Saving Money When You Send Money Abroad

This guide will teach you how to send money to family or friends overseas affordably, focusing on low transfer fees and competitive currency exchange rates. We’ll cover various methods, from digital remittance platforms to traditional bank transfers, helping you make informed decisions to get the most value for your money. If you’re an expat or have loved ones living abroad, mastering cheap international transfers is essential for managing your finances and supporting them effectively.

Before You Start Your International Money Transfer

To ensure a smooth and cost-effective international money transfer, gather the following before you begin. This guide is designed for beginners, requiring no prior technical expertise, but a basic understanding of online accounts and a willingness to compare options are helpful.

• Time Estimate: Preparation takes about 15-30 minutes. The actual transfer process can take 5 minutes to 2 days, depending on the method chosen.
• Difficulty Level: Beginner.
• Prerequisites:

  • A stable internet connection.
  • A valid email address.
  • Access to a smartphone or computer.
  • Your bank account details (account number, sort code/routing number).
  • Your recipient’s full name and bank account details (including IBAN if sending to Europe).
  • A government-issued ID (like a passport or driver’s license) may be required for verification by some services.

Preparing to Send Money Abroad Cheaply

Before you initiate any transfer, take these crucial preparation steps to ensure efficiency and security.

Step 1: Research and Compare Services

Why this matters: This is the most critical step for sending money abroad cheaply. Different remittance services and banks offer vastly different fees and currency exchange rates. Comparing options ensures you get the best deal, saving you significant money over time.

Action: Open your web browser and search for “best international money transfer services” or “cheap international transfers.” Look for reputable digital remittance platforms and compare their advertised fees and exchange rates for your specific destination country. Pay attention to both the upfront transfer fee and the margin added to the mid-market currency exchange rate. Services like Wise (formerly TransferWise), Remitly, WorldRemit, and Revolut are popular choices.

This research can take 10-20 minutes, but it’s time well spent.

Step 2: Gather Recipient Information

Why this matters: Inaccurate recipient details are the most common cause of transfer delays or even lost funds. Double-checking ensures your money reaches the correct person swiftly.

Action: Confirm the recipient’s full legal name, their complete address, and their bank account details. For many countries, you’ll need their bank name and address, account number, and a SWIFT/BIC code or IBAN (International Bank Account Number) for European countries. Some services may also require a mobile number for notifications.

Step 3: Choose Your Transfer Method

Why this matters: The method you choose impacts speed, cost, and convenience. Digital platforms are often the cheapest and fastest, while traditional bank transfers can be more expensive but sometimes more familiar.

Action: Based on your research in Step 1, select the service that offers the best combination of low transfer fees and favorable currency exchange rates for your needs. For this guide, we will focus on using a popular digital remittance platform.

Step 4: Create an Account with Your Chosen Service

Why this matters: You need an account with the service to initiate any transfer. Creating an account allows the service to verify your identity and securely process your transactions.

Action: Go to the website or download the mobile app of your chosen remittance service (e.g., Wise, Remitly). Click on “Sign Up” or “Create Account.” Follow the on-screen prompts to enter your email address, create a password, and provide your personal details. You will likely need to verify your email address by clicking a link sent to your inbox.

This step typically takes 5-10 minutes.

Step 5: Verify Your Identity

Why this matters: To comply with financial regulations and prevent fraud, most money transfer services require users to verify their identity, especially for larger amounts or when sending abroad for the first time. This also adds a layer of security to your account.

Action: Once your account is created, you’ll usually be prompted to complete identity verification. This often involves uploading a clear photo of a government-issued ID (passport, driver’s license, national ID card) and possibly a selfie holding your ID. Follow the specific instructions provided by the service. Some services may allow you to proceed with smaller amounts before full verification, but verification is usually required for full functionality and higher limits.

Identity verification can take anywhere from a few minutes to 24 hours, depending on the service and how busy they are.

Step-by-Step Instructions for Sending Money Abroad

These steps will guide you through the process of sending money using a typical digital remittance platform. The interface may vary slightly between services, but the core process is similar.

Section A: Setting Up Your Transfer

1. Step 1: Log In to Your Account

   Why this matters: Accessing your secure account ensures your personal and financial information is protected.

   Action: Go to the website or open the mobile app of your chosen remittance service. Enter your registered email address and password, then click “Log In.”

2. Step 2: Initiate a New Transfer

   Why this matters: This starts the process of defining who you’re sending money to and how much.

   Action: Look for a button or link that says “Send Money,” “Transfer,” or “New Transfer.” Click on it.

3. Step 3: Select Destination Country and Amount

   Why this matters: This tells the service where the money is going and how much you intend to send, allowing it to calculate fees and exchange rates accurately.

   Action: Choose the country you are sending money to from the dropdown menu. Then, enter the amount you wish to send. You can usually choose to enter the amount in your local currency or the recipient’s currency. The service will immediately show you the estimated exchange rate and the total cost, including fees.

   Example: You might see “Send 100 EUR” and the service will show “You pay 95 GBP” with a breakdown of fees and the exchange rate applied.

4. Step 4: Select Recipient Option

   Why this matters: This determines how your recipient will receive the funds, affecting the speed and convenience of the transfer.

   Action: You’ll be asked how the recipient should receive the money. Common options include:

   • Bank Deposit (directly into their bank account)
   • Cash Pickup (at a local agent location)
   • Mobile Wallet (e.g., M-Pesa, GCash)

   Select the option that best suits your recipient’s needs.

Section B: Adding Recipient Details and Payment

5. Step 5: Add Recipient Details

   Why this matters: This is where you enter the specific information for the person or account receiving the money. Accuracy is paramount here.

   Action: If you’re sending to a new recipient, you’ll need to enter their details. This will include their full name (as it appears on their ID or bank account), their address, and any specific banking information required for the chosen payout method (e.g., bank name, account number, SWIFT/BIC, IBAN, mobile wallet number). If you’ve sent to this person before, you can often select them from a list of saved recipients.

6. Step 6: Review Transfer Details

   Why this matters: This is your last chance to catch any errors before committing to the payment. Carefully checking ensures everything is correct.

   Action: The service will present a summary of your transfer: the amount being sent, the exchange rate applied, the transfer fee, the total amount you will pay, and the estimated delivery time. Verify all details, especially the recipient’s information and the final amount due.

7. Step 7: Choose Your Payment Method

   Why this matters: Different payment methods might have different associated fees or processing times.

   Action: Select how you want to pay for the transfer. Common options include:

   • Bank Transfer (ACH or SEPA)
   • Debit Card
   • Credit Card (sometimes incurs higher fees)

   Choose the option that is most convenient and cost-effective for you. For example, bank transfers are often cheaper but may take longer than card payments.

8. Step 8: Make the Payment

   Why this matters: This action finalizes the transaction and initiates the money movement.

   Action: Follow the prompts to complete your payment. If you chose bank transfer, you’ll receive instructions on how to send the funds from your bank account. If you’re paying by card, you’ll enter your card details securely on the service’s payment page. Once payment is confirmed, you’ll receive a confirmation message, and usually an email, with your transaction details and a tracking number.

Section C: Tracking and Confirmation

9. Step 9: Track Your Transfer

   Why this matters: Tracking provides peace of mind and allows you to monitor the progress of your funds.

   Action: Most services offer a way to track your transfer online or via their app. Use the transaction reference number provided to check the status. You’ll often receive email or SMS notifications at key stages, such as when the money has been sent, received by the recipient’s bank, or picked up.

10. Step 10: Confirm Delivery with Recipient

    Why this matters: While tracking is helpful, direct confirmation from the recipient is the surest way to know the transfer was successful and that they received the correct amount.

    Action: Once the transfer is marked as delivered or completed, contact your recipient to confirm they have received the funds. This also provides an opportunity to ensure the process was smooth from their end.

Common Mistakes and How to Avoid Them

Even with clear instructions, missteps can happen. Here’s how to steer clear of common pitfalls when sending money abroad cheaply.

• Mistake: Incorrect Recipient Details.

  Consequence: Delays, extra fees for correction, or the money being sent to the wrong person, potentially making it difficult to recover.

  How to Avoid: Triple-check all names, account numbers, and bank codes before confirming the transfer. Ask your recipient to verify their details with you.

• Mistake: Not Comparing Exchange Rates and Fees.

  Consequence: You end up paying more than necessary for the same service, significantly reducing the amount your recipient receives.

  How to Avoid: Always use comparison websites or check at least two different remittance services before sending. Understand the difference between the mid-market rate and the rate offered to you.

• Mistake: Using a Credit Card for Payment Without Checking Fees.

  Consequence: Your credit card company may treat this as a cash advance, incurring high interest rates and fees, on top of any fees from the remittance service.

  How to Avoid: Opt for debit card or bank transfer if possible. If using a credit card, check with your card issuer and the remittance service about potential extra charges.

• Mistake: Ignoring Transfer Limits.

  Consequence: Your transfer might be delayed or rejected if you exceed the service’s daily, weekly, or monthly transfer limits.

  How to Avoid: Be aware of the transfer limits for your account type and the specific service. If you need to send a large sum, you may need to verify your identity more thoroughly or use a service with higher limits.

• Mistake: Not Factoring in Delivery Times.

  Consequence: The recipient may not have the funds when they need them, causing inconvenience or problems.

  How to Avoid: Always check the estimated delivery time and send money well in advance of any important dates or deadlines.

Tips, Tricks, and Optimization for International Transfers

Make your money go further and your transfers smoother with these advanced strategies.

• Use Real-Time Exchange Rate Trackers: Many services offer alerts when a target exchange rate is met. This can be a great way to maximize your transfer value if you don’t need to send money immediately.
• Consider a Multi-Currency Account: Services like Wise or Revolut offer multi-currency accounts where you can hold balances in different currencies. This can be beneficial if you frequently send or receive money in specific currencies, as you can exchange money when rates are favorable without incurring transfer fees for each transaction.
• Look for Fee-Free Promotions: New users or specific payment methods sometimes come with introductory offers, like the first transfer being fee-free. Keep an eye out for these deals.
• Understand the “Mid-Market Rate”: This is the “real” exchange rate, halfway between the buying and selling rates on global currency markets. Services that offer rates close to this, plus a transparent fee, are usually the cheapest.
• Leverage Mobile Apps: Most digital remittance platforms have user-friendly mobile apps that allow you to manage transfers, track payments, and often initiate new transfers quickly and easily on the go.
• Set Up Recurring Transfers: If you send regular amounts to family, setting up recurring transfers ensures you don’t forget and can often lock in exchange rates.

Variations and Alternative Approaches to Sending Money

While digital remittance platforms are often the cheapest, other methods exist, each with its own pros and cons.

• Traditional Bank Transfers (Wire Transfers):

  Pros: Widely available, perceived as secure by some, good for very large amounts.

  Cons: Often the most expensive due to high fixed fees and less competitive exchange rates. Slower than digital options.

  When to Use: If you have no other option, are sending extremely large sums and your bank offers a competitive rate (rare), or if your recipient’s bank specifically requires it.

• Money Transfer Operators (e.g., Western Union, MoneyGram):

  Pros: Extensive global network of physical locations, useful for cash pickup where bank accounts are less common, can be fast.

  Cons: Fees and exchange rates are often less favorable than digital services, especially for larger amounts.

  When to Use: When the recipient needs cash immediately and doesn’t have a bank account, or in emergencies where speed and accessibility are paramount over cost savings.

• PayPal/Xoom:

  Pros: Convenient if both sender and receiver have PayPal accounts, Xoom (a PayPal service) offers international transfers.

  Cons: Fees and exchange rates can be less competitive than dedicated remittance services. Currency conversion fees can be high.

  When to Use: For smaller amounts, or if both parties are already comfortable using these platforms and the cost is acceptable for the convenience.

For most users looking to send money abroad cheaply, digital remittance platforms like Wise, Remitly, or WorldRemit will provide the best combination of low fees, good exchange rates, and efficiency. Bank transfers are generally the most expensive option.

Troubleshooting Common Issues

Here’s how to handle issues that might crop up during your international money transfer.

• Issue: Transfer is Delayed Beyond Estimated Time.

  Solution: First, check the tracking status on the service’s website or app. If it hasn’t updated or shows an issue, contact the remittance service’s customer support. Provide your transaction reference number. Delays can occur due to public holidays in either country, additional verification requirements, or issues with the recipient’s bank.

• Issue: Recipient Didn’t Receive Funds.

  Solution: Confirm with the recipient that they have checked all their relevant accounts and that the details you provided were correct. If the tracking shows the money was sent and delivered, and the recipient still can’t find it, they may need to contact their own bank. If the transfer was returned, the service will usually notify you, and you can try again with corrected details.

• Issue: Account Frozen or Transfer Rejected After Identity Verification.

  Solution: This is usually due to regulatory checks. Contact the remittance service’s support team immediately to understand the reason and provide any requested documentation. Sometimes, providing proof of funds or the purpose of the transfer is necessary.

• Issue: Unexpected Fees or Charges.

  Solution: Review your initial transfer summary and the final statement. If you see charges you weren’t expecting, contact customer support. Ensure you understand the fee structure, including any potential intermediary bank fees that a traditional bank transfer might incur, which remittance services typically avoid.

• Issue: Can’t Log In to Your Account.

  Solution: Double-check your username and password. Use the “Forgot Password” or “Forgot Username” link on the login page. If you continue to have trouble, contact the service’s customer support for account recovery assistance. Ensure your device meets any software requirements for the app or website.

If you encounter a persistent or complex issue that you cannot resolve with the service provider’s customer support, consider seeking advice from a financial advisor or consumer protection agency.

Next Steps and Building on This Skill

Once you’ve successfully sent money abroad cheaply, you’ve mastered a valuable financial skill. Here’s how to continue improving.

• Automate Regular Transfers: For ongoing financial support, set up recurring transfers through your chosen platform. This ensures consistent remittance without manual intervention.
• Explore Advanced Features: Many platforms offer business accounts, debit cards linked to multi-currency balances, or even investment options. Investigate these if they align with your financial needs.
• Stay Updated on Exchange Rates: Follow financial news or use apps that track currency fluctuations to understand market trends and potentially time your transfers for optimal value.
• Learn About Tax Implications: Depending on your country and the amounts sent, there might be tax implications for remittances. Consult a tax professional if you’re unsure.
• Compare New Services: The financial technology landscape changes rapidly. Periodically re-evaluate your chosen service against new entrants to ensure you’re still getting the best deal for your international money transfer needs.

Frequently Asked Questions

How long does it take to send money abroad cheaply?

Delivery times vary by service and destination, typically ranging from a few minutes for instant transfers to 1-3 business days for bank deposits. Always check the estimated delivery time before confirming your transfer.

What is the cheapest way to send money internationally?

Generally, digital remittance platforms like Wise, Remitly, or WorldRemit offer the cheapest international transfers due to their lower fees and competitive currency exchange rates compared to traditional bank wire transfers.

Can I send money abroad using my phone?

Yes, most modern remittance services have user-friendly mobile apps available for both iOS and Android devices, allowing you to send money abroad cheaply right from your smartphone.

What happens if I enter the wrong bank details when sending money?

If the details are incorrect, the transfer may be delayed, returned, or sent to the wrong recipient. Contact the remittance service immediately to correct the information or initiate a recall, though this can incur additional fees and isn’t always possible.

Are digital remittance platforms safe for sending money overseas?

Reputable digital remittance platforms are generally very safe. They are regulated financial institutions that use advanced security measures to protect your money and personal data. Always use well-known services and ensure you are on their official website or app.

How do I get the best currency exchange rate?

To get the best currency exchange rate, compare rates across multiple services and look for providers that offer rates close to the mid-market rate, plus a clear, transparent fee for the transfer.