exchange fee if you don’t send in US dollars.
Speed and convenience
Cost, of course, isn’t the only factor in your decision. You also need to think about how quickly your money will get there, especially if the person you’re sending it to needs it in a hurry, or you’ve got a fixed deadline like a birthday that you don’t want to miss.
As we’ve mentioned, banks can vary in how long it takes them to send money internationally, especially if they use a network of other banks to make the payment. The more steps that go into a wire transfer, the longer it will take. Let’s look at that example of sending money to Mexico again;
| Provider | Typical Transfer Time | Notes on Delivery |
| Chase | One to three business days | Depends on cut-off times, SWIFT intermediaries, and the receiving bank. |
| Bank of America | Two to three business days | Uses SWIFT/correspondent banks; longer if USD must be converted to MXN. |
| Citibank | One to two business days | Slightly faster due to Citi’s international presence, but still not instant. |
| Wells Fargo | One to three business days | Via SWIFT for wires. Wells Fargo’s ExpressSend to Mexico can be same day for certain partners, but with limits. |
| Remitly | Minutes to 24 hours | “Express” option delivers within minutes (using debit/credit), while “Economy” takes one to three business days but with lower fees. |
Many banks have daily cut-off times, so if you make the transfer after that time, you’re already looking at the process starting the next banking day. Most of them don’t process international payments on weekends, either, so the fact is that those one- to three-day timescales can reach five days.
How will the money be received?
You should also be aware of how each bank will get the money to your recipient. Many banks will transfer directly into the recipient’s account, but in some markets, they may need to actually go to the bank in person to receive their money. That means they’ll be limited to bank opening hours.
Remitly offers more options; a recipient can have the money you send deposited directly into their bank account, and in some markets, you can also choose cash pickup. This is great if your recipient doesn’t have a bank account or doesn’t use online apps.
Security and regulation
We’ve covered costs and timing. What about security?
Brand-name banks are a safe option. When you send a wire transfer through a recognized and FDIC-insured bank, you can rest assured that your money will be protected through every step of the transfer process.
Likewise, legitimate remittance services are licensed and regulated, and in compliance with rules laid down by the US Department of the Treasury.
Security measures compare well with traditional banks—in fact, in some cases they’re even more advanced. For example, Remitly uses high-level data security, including Transport Layer Security (TLS) and encryption protocols like AES256 and 2048-bit RSA.
Follow the money
Remittance services also usually offer the ability to track your transfer. Sometimes, sending a wire transfer through a bank feels like sending your money into a black hole and you may not know what’s happening until it arrives at the other end. With a remittance service, you can watch every step of the process through the app or website.
Whether you send your money through a bank or through a remittance service, you don’t need to worry about your money arriving where it needs to be.
When to choose remittance services
A remittance service can help you send money across borders more easily, more quickly, and more affordably than a traditional bank.
Remittance services are particularly good for regular, smaller international money transfers. Because we charge considerably less than banks, using Remitly helps keep the cost of a regular money transfer to a minimum.
Remittance is also great for urgent transfers. Typically, they’re much faster than a bank transfer, with some transfers happening almost instantaneously. If you need your money to get to your recipient as quickly as possible, a remittance service usually offers the fastest as well as the cheapest way to send money internationally.
We’ve mentioned the option your recipient has to collect cash from pickup locations—this includes banks, shipping companies, and even some convenience stores. This is especially useful in developing countries, where the infrastructure may not be as developed as in the US. These services allow you to send money to friends and relatives who don’t have bank accounts or easy access to a bank.
Overall, remittance services can be much more convenient. Easy-to-use apps and websites mean you can send money from your sofa in a matter of minutes.
When banks might be better
Having said all that, there are some cases where a bank might be a better bet. For example, banks are often—though not always—better for sending large amounts of money. If you’re making a big purchase abroad, such as buying a house, banks often have larger transaction limits.
Banks are also good for business transfers where you require detailed documentation. If you need to prove that you’ve sent money abroad, a statement from a bank carries real weight legally.
Banks can also be useful if you have complicated transfer arrangements. You may be able to talk to a specialist at your local branch to overcome problems with your transfer.
Finally, some people just prefer dealing with banks. Even if you’re not one of them, your recipient might be. This is often the case with older people, who like to do things the way they’ve always done them. They may feel more comfortable going to the local bank branch to pick up money than having it automatically deposited into their bank account.
Making the right choice for your needs
Traditional banks offer help with more complex transactions, higher transaction limits, and the familiarity of dealing with a business you know well.
Which one works best for you will depend on your own priorities and circumstances. If you want to send money quickly or affordably, remittance services are usually the best option. That’s especially true if you make regular small transactions, where banks’ fees would really add up.
But if you’re looking to send a lot of money and don’t mind waiting a little longer, a bank could be the way to go. Whatever your needs are, it’s good to know you have options. Take a look at your bank’s fees and processes and see how they compare to a remittance service like Remitly. Then you can choose the best method for you.
FAQs
How much can I save using remittance services instead of banks?
The costs of an international money transfer vary a lot from one bank to another. However, remittance services are usually considerably cheaper. For example, Remitly charges a $1.99 fee for an international transfer, with no fee at all in some markets, while banks charge $30 to $45—maybe more if you’re not sending US dollars.
Are remittance services as safe as traditional banks?
They’re just as safe, with cutting-edge security protocols. Legitimate remittance services are overseen by the US Department of the Treasury and are fully licensed and insured to keep your money safe.
How long do remittance transfers typically take?
In some cases, a remittance service can transfer money from one country to another in just a few minutes, or even instantly. In other cases, you can usually get your money sent in 24 hours if you’re in a hurry.
Can I send large amounts through remittance services?
Remittance services are especially good for sending regular, small transactions overseas. For large amounts over a couple of thousand dollars, it may be better to choose a wire transfer through a bank.
What information do I need to send money internationally?
Usually, you’ll need:
- the recipient’s full name,
- their bank account number or mobile wallet details,
- the receiving bank’s information, including SWIFT/BIC code.
Some countries also require the recipient’s address or ID number, and for cash pickups the recipient might be asked for photo ID.