How to send funds abroad to other people or pay for things

Avoid getting burned by excessive fees and discover the best way to send money to family and to pay for services and things.

First off, if you are looking to send sums of more then a few hundred dollars to yourself or a bank account owned by another business or individual please refer to your international money transfer section of this website – you will find a service or bank meets you needs better here.

This section deals with financial institutions (wikipedia) for sending money to someone else overseas who may not have a bank account or in instances where the amount is less then a few hundred dollars.

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

  1. Paypal and Skrill (review)
  2. Remittance companies like Western Union, Xoom and Remitly

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! PayPal for example has very low and sometime no fees at all.

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 a Remittance Company?

PayPal makes it really easy to send money abroad for services or products and for smaller amounts it may make sense especially if the recipient has a PayPal account.

If the recipient does not have a PayPal account they will need to open one, but once they do payments are very fast, quick and convenient.

PayPal often has free fees for sending money overseas but as explained above the total costs of the transaction often mostly the exchange rate. To PayPals’ credit for larger amounts they themselves warn you that better options exist.

See – How to send money overseas using PayPal

and – PayPal International Fees

Remittance Companies like Western Union, Xoom, Remitly or Skrill are designed to send money in smaller amounts to someone else overseas and if the receiving person does not have a bank account this may be your only alternative.

Be Aware: You should be very sure of who you are sending the money too – many scammers from dating sites use services like these because it is much harder for authorities to catch fraudsters when they pick up your money in cash.

How to send money overseas with Western Union, Moneygram, Xoom, Remitly and Skrill (Moneybookers)