The International Money Transfer Industry has probably changed more in the past decade than at any time in its history.
Moving money abroad has traditionally been an expensive process with few options available to sender or recipient.
Senders could physically transport the money themselves, making sure that they stayed within the limits specified from country to country, and paying import / export taxes; use a system such as “Harwala”, which is done via word of mouth, using passwords communicated from sender to receiver and a network of local agents; or in recent years, use a bank or money transfer agency such as Western Union or Ria.
visit The Money Cloud to compare the best deals on international money transfer including many of the agencies discussed below.
Fees to high and spreads too wide!
All of these methods resulted in a large chunk of the money transferred being taken as a fee – usually more than 10% of the entire transaction – with uncompetitive exchange rates offered – not the interbank rate that most financial institutions take advantage of every day which uses a much tighter spread of prices and offers far better value for money.
Let’s just think about that – 10% of the total transaction taken! In earlier times the fee was perhaps justified because of the work involved; agencies would have had a tougher time guaranteeing security, for example, or physically transporting the money.
But today banks and money transfer agencies exist in a world that has become technologically advanced meaning that money can be transferred digitally, in seconds flat, with very little effort involved.
Faster, cheaper and better services today!
The expenses incurred by money transfer platforms today involve the setting up and running of these digital platforms, monitoring transactions and guaranteeing security.
In the case of banks and wire transfer services, who have large legacy systems in place that will take time to replace, money transfer remains a complex process that requires time and money to operate. But in the case of the so called “disruptive” tech platforms, who leverage the latest digital technologies, such as the blockchain or peer-to-peer matching, money transfer services are less costly to implement and operate.
So, with that in mind, we present our list of 10 of the best money transfer platforms in existence today, to try to provide a clear picture of the current state of money transfer, and the choices available to today’s customers.
TransferWise was founded by 2 Estonians living in London who were frustrated at losing so much in fees and uncompetitive exchange rates whenever they had to transfer money home.
The two built a peer-to-peer matching service that allowed customers to exchange money directly, bypassing the banks and therefore free from their onerous charging structures.
TransferWise is a digital only product; by 2016 the platform was transferring more than £1 billion of transactions every month for more than one million customers. The company offers deals on more than 40 currencies and is currently experiencing growth of around 150% per annum.
TransferWise became profitable for the first time in 2017, generating approximately £100 million in revenues. The company employs more than 120 people in London out of a global staff of 700, but both founders have been vocal on the subject of Brexit and say they cannot guarantee that they will not locate the business elsewhere in Europe in the near future.
Verdict: 6-year-old TransferWise is the most successful of the modern breed of money transfer companies – already claiming more than 10% of the U.K. money transfer industry, and its peer-to-peer service is technically and economically superior compared to more traditional ways of transferring money overseas. It’s by no means the only option, however, and when transferring very large amounts, there may be better deals to be had by using a more specialised, personalised service.
2. World Remit
World Remit, like TransferWise, was founded in London, and describes itself as “a convenient, low-cost alternative to traditional money transfer companies that use high street agents and charge high fees.”
The service is available for senders in more than 50 countries, who can transfer money to be collected either as a bank deposit, cash pick-up, direct to a mobile or as a means of mobile top up.
World Remit sees mobile money as the future of finance and money transfer and the company are dedicated to removing the costly obstacles that currently separate a sender’s money with its intended recipient.
WorldRemit was founded by Ismail Ahmed, who began working with remittance agencies and international monetary policy makers before founding his own money transfer company. World Remit customers are now sending nearly 700,000 transfers per month to more than 140 destinations.
The startup is also backed by some notable venture capital firms, such as Accel Partners, who were amongst the first backers of Facebook. The company have partnerships in place with the likes of Huawei mobile in Africa, and is also partnering with Android Pay.
Verdict: another good, low cost alternative to using banks or wire transfer agencies, World Remit has experienced impressive growth since being founded in 2011 and is a safe, reliable and convenient way to send money, with a mobile focus.
Azimo completes thousands of international money transfers every day, is fully authorised by the Financial Conduct Authority and uses hand-picked banks and payment providers to try to deliver an optimal service for its customers.
The company claims to have the largest pay-out network in the industry, with 300,000 cash collection points, as well as mobile wallets and bank accounts.
Transactions usually take no more than a few hours, the company says; senders can transfer to 195 countries worldwide.
Azimo allows users to send money using just the recipients phone number, bypassing hard to locate and remember Swift codes or bank IBAN numbers, plus Azimo offers entirely fee free money transfers.
Like TransferWise and WorldRemit, Azimo is an entirely digital service that is focused on mobile transactions. As founder Michael Kent explains: “We feel very strongly about the importance of an innovative, fast and cheap service for our customers. Finance has been truly digital, now it’s truly mobile.”
Verdict: Over the past couple of years Azimo has provided some truly innovative services and seems determined to drive down fees almost to the point of non-existence. Another good bet and worth keeping an eye on for special deals that can make a big difference to customers, even amongst low-fee disruptive tech firms.
MoneyGram is not one of the new breed of money transfer service providers, having been founded in 1940, but the company enjoys a good reputation as an innovative and inexpensive provider of money transfer services.
MoneyGram is the second largest money transfer agency in the world, generating $1.45 billion in annual revenues, and offering its services at 350,000+ agent locations around the world in more than 200 countries.
MoneyGram may not be the most innovative company operating within the $600bn money transfer industry but it has moved with the times and offers a range of digital services as well as its significant physical presence.
Intriguingly, MoneyGram has agreed to a merger with Ant Financial, a subsidiary of Chinese online retail giant Alibaba, and one of the most influential payments companies in the Asia region. In a statement, MoneyGram said that “The transaction with Ant Financial will enable MoneyGram to accelerate and expand its suite of global hybrid solutions while maintaining strong security and privacy protections for our customers.
MoneyGram was the subject of a bidding war between Ant Financial and Euronet, another major payments firm, with the Chinese company eventually winning out.
Verdict: the merger with Ant Financial will mean that MoneyGram continues to be a major player in the international payments market, whilst benefitting from Ant Financial’s disruptive services combined with a vast network across Asia, where mobile payments are truly taking off.
MoneyGram should be part of the conversation every time you are thinking about sending money overseas, but remember, big does not always mean best; for example, rigid pricing structures mean the best bargains may be found elsewhere
5. Currencies Direct
“Currency is as much about people, as about numbers”, say Currencies Direct. Rather than a money transfer service, Currencies Direct is more of an FX specialist and is therefore a better option if you are looking to transfer significant amounts of money overseas. Buying a house abroad, for example, or making regular mortgage or tuition fee payments, or doing business overseas.”
Unlike a tech platform, at Currencies Direct customers deal with real people; brokers who understand the FX markets and are able to execute specific trades on your behalf, watching the markets and giving advice about when and how to move money, potentially saving you a great deal of money.
Since it was founded in 1996, Currencies Direct has worked with 150,000 corporate and personal clients processing an estimated $4.5 billion in currency payments each year.
Verdict: a specialist FX broker might be just what you need if you are looking to move large amounts overseas, or want to study the FX markets in more depth with the help of a dedicated advisor, or if you are business looking for the best deals on a regular basis. Currencies Direct also offers a more straightforward, automated money transfer service.
In many ways, although a digital platform can be quick, easy, efficient and cheap, a broker has the edge thanks to their ability to interpret the markets and offer personalised advice and better rates, although they may levy a slightly larger fee.
MoneyCorp is another specialist forex broker that also offers a more straightforward digital money transfer platform.
The company has been established for more than 30 years and deals with millions of customers every year, across more than 100 currencies via a network of offices across Europe and the US.
MoneyCorp helps private customers and businesses with their international payments, offering phone support from brokers dedicated to discovering the most competitive exchange rates, or an online service that hold customer funds in segregated accounts at all times.
Over the past year the company has made than £13 billion pounds’ worth of international transfers to more than 100 countries. The company has branches across the UK and offers specialist services such as reserve and collect, and the MoneyCorp Explorer card, that allows users to buy and store different currencies at competitive rates – a convenient solution for regular travellers.
The company also offers specialist services for customers looking to emigrate, buy property overseas or set up regular payments overseas, as well as currency hedging and forward contracts.
Verdict: for business or private customers who want to explore all the possibilities when sending or using money overseas, or businesses that require a dedicated, knowledgeable service, MoneyCorp represents a potentially wise option. A good mid-range company, some of Money Corps products could be improved upon, but doubtless the company are working on it.
7. Western Union
We really can’t talk about Money Transfer services without taking a closer look at Western Union, the world’s largest money transfer service worldwide.
For a much-maligned company Western Union remains a popular choice with many people – largely because until recently it was the only option many people had. The company is attempting to move with the times, setting up a mobile payments division in 2007 in partnership with GSM, and introducing Western Union connect in 2015, which established partnerships with instant messaging services WeChat and Viber.
That said, Western Union’s fees are its least appealing feature, along with the physical nature of its transaction services that require the sender and recipient to visit an agency in order to redeem the cash using a 10-digit Money Transfer Control Number. Even then, the customer may receive a cheque in lieu of cash – causing further delays before the money can be accessed.
Verdict: convenience of physical location aside there are few reasons to use Western Union. The only thing that might wake the firm, which also has a poor reputation for its anti-money laundering checks, up, would be if it began to its share of the market. You best bet is to use a more agile, modern service.
8. PayPal / Venmo
PayPal was founded by a who’s who of the tech industry – helping cement the reputations of men like Elon Musk, Peter Thiel and others.
PayPal is highly convenient, fast, used by billions of people, internationally recognised but in terms of fees it is not especially competitive – they tend to be quite high.
PayPal tends to be seen as a business payments tool, and it can be a great way for e.g. freelancers and digital nomads to invoice and receive money from their clients whilst travelling. PayPal provides a range of handy tools such as invoicing and tax calculators to make freelancers lives easier, but money is money, and therefore there is no reason not to see PayPal as a means of sending money to a friend overseas or to pay for a service, holiday, or even make regular payments overseas.
Verdict: functionally, PayPal is a good option for transferring money overseas and it is globally recognised and accepted, but when it comes to fees, competitive exchange rates, a personalised service or simply a site dedicated to the art of international money transfer, you may be better off looking elsewhere.
Venmo, for example, which is owned by PayPal, provides all of these services and processed $1 billion of payments in a single month for the first time in January 2017.
9. Circle Pay
Circle Pay is a Goldman Sachs backed, blockchain based money transfer service that announced itself to the world by declaring that its aim was to make all money transfers fee-free.
A so-called “social payments app”, Circle enables users to transfer money across social media, including Facebook and WhatApp, incorporating payments into messages and even including emojis!
Jeremy Alllaire, Circle’s founder, says “we wanted to weave money into ways we already use the internet. Cloud, AI, blockchain and other technologies can make payments instant, free and fun.
Circle began life as a bitcoin wallet before pivoting into money transfer; the bitcoin wallets can be used to make international money transfers, without incurring any fees whatsoever.
It’s a bold strategy and one that Barclays has decided to back – the bank recently announced that it would partner with Circle in the UK. The company has also secured an e-money issuer license in the UK – the first blockchain tech firm to be granted the privilege.
Verdict: Circle could be the future of social payments, and if blockchain technology continues to progress as it has done in the past couple of years, the service could become a leader in the international transfer field, not just for smaller, but all types of international payments.
10. The Money Cloud
Wouldn’t it be great if there were some way to compare all money transfer services to quickly discover the rate, the cheapest fees, the fastest delivery times and learn about the agencies providing the deals?
Well, there is! The Money Cloud was founded to provide exactly this service, by Emmanuel Addy and Huw Jenkins, 2 industry veterans who also started life working for international governments trying to educate people about the best options available to them when sending money abroad.
Using the Money Cloud, it’s easy to input how much you want to send and where you want to send it, and the company’s unique comparison engine does the rest. The simply pick the deal that’s right for you!
Money transfer does not have to be a complex process – even when you are dealing with large sums and want to manage your currency exposure.
Verdict – a no brainer. In order to find the best deals out there in the market, you will have to do a little research, and The Money Cloud is the perfect place to start your search. Money Transfer comparison is becoming the way that most people go about sending money overseas, just as price comparison sites are generally where people begin their search for car insurance deals, credit cards, and most other financial products.
The international money transfer industry has finally caught up with the rest, which plays right into the hands of the consumer.