How to Send Money Overseas

Avoid getting burned by excessive fees and discover the best way to send money to family and friends

First off, if you are looking to send money bank to bank check out our international money transfer section of this website – you will find a service which will likely save you a load of money and be far more enjoyable to use compared to a bank.

Many options exist to send money overseas and they can be categorised in three groups;

  1. Payment Companies like PayPal
  2. Old school remittance companies like Western Union, Ria and Moneygram
  3. New School remittance companies like InstaREM, WorldRemit and Remitly

There are some key differences between these three groups!

PayPal is mainly an online payment service that allows you to transfer money between accounts or pay for things. Although it does offer international money transfers, it is not its main business.

Importantly: PayPal’s fees can be higher than those of other options, but it is convenient although many people discount the fact that it is PayPal to PayPal transactions they are doing and their can be further costs to move the money to where you need it.

Old school remittance companies like Western Union, Ria, and Moneygram have been around for decades and have worldwide agents and physical locations. This can be awesome for sending and receiving cash. And while they are generally trustworthy they also tend to charge high fees.

New school remittance companies like InstaREM, WorldRemit, and Remitly operate more efiiciently online, making it easy for users to send and receive money.

These companies often have extremely fast transfers and lower fees than traditional remittance companies. Generally though the sender cannot send cash although the receiver usually has many options including cash, mobile top ups and other ways.

Total Costs

Paypal and remittance companies cover the costs of their services through Fees and Exchange Rates.

Fees – Usually quoted as a fixed amount and sometimes you will see “fee free” too!

Exchange Rates – This is just the rate they offer you. The important part you need to know that most of the total costs you pay to send money overseas is tied up in the exchange rate offered.

For example, if you had to send $100 USD to the UK, the exchange rate they offer you might be £55 British pounds. However they can get a rate of £60. This difference of £5 is part of your costs. In other words, you give them $100 – with your $100 they buy £60, they keep £5 and give you £55.

Total Costs = Fees + Exchange Rate 

Often total cost can often be up to 10% for amounts less then $100. If you are doing this once a month or once a week you can see you how your costs quickly add up.

For example, if you sent $100 every week – that would be $5200 in one year. It is common to pay 10% or $520 in total costs. On the other hand, if you could save up the $5200 and send this every year using a money transfer service the total costs would be about $80. Saving you $440.

So why would you use PayPal or an Old School Remittance Company?

There are some good reasons why someone might choose to use PayPal or an old school remittance company like Western Union, Ria, or Moneygram.

Generally convenience and trust.

PayPal offers a simple and easy-to-use platform and many people have a PayPal account.

Meanwhile old school remittance companies are often preferred by people who need to send or receive cash, especially where friends and family may not have a bank account.

Alternatives – New School Remitters

New school remittance companies like InstaREM, WorldRemit, and Remitly offer some big advantages over traditional remittance companies.

  • Lower fees
  • Transparent fees
  • Faster transfers.

New school remittance companies also offer more flexible payment options – like mobile top-ups, cash, banks and even home delivery

That being said, you should still consider the exchange rate, the total fees and the amount that actually arrives!

Happy Money!