Home Guides 3 Main Ways to Send Money Online Explained

3 Main Ways to Send Money Online Explained

Whether you need to send money to a child studying overseas or split the cost of a vacation, the best way to do it is online. You can send money anywhere in the world in a matter of seconds using a variety of platforms these days, but you must choose the right service lest you might end up paying unreasonable fees and facing long delays. This guide will take you through everything you need to know when sending money online.

Updated: 24/06/2021
Read time: 11 minutes
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Why might I want to send money online?

The digital revolution the world has undergone in the past few decades has made us more connected than ever. Reaching someone on the other side of the world is now as easy as a few clicks of a button, and where the digital world goes, money follows.

International money transfers are a fast-growing and competitive industry, seeking to help people reliably send money abroad for lower fees, faster transfer times. As digital payments become increasingly common within our own countries, the demand for more accessible online international transfers is growing, too.

Some of the most common reasons you might want to send money online could include:

1. Remittance payments: Sending money home in the form of remittance payments is one of the most common reasons for making international money transfers.

2. Paying bills: You might have utility expenses or school fees that need to be paid either at home or abroad. These may be recurring costs and you may have to make regular money transfers to pay these bills. 

3. Making a purchase abroad: With e-commerce becoming popular, you can easily access products from across the world. You can purchase what you like from wherever you want and pay for it through online money transfer. People also make high-value purchases such as property, and pay for it via online money transfer.

4. Sending money to friends and family: As more and more people live and work away from home, within their country or overseas, the need to send money digitally between close friends and family is served by many online money transfer providers. You may need to send money to loved ones on a regular or ad-hoc basis for various purposes. Online transfers are the best, and usually the cheapest, method.

Pros and cons of sending money online

There are various ways you can send money to other people, including money orders and traveller’s checks, but the most efficient way to make a transfer these days is online. There are many benefits of sending money online, but it is important to look at the limitations too; so here’s a quick run down of the pros and cons.

Pros
Convenience: Sending money online is very convenient. All you have to do is log into your provider’s platform or app and arrange the transfer.
Cost: Most online money transfer providers can send your money abroad for lower fees than traditional banks.
Speed: Online money transfers are quick. In most cases, the transfers are completed instantly or the same day.
Global reach: The biggest advantage of online money transfers is that you can send money to any part of the world.
Safety: Banks and money transfer companies have multiple layers of security that ensure that your money reaches the recipient safely.
Cons
Fees: It's always important to check the exact fees you'll be charged with an online money transfer to ensure you aren't hit with the 'hidden cost'.
Competition: These days, there are a lot of online transfer services available, so finding the right (and most affordable) option for you is a challenge in itself.
Non-reversible: Due to the nature of online money transfers, many are non-reversible. If you make a mistake in filling in the recipient details and you send the transfer, you may not be able to reverse the transaction because the money would reach the recipient’s account before you can process a request to cancel the transfer.
24/7 Access

Sending money has a lot of advantages, not least the added convenience of accessing your money and initiating a transfer 24/7 via an app.

The 'Hidden Cost'

The hidden cost refers to undisclosed fees in a money transfer process – typically found in weak exchange rates or the fee charged by your provider for sending your money abroad. Always get the full cost of your transfer cost upfront to avoid losing more money than you expected.

 The 3 main ways to send money online:

You can choose to send money online via your bank or a money transfer provider. There are money transfer apps that have made sending money, including international money transfers, even more convenient. So, choose an option that suits you the best. If you’re new to money transfers, read our money transfers guide to get started.

1. Online banking

Using your bank is a convenient way of sending money online – typically, you’ll just need to fill in the recipient’s details and the amount you want to send, and your bank will handle everything else for you. Online banking is a popular choice for money transfers simply because of how easy it is. You don’t need to set up and verify a new account with a third-party provider, and many people trust their bank to keep their money secure. Make sure the details are correct. If you’ve entered incorrect details, refer to our guide: can a wire transfer be reversed?

However, it’s worth noting that the convenience of online banking often comes at a price when sending money internationally. Banks are known to have much higher fees and markups on the exchange rate than alternative options, so may not be the best choice if you are looking to get the most affordable deal.

The cost of convenience

While online banking providers an easy solution to international money transfers, the fees associated with sending your money abroad will often leave you out of pocket compared to using a more specialised provider.

2. Money transfer companies

Money transfer providers are almost always the best way to send money abroad online in terms of cost. There are now a variety of specialised money transfer companies that enable international transfers at much lower costs than banks, and with quick transfer times to get your money in the hands of the recipient within hours.

These providers are regulated by the appropriate financial authorities in the country they are registered in. Most of these companies have local bank accounts or P2P money pools in countries in which they operate, which reduces the costs and transfer times considerably.

3. Mobile apps

This option isn’t a completely different way of sending money online, but merely a more convenient way of accessing the two other options in this list. Online money transfers have been made even more convenient and efficient by the mobile apps. Many money transfer companies, and pretty much all banks, have Android and iOS apps that can be downloaded on the smart phones and used for transferring money on the go.

Saving time and money with online transfer providers

The vast majority of online money transfer providers have 24/7 access via an app and can offer far more competitive rates than a traditional bank. We compare all the providers on the market to find you the best deal for sending your money internationally!

How to send money online

The exact process for sending money online will vary depending on the money transfer provider you choose, but the basic steps remain the same. Here’s a general idea of what to expect:

1. Choose an online money transfer provider: The first step is also the most crucial in the process of sending money online. The transfer provider or bank you choose will determine how much you pay for the transfer and how fast the money reaches the beneficiary’s account. When choosing a provider apart from the fees and transfer speed, you must also take into account the payment and delivery options available. You can check out our detailed guide on choosing the right money transfer provider for your transaction to help you make the right choice.

2. Sign up for an account on the transfer provider’s website or app: Normally, signup is free and you only pay for transfers. You will need to provide your personal details, bank account details and an ID. Once you have signed up, the provider will verify your account, which may take a few minutes to a couple of days. 

3. Provide money transfer details: After your account is approved, you can set up your transfer. You will need to fund the transaction using any of the supported payment methods such as debit/credit card or bank transfer. You will also have to provide recipient details including name, contact details and bank account details. 

4. Make your transfer: You will be asked to confirm all the details, and make the transfer. At the step, you will also get to evaluate the exact transfer fees and transfer times. Once you send the transfer, you will be provided a transaction number that you should retain for future references. 

5. Track the transfer: You can use the transaction number to track the progress of your transfer. If there are any delays, you can contact the provider. 

How much does it cost to send money online?

The cost of sending money online depends on a variety of factors including how you choose to send the transfer, where the money is coming from and going, the currencies involved, and the amount of money being transferred. There are two main types of costs involved in an online money transfer: a transfer fee and an exchange rate margin.

Here’s an explanation of the fees you can expect when sending money online:

  • Fixed transfer fee: Most banks and specialised money transfer companies charge a fixed transfer fee. For domestic transfers this is usually very low, but it can increase significantly for international money transfers. This fee is usually higher in case of bank transfers, because bank transfer occurs over the SWIFT network and each participating bank on the network charges a fee separately.

    Many money transfer companies have employed better technologies and efficient systems that enable them to cut down the costs significantly. Normally, for bank transfers you may end up paying $15-$45 as transfer fee and if you choose money transfer companies, the fees can range from $2-$20.
  • Exchange rate margins: Banks and transfer providers will both charge a margin on the exchange rate when you make an online transfer – but just how much this margin is can differ greatly depending on which service you use.

    Typically, money transfer services have much smaller margins than banks. Some providers will add a small markup (0.5 – 2%) with no fixed fee, while others have a fixed fee and no exchange rate markups. Some charge both – in almost every case, though, money transfer providers will be cheaper than banks who tend to have much higher exchange rate margins.
  • Other fees: There may be some other fees involved as well when sending money online, but it will depend on the method you’re using.

    If you choose to make a payment using your credit card, you may have to pay an additional cash advance fee – especially if you’re transferring into a different currency.

    You may also have to pay some fee for choosing a particular delivery method such as cash pickup or home delivery of cash. The recipient may also have to pay a fee for receiving an international money transfer.

How long do online money transfers take?

Most online transfers occur instantly or same-day, but in some cases they can take up to 5 days to complete. Transfer times are usually shorter for common currency routes. It will also depend on when the transfer is initiated – e.g. on a work day or a weekend/bank holiday. 

Can I send large amounts of money online?

Yes, you can send almost any amount of money online so long as you choose the right provider. When making large purchases, such as buying a holiday home abroad or paying business expenses, you’re best served if you look for providers which specialise in transferring large amounts of money, rather than one of the many companies that focus on smaller remittance payments and have small maximum transfer limits.

By comparing your options and finding the right online money transfer service or bank, you can usually also make savings by negotiating a more favourable exchange rate margin if you’re transferring between two different currencies.

Is it safe to send money online?

It is completely safe to send money online, you just need to ensure you use a reputable provider and to take steps to ensure you’re not getting scammed. Most of the money transfer companies are fully regulated in the countries they operate in.

Moreover, there are multiple layers of security that keep your money safe as it is being transferred. However, always be alert and protect your personal information to keep out of the grips of online fraudsters. You can read our guide on the safest ways to send money online to help you keep your money safe.

What are the best money transfer providers to send money online?

Our comparison tool makes sending money online easier than ever. With transparency, simplicity, and cost-efficiency at the core of our brand, we’re shining a spotlight on the fees, transfer times, security, and more of every money transfer provider out there to help you find the right service for your needs.

To get started, jump straight to our transfer provider comparison tool, or take a look at our top 10 money transfer provider review.

Roundup: the best ways to send money online

Online money transfers have made it extremely easy for people to send remittance payments, pay bills, make purchases abroad, and send money to family and friends at the click of a button. Sending money online is a safe, convenient, and fast way to send money anywhere in the world. However, online money transfers are usually non-reversible and may prove expensive if you don’t choose your transfer provider carefully, so always be sure to do your research and check your transfer details.

You can send money online via banks and specialised money transfer companies – and often you’ll find that your chosen provider has a helpful mobile app. Normally, banks charge higher fees and exchange rate markups than online money transfer companies, so it is always worth comparing your options to ensure you’re getting the best deal. Our helpful money transfer comparison tool can help you do this in a matter of minutes.

Once you have chosen your provider, you just need to sign up for an account, pay for the transaction and make your transfer. Most transfers occur instantly or on the same day, but on less common routes transfers can take up to 5 days to go through.

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Artiom
Written by
Artiom

Artiom is a marketing graduate from the University of Portsmouth, Artiom’s primary experience is in PR and Outreach but he has a broad knowledge of search engine optimisation and all facets of digital marketing. He optimises the organic experience on MoneyTransfers.com with the content team manages and creates unique marketing tactics, and generally supports the overall growth of the website.

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