Online money transfer services are becoming increasingly popular among everyday users. The failure of banks to provide cost-effective solutions for global money transfers has given rise to a burgeoning secondary industry of FinTech money transfer companies. For years, the entrenched financial institutions of the world – big banks – dominated the scene. However, banks are interested in maximizing profitability rather than providing value-added services at cost-effective prices to customers.
Forex is a classic case in point. When customers purchase foreign currency from banks, or transfer money abroad, there are significant fees involved. These include a combination of fixed fees (incoming and outgoing wire transfer fees), hidden fees, commissions, and sub-optimal forex rates.
There are many problems with international money transfers through banks, notably the unfavorable exchange rates that are levied on clients. The spread (the difference between the price at which banks sell forex and the price at which they buy forex) is expensive. Online money transfer companies are popping up all over the place to make it easier for customers to send funds quickly and easily at minimal cost.
Over the years, several online money transfer services have come into the reckoning. These include TransferWise, Moneycorp, CurrenciesDirect, and OFX. Among the many benefits of utilizing these types of companies are user-friendly platforms, global companies with low minimum transfer amounts and competitive rates on all transfer amounts. Since there are no flat wire fees and rates are easily seen via the online platform, these are examples of the best online money transfers companies in the world.
Benefits of Using Self-Service Money Transfer Options
While banks offer self-service features, it’s the spread, hidden fees, and commissions that are unfavorable to clients. For the most part, licensed, regulated and reputable money transfer services do not pose any risk to the user, and these services are just as easy-to-use as buying products through Amazon and eBay.
Several prominent global money transfer service companies have been established in recent years. TransferWise is one of the most high-profile global money transfer service companies. What’s equally impressive is that the services provided by this company are all available online. Several benefits available through these FinTech enterprises include quicker transactions processing than telephone, instant comparison of money transfer service rates versus interbank rates, and an easy-to-follow money transfer service.
Of course, the benefits of these services are not without risks. For starters, there is no personalized assistance with online money transfers and there’s no negotiation on forex rates. Additionally, not all services are legitimate and simply masquerade as such.
Characteristics of Leading Money Transfer Companies
Sometimes, especially when large transfer amounts are involved, users prefer to conduct transactions via telephone to ensure that the correct amount is transferred or received. Online transactions processing services require the customer to input the amount of forex to be received or sent, and to confirm that before initiating the forex transfer.
To avoid any mishaps and misunderstandings, it’s always good to work with a reputable online money transfer service company. These authorized payments institutions and e-money providers typically maintain separate accounts known as segregated accounts for client funds and business accounts. This serves as a safety net for customers in the event of bankruptcy or other proceedings.
The bottom line is that transfers greater than £5000 or USD equivalent should be conducted via email, telephone, or in person. When large Forex transfers are conducted, there is often a lot of wiggle room that customers can negotiate.
Money transfer service companies will happily work with customers to process larger transactions, and for this reason it is better to seek out telephone assistance, email assistance, or in-person meetings. Any international money transfers less than £5,000 are best completed by an online money transfer service company – not a bank or financial institution.
The rapid processing times of these money transfers (typically less than three minutes) is a big feather in the cap. Clients are best served by seeking out online money transfer service companies rather than banks and established financial companies (a.k.a. entrenched institutions) for greater efficiency, cost effectiveness, and ease-of-use.
It’s possible to easily process online money transfers via smartphone, and tablet. Various money transfer apps are now available for Android and iOS devices, to expedite global money transfers at cut-rate prices.
Jeff Broth is a business writer, mentor, and personal finance advisor. He has been consulting for SMB owners and entrepreneurs for the past seven years.