5 Tips For Your First Online Money Transfer

Are you sending money internationally online for the first time? Well, if you're feeling a bit unsure or nervous about some part of the process — fear not! Not only is sending money online safe and secure, but these days, it's also faster and more convenient than ever before.

However, if you're not used to the process, there are a few things you'll want to consider carefully. In this short guide, we cover them all in just five simple tips!

1. Avoid Your Bank

Although using your bank to transfer overseas can be tempting, we don't recommend it in most cases. That's because banks don't tend to be specialised in global transfers, and accordingly, these services are normally very expensive and slow.

How expensive exactly? According to Monito's research, most banks charge 5% to 15% in total fees and hidden margins, meaning that for every $100 you send, only around $85 to $95 will actually go to your beneficiary.

In terms of transfer speed, it's not much better either. Because banks rely on SWIFT (a cumbersome multi-step process), international transfers can easily take up to five business days to arrive.

Although the advantage of using your bank is that you'll be able to transfer your money without leaving your online banking and without needing to set up another account with a third-party provider, all in all, we don't think it's worth it to go through your bank (unless you don't mind the high fees, of course).

2. Find an Online Provider

Instead of going entirely through your bank, use your bank to transfer to your beneficiary via an online money transfer service. This method can save you a surprising amount of money — particularly if you make transfers frequently. It works very simply, all you have to do is:

1. create an account with a provider,
2. choose the amount and currency you want to send to,
3. enter your beneficiary's bank details (or card number or cash pick-up location),
4. transfer the money from your bank or credit or debit card directly to the provider,
5. ...the provider then handles the rest and saves you money!

There are many top-notch providers out there with great reputations and market-leading exchange rates, including Wise, Remitly, WorldRemit, Western Union, and many others. The one that's best for you depends on your individual needs and preferences, and choosing from among a panel of options might seem overwhelming. Fortunately, here at Monito, we built a free, real-time comparison engine that lets you compare the market live and find the best deal. Here's how it looks:

It's simple to use; all you have to do is enter your amount and the country you want to send to and compare providers in just a few taps. Try it now for yourself! 👇

3. Understand The Costs

When sending money internationally online, it can be easy to overlook the fees you pay. This is made worse by the fact that some providers (especially banks) hide some of their fees in the fine print.

There are generally two kinds of fees you pay when sending internationally:

1. Service fees: A fixed fee or commission that's announced upfront.
2. Exchange rate margin: A fee that emerges when you're offered a slightly worse exchange rate than the real rate (i.e. the one you see on Google).

Most banks and even a few specialist providers obscure the second fee by trying to give you the impression that the exchange rate associated with your transfer is the exchange rate when, in fact, it's not. This can lead to you being charged untransparent fees, which you don't even know you're being charged.

Once again, Monito makes all the difference. By using our comparison engine, you can get a reliable, up-to-date overview of all the fees you'll be charged with each provider in a way that's easy to understand — yes, even for the hidden ones. Here's an example of a fee breakdown from our comparison:

4. Consider Speed & Payment Methods

There are other important aspects to consider when transferring internationally online too, specifically:

1. Transfer speed: Generally, bank-to-bank transfers take 1 to 5 business days via the bank and are quicker via online providers. If you pay with a credit card or if your recipient wants to receive their money as cash, your entire transfer could take just a few minutes.
2. Pay-in method: This refers to the payment method you use to fund your transfer. Bank transfers are normally the cheapest, and credit and debit card transfers normally come with an additional fee.
3. Pay-out method: This refers to how your recipient will receive their money. Bank deposits are the cheapest for the sender, but in some countries, picking up physical cash or having funds sent to a mobile wallet remain popular.

5. Beware of Exchange Rates

Especially if you plan to send money abroad often, timing your transfers to find a favourable exchange rate can be crucial to saving money for both you and your recipient.

Here's an example of how this can be important. Below, we looked at real average exchange rate data between the USD and PHP from a few days in a typical week in January 2024:

• Monday: 1 USD = 55.9645 PHP
• Wednesday: 1 USD = 56.2184 PHP
• Friday: 1 USD = 56.331 PHP

Over the course of the week, the dollar strengthened against the peso, meaning sending USD to the Philippines on Monday would've bought you fewer pesos than it would've if you'd made the same transfer on Friday. In fact, if you'd sent 1,000 USD on Friday, your recipient would've received 366.50 PHP more than if you'd sent it on Monday, excluding any fees. Same amount leaving, different amounts arriving.

That's no small difference!

When searching for the cheapest provider on Monito, you can set an exchange rate alert to receive emails whenever there's a big move in the exchange rate. This can help you time your transfer or find the cheapest deal at any given moment of the week: