Deciding what method to use for sending money home is not easy. Here are some pros and cons to consider:
Credit union and bank transfers
Many U.S. credit unions and banks offer money wiring services.
Pros: Sending money through a credit union or bank is secure and reliable, and is often more convenient than other services because people don’t need to create entirely new accounts elsewhere.
Cons: Credit unions and banks usually charge a base fee to send money internationally. Also, the recipient’s credit union or bank may charge a transfer fee. And if the money is converted into another currency, the recipient may receive a different amount than the sender intended, based on changing exchange rates. Some institutions allow money to be sent abroad through their website or mobile app, but others require the sender to visit the branch, which means the transfer must be done during business hours.
Traditional wiring services
Western Union and MoneyGram have been the go-to options for sending money internationally for a long time.
Pros: Western Union has over 500,000 locations in more than 200 countries and MoneyGram has over 350,000 locations in more than 200 countries. With both, people can send money from websites, apps, or physical locations. Senders can use credit or debit cards, or even cash. Recipients can collect the money either through direct deposit into their account, on a prepaid debit card, or in cash. The recipient can get the money within minutes, if necessary.
Cons: The fees to send money through Western Union or MoneyGram depend on how the money is sent, how quickly it needs to be transferred, and where the recipient is located. Cash pick-up is an option only during a branch’s business hours. In addition to paying fees, those using Western Union or MoneyGram will have to consider currency exchange rates.
Online transfer providers
Online options like Xoom, Wise, and OFX are growing in popularity because they are convenient and often have lower fees.
Pros: Because online transfer providers act as a third party in a transaction, the sender is often charged no fee, or very low transfer fees and exchange rates. The sender transfers money to the company’s account in the U.S. The company then transfers an equal amount to the recipient in the recipient’s country. With no money leaving the U.S. directly, the platforms are able to keep their fees low. The transfers are fast, cost-effective, and accessible on easy-to-use online and mobile apps.
Cons: Xoom is only available in 120 countries, OFX is only available in 80 countries, and Wise is only available in 70 countries. Recipients of Wise and OFX payments must also have a bank account to receive money. Additionally, many online transfer providers have minimum transfer amounts that may be difficult for some to afford.