When you are living abroad, or you have family or friends living overseas, it is likely that at some point you will need to send an international money transfer abroad. There are many ways to do this, and one of the most familiar is with an international money order. Money orders may seem like an old-fashioned way to transfer money in the age of online money transfer companies, but they are still a safe and convenient method for sending smaller amounts internationally. This guide will take you through everything you need to know about international money orders.
A money order is a piece of paper, similar to a cheque, which is used as a method to make payments overseas. It is a safe alternative to cash and even personal cheques. On the money order, it is specified who will receive the money and both the payer and beneficiary must sign it for it to be valid. A money order can be purchased by prepaying the amount printed on it and filling out a form provided by the issuer, and then can only be paid out to the designated recipient.
International money orders can be obtained from postal services, some banks, and remittance providers such as MoneyGram and Western Union. They are accepted in many countries across the world and can be converted to local currency in a wide variety of countries.
Like any other payment method, a money order will have benefits and drawbacks. Here’s a quick summary of money order pros and cons.
The basic steps involved in sending an international money order are pretty simple. Here;’s a step-by-step guide to take you through the process:
If you’re considering other options for transferring your money internationally, the two main options you’ll want to consider are using your bank or an online money transfer provider. These both have their pros and cons, but in general online money transfer providers will be able to deliver your money faster and less expensively than if you use an international money order. Here’s a quick summary of these to other notable options.
The most obvious alternative to international money orders is a bank transfer. You can simply walk into your bank branch or login to your internet banking account and make an international money transfer. The transfer occurs via the SWIFT network, which is a messaging network used by banks and financial institutions all over the world to transfer information, including money transfer instructions. Depending on where the money is coming from and going, the currencies involved, and the amount of money transfer, your transfer may happen instantly or may take 2-3 days.
Banks tend to be able to facilitate large international transactions, but you’ll also have to pay a fixed transfer fee and a mark-up on the exchange rate as high as 5% to make an international money transfer with a bank.
Over the past few years, specialised money transfer companies such as XE, Paysend and WorldRemit have emerged as a great alternative to both international money orders and bank transfers. These companies have been successful in employing latest technologies and improved systems to bring down the transfer times and costs significantly. In general online money transfer companies can offer lower fees than banks, they are quicker, and also charge exchange rate margins between 1% and 2%, as opposed to the high margins often levied by banks.
Money transfer companies also support a variety of payment and delivery methods. You can pay for your transfer using bank transfer, debit or credit card, e-wallets, or cash, and the funds can be delivered to the recipient’s bank account, as picked up in cash, or even home-delivered (depending on the provider you choose). It is important to note that not all services are designed alike and there is no one-size-fits-all solution to all transfer needs, so it’s always important to compare your options when transferring money abroad.
To get you started, we’ve put together a list of top 10 money transfer companies to help you find the best provider for your needs.
If you’re considering whether there might be a better alternative for you than an international money order, then take the time to compare them to other alternatives such as banks and online money transfer companies. If you want a guaranteed prepaid way of delivering money overseas, then international money orders might be for you, but by looking into the various online money transfer providers around today, you will probably be able to find a quicker and cheaper way to transfer your funds abroad.
Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com