Long term travelers will almost certainly need to send money overseas at some point. Figuring out how to accept payment for a freelance project, helping out a friend, or asking family for a loan are a few of the scenarios that commonly crop up amongst the digital nomad set.

Most options to send money overseas fall into two categories: cash wires or money transfers. Western Union and MoneyGram dominate the cash wire market. Cash wires are fast, easy, and allow anyone to receive cash in hand from an agent pick-up location.

Money transfers require that both users have a bank account. Typically, money transfers take a few days. Money can be sent and received via money transfer with the use of an internet connection. Unlike with a cash wire, the recipient does not need to go to a pick-up location. You can use your bank or a third party company to complete a money transfer.

Choosing the best company to use to send money overseas depends on the following factors:

  • When is the money needed?
  • Does the company handle both needed currencies?
  • Do both parties have a bank account?
  • Is there a minimum transfer amount?
  • What is the transfer fee?
  • How much is the exchange rate cost?

Not all companies that help you send money overseas are created equal. Here’s a handy chart that compares some popular money transfer and cash wire companies. I included bank transfers to provide a baseline for transaction fees and currency exchange costs. The chart is organized by exchange rate cost in descending order.

Chart comparing various companies that send money overseas.
This chart is available for cloning and customization here.

THE GOOD

TransferWise stands out by offering a real mid-market exchange rate. Some users consider the exchange rate cost to be a “hidden fee.” The exchange rate cost is the money you lose when money transfer companies make a profit by giving you a worse exchange rate than they are actually using to change the currency. TransferWise is the only company I found that only uses a transaction fee and does not make money from manipulating exchange rates.

WorldFirst, 1st Contact and OFX all closely match TransferWise. Essentially, they charge the same amount in profit from exchange rate cost that TransferWise charges in a transaction fee. All three companies have minimal set transfer fees.

THE BAD

PayPal and Bank Transfers are the most convenient options on the list. In both cases, you’re trading convenience for cost. The exchange rate cost varies wildly by bank. There is also a large amount of variance for PayPal, depending on what the sending and receiving currencies are. Compare final costs carefully before choosing either of these options.

THE UGLY

Cash wire companies prey on the people who need their services most. They hit you with big fees twice. The first is in the set transfer fee. Secondly, the exchange rate cost can rival or exceed the high costs at PayPal or through bank transfers. People without bank accounts are most likely to be low income earners. Thus, those who must use cash wires instead of money transfers are more affected by the exorbitant fees charged by WesternUnion and MoneyGram.

TAKEAWAY

Currency exchange rates fluctuate. Your bank or PayPal may beat out other transfer companies for certain transfers. Some companies offer better rates for certain countries. The chart above is a baseline for getting started on your own research. Choose a few companies that will work for you and do a comparison before you send money overseas.

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