Best ways to send money online

One might have many reasons to transfer money abroad: you are student and money from your parents, you found your dream job and decided to relocate in another country or you’ve decided to retire in Spain or Portugal to enjoy warmer temperatures. Let me share with you my experience and a tool that allowed me to find the best way to send money online.

Why banks are not the best way to send money via Internet?

Many of us are used to go to our bank when we need to make an international money transfer. I remember when I was studying in London, my parents (in France) were sending me money each month to help me with my day-to-day expenses. We did not even ask ourselves if there were alternatives, we knew we could do it from home and that there was no need to visit a branch. So we just asked them how to process and they told us that it was we could be assured it was the best way to send money online.

Let me now explain you what happened when I received their first transfer: short story, long story, I had lost almost 15% of the amount they intended to send me. How is that even possible? We had been using what we thought was the “best way to send money online” remember? I made some research and realized that we paid a fixed fee that anyone would pay if you using your bank, then we paid a variable one that was a percentage of the amount sent. Finally, we paid what is called “hidden fees”. Most of the time hidden fees can be found in the exchange rate. Indeed a way banks make money out of international transfers is by apply a poorer exchange rate than the real one, clever isn’t it?

What are the best ways to send money online?

I paid 150€ in fees for my first transfer, using supposedly “the best way to send money online” but there was no way I could use my bank again to receive money from my parents. So I started to search for more information about international money transfers and I discovered an entire new world with many more actors than I thought! Not only can you send money online with your bank (which I do not recommend obviously) but you can also use 100% online services such as Transferwise, World Remit. Even Western Union, the old dinosaur of money transfer now has an online version of its services. I started to look for information to make sure, this time, I would find the best way to send money online from France to the UK. I thought it would be easy thanks to Google but there are so many actors offering this possibility that it would have had taken me years to compare them! I did not have time for that as I wanted to avoid using my bank the next month.

After hours spent on Google, I could not find a website that would compare these solutions. I was about to quite my studies and launch myself this business but then, I found one! ALLELUJAH! There it was, I must say I was happy but also sad as I thought I had the best idea ever that would solve exchange students issues.

I used it during the last month of my semester and I love it! I went from paying 15% fees to 2%. I’ll let you do the maths and guess how many rounds of Pimm’s I paid to my friends with that extra cash 😉

How to send money overseas when buying a house

You just travelled in a wonderful country and so you plan to buy a house there to spend the holidays? or you plan to move abroad and so to buy a property abroad? or you need to receive or pay rent in a foreign currency? In all that cases you have to be very careful about how you will convert your money. What is the best way to send money overseas when buying a house? There are two steps to do, or we can say three mistakes to avoid!

 

Track the exchange: best way to send money overseas

This is the first step. Track the exchange rate in order to have a high exchange rate the day you transfer. Indeed currencies value change everyday and currencies exchange rates vary and fluctuate every hour. Some currencies are very volatile. This is particularly the case for the currencies of countries which are either politically or economically unstable (some africans countries) and for the countries in development (south Americans countries for example or Asian countries). And then there are the currencies with a low volatility. These currencies are those of the developed countries and they are the most traded in the world: American dollar, euro, british pound, australian dollar, canadian dollar, singapore dollar, hong-kong dollar, japanese yen, and swiss franc. However if something happens in the country these currencies can move a lot. It is actually the case for GBP which has lost a lot of value against the other currencies since the Brexit in last June.

When you transfer on a regular basis or if you have to transfer a large amount of money even a small fluctuation can make a huge difference in the amount in money received. This is why it is important to transfer a day the exchange rate is good. If you plan to buy a house abroad it means you’ll transfer a big amount of money so you have to really pay attention to the exchange rate.

Avoid your bank

Do you know that in average a bank takes between 4% and 8% of fees on each money transfer? That’s enormous. And that means if you want to convert 150’000 GBP in euros to buy a house in Portugal for example, the bank will take 12’000 GBP in fees! You definitely better to use a broker or a service specialized in money transfers. There are a lot on the market and they take between 1% and 4% of fees on a transfer. It is simple to use your bank but it is a mistake to avoid.

Compare the money transfer services is the best way to send money overseas

Do you know that almost 500 money transfer services exist according to the World Bank? That’s huge. And moreover they all apply their own fees. So it can be very painful and time-consuming to know which one to use and which one is the better. The best is to use a comparison service for international money transfer as it shows all the options for a specific transfer with their rates. It is exactly the same when you compare flights and hotels, you use a comparison platform. So why not for international money transfers?