Do you need to transfer money internationally? In the past, you’d have to mail a cheque to your recipient. You’d have to wait weeks before your cheque arrived at its destination – or before you realised it got lost in the mail, in which case you’d have to do it all over again.

Fortunately, the dawn of electronic fund transfers eliminated the need to physically mail cheques out (and the nail-biting waiting period that accompanied it). Now, all you need to do is go to your bank or a money transfer provider or use your online money transfer app to send money halfway across the world. Moreover, like magic, the money can reach your recipient not in weeks, but instantaneously.

The following are the two most popular methods of sending money internationally.

1. Bank Transfer

A bank transfer is ultimately what it says it is. One bank sends money, while another bank receives it.

Technically, however, it is more complex than one bank sending funds to another bank. International bank-to-bank transfers typically take place via the Society for Worldwide Interbank Financial Telecommunication (SWIFT). This is a secure messaging network of banks and financial institutions.

After you request an international bank transfer, your bank sends a message through the SWIFT network. This message contains a payment order directed to the recipient bank. The recipient bank honours the payment request after security, fraud, and legitimacy checks. Taking money from its reserves, it credits the receiver’s account with the amount indicated in the payment order.

Therefore, bank-to-bank transfers via a wire network like SWIFT do not involve fund transfers but an electronic relay of payment orders. The originating bank sends the money later in a bank-to-bank transaction after the recipient has received their money.

Fees and Charges

Wire transfers are known for their high fees, which vary widely between banks. The originating bank can charge the sender, while the receiving bank can charge the recipient. Additionally, exchange rates need careful consideration as banks often add a markup to the market rate, affecting the total cost of the transaction and the net amount the recipient receives.

Timeframe

Bank-to-bank transfers via SWIFT can be processed within minutes – say, five to 30 minutes. However, it can take between two and five business days for the recipient to get the money in their account. The transaction speed depends on the specific banks and the countries involved.

2. Remittance

Remittance companies facilitate money transfers for clients outside of the banking system. They make it convenient for anyone to send and receive money internationally because the sender or the receiver does not need a bank account. If the recipient has a bank account, however, remittance companies may offer direct bank deposit as an option, too.

Fees and Charges

Remittance companies typically charge higher fees than banks. However, they may offer more favourable exchange rates, too.

Timeframe

Remittance companies can make funds available to recipients within seconds or minutes. This is what makes it an excellent option when speed is crucial.

3. Online Money Transfer Apps

Online money transfer apps are from financial technology companies that make remittance conveniently available to everyone with a smartphone and an internet connection. They’re essentially digital remittance companies.

Fees and Charges

Online money transfer fees can be higher than the cost of other options. However, the convenience makes up for it.

Timeframe

Online money transfers almost always take place instantaneously.

The Advantages of Online Money Transfer Apps

The following are the benefits of using online money transfer apps:

  • Speed: Online money transfers happen instantaneously. Send it, and it becomes available to your recipient almost instantly.
  • Convenience: You can do everything on a mobile app. After becoming a verified user, you can process online money transfers anytime you want and need to.
  • Multiple Funding Sources: Online money transfer apps orchestrate and link various financial services. Therefore, you can pay for your transfer using your debit card, credit card, or money from your mobile money or bank account.
  • Multiple Transfer Options: Money transfer apps also allow numerous transfer options. Your recipient can get their funds as mobile money, receive them in their bank account, or pick them up from the online money transfer app’s local partner bank or agent.

International Money Transfers

Gone are the days when it took weeks to receive international money transfers. Money transfer for business or for family now takes only from seconds to a few days when you transfer money internationally via banks, remittance companies and online money transfer apps.

When you need to send money overseas, all you need to do is choose your method according to your needs and preferences. Are you sending money to buy property in the Caribbean? Because of the amount involved, a bank transfer may be the more appropriate option. Are you sending money to your family overseas for their bills and daily expenses? You and your recipient will probably appreciate and prefer the convenience of an online money transfer.