As an expat or a student living abroad for one semester, you have probably already used money transfer operators to send or receive money, or not. You might have used your bank as well. Let us see which solution is the best.
Why you should use a money transfer operator
It is very easy to use your bank to make an international money transfer. However it is probably the most expensive solution you can find. Indeed you’ll be charged with various kinds of fees: fixed, variable or even hidden one! Banks will charge you around 8 to 10% of the amount transferred. So it means that if you send 100€, you’ll be receiving between 92€ and 90€. Imagine if you’re doing this each month with bigger amounts… It’s a scandal!
One the other hand, using money transfer operators for this kind of operations will make you save money depending on the one you are using.
Which money transfer operator should you use?
Your options here a numerous, according to the World Bank there are more than 500 money transfer operators around the world. None of them is operating worldwide and some are focused on one specific region. You should be careful with traditional ones such as Western Union or Moneygram, which are well implemented in many countries. Why? Because they are outrageously expensive compared to new actors. Just like banks they will charge you around 10% of the amount sent.
They even advertise about this! A couple of years ago I remember seeing a Christmas add from Western Union saying “for only $5 send up to $50”! That’s a 10% fee but imagine you send less than $50… I call this robbery!
There are other marketing slogans that you should be aware of. For example many money transfer operators argue that their service is totally free. Remember that nothing is really free in this world and that money transfer operators are not NGOs, they need to make profits! If their transfers are “free” then how do they make money? They make money on the exchange rate.
Indeed, most of the time they will apply a poor exchange rate compared to the real one. This allows them to make money without (almost) anyone noticing.
To sum up, remember to use money transfer operators instead of your bank next time you are sending money internationally and that there is no such thing as free money transfer.